Jet set fu­ture

Pri­vate jets are the re­serve of the elite – or are they? Tom Ot­ley, Jenny Southan and Craig Bright report on com­pa­nies mak­ing it eas­ier and cheaper to book

Business Traveller (Asia-Pacific) - - PRIVATE JETS -

There’s a tiny, twin-en­gine air­craft wait­ing for me on the tar­mac. In­side, a lux­ury cream in­te­rior holds just four leather seats. I sit back, re­lax, and think:“So this is what it’s like to fly on a pri­vate jet.”

Ex­cept I’m not about to fly any­where. I’m grounded in a hangar at Hong Kong In­ter­na­tional Air­port for an in­spec­tion of the new 13-me­tre Honda Jet on its de­but ap­pear­ance in the city.

I bring out my smart­phone and type “Honda Jet cost” into the search bar – US$4.5 mil­lion. And just like that, my dreams of VIP travel dis­solve.

How­ever, for many high-end busi­ness trav­ellers, fly­ing on a pri­vate jet is start­ing to get tan­ta­lis­ingly close to re­al­ity.

“Own­ing a busi­ness jet is more ac­ces­si­ble now be­cause of all the op­tions busi­ness trav­ellers now have: they can char­ter, be­come a frac­tional owner, or buy their own pri­vate jet,” says Lu­ciano Froes, se­nior vice pres­i­dent of mar­ket­ing for Em­braer Ex­ec­u­tive Jets.“We believe the char­ter and frac­tional mar­kets are very good for the ad­vance­ment of busi­ness avi­a­tion, es­pe­cially in Asia where the market is slowly ma­tur­ing.”

APP IN THE AIR

If the price is right, char­ter­ing an air­craft can be a tempt­ing propo­si­tion – not only do you get to feel like a VIP but you can also avoid long queues at check-in, de­part when you want to and land in an air­port that isn’t miles from your meet­ings. Put it like that and it ac­tu­ally makes busi­ness sense.

Char­ter­ing a jet can be as sim­ple as pick­ing up the phone, but in re­cent years ad­vanced tech­nol­ogy – in­clud­ing con­sumer-friendly apps – has made the busi­ness of find­ing the right air­craft much eas­ier and, in many cases, con­sid­er­ably less ex­pen­sive. Many of us have ex­pe­ri­ence of us­ing Uber, and pri­vate jet “dis­rup­tors” such as Strata­jet (strata­jet.com), Vic­tor (fly­vic­tor.com) and Pri­vate­fly (pri­vate­fly.com) have been quick to copy the idea in a bid to be­come the “Uber of pri­vate jets”.

Strata­jet has quickly ex­panded in Europe and the US. It claims that it was set up “to ad­dress the ma­jor is­sues of in­ef­fi­ciency and wastage in pri­vate avi­a­tion”. That in­ef­fi­ciency comes about be­cause at any mo­ment there are thou­sands of jets wait­ing to be char­tered, but they may be in the wrong place and need fly­ing to the right one. These “empty legs” can be an an­swer for pas­sen­gers seek­ing a cost-ef­fec­tive pri­vate flight.

Ac­cord­ing to the com­pany, the aver­age book­ing through its app, launched in April last year, is US$7,800. Bear­ing in mind that this could mean char­ter­ing an en­tire air­craft, it might per­haps demon­strate that there is scope for a wide range of peo­ple to have ac­cess to pri­vate jets. Cou­pled with the fact that one-third of fly­ers are first-time fly­ers, it sug­gests that there’s the pos­si­bil­ity of this be­ing a growth market.

Jonny Ni­col, founder and chief ex­ec­u­tive of Strata­jet, says: “When you down­load the app, the price you see is the price you pay. We spent over four years build­ing the tech­nol­ogy be­hind it so we could quote in­stantly and ac­cu­rately, tak­ing into ac­count all the vari­ables.”

He ex­plains that when you char­ter a jet,“there are 15 dif­fer­ent sets of fees, 14 of which are out­side the op­er­a­tors’ con­trol and change [de­pend­ing] on the time of day, day of week and level of emis­sions, and those dif­fer­ences can be thou­sands of pounds.”

SUB­SCRIP­TION FEES

As well as new tech­nol­ogy, there have also been new busi­ness models. Com­pa­nies such as Jets­marter (jets­marter.com) and Surf Air (sur­fair.com) not only have an app but also a busi­ness model not un­like a gym mem­ber­ship. You pay a one-off “ini­ti­a­tion” fee and then a monthly charge af­ter­wards.

Seats are on a first-come, first-served ba­sis and on some routes it is only a once-per­week ser­vice. Other routes are avail­able, but might come at an ex­tra cost (Lon­don to New York or Dubai), or are nor­mal char­ters. Both the sub­scrip­tion model and the tech­nol­ogy might be seen as democratis­ing the pri­vate jet market by mak­ing it more ac­ces­si­ble to a wider net of peo­ple.

Still, Neil Har­vey, di­rec­tor of ex­ec­u­tive avi­a­tion at bro­ker Hunt and Palmer (huntand­palmer.com), ques­tions how many peo­ple will be pre­pared to pay an ini­ti­a­tion fee. “They sell it as an ad­van­tage but with us there is no upfront pay­ment needed at all – you can ring for ad­vice, talk prices, and noth­ing is paid un­til just be­fore the flight,”he says.

Pa­trick Mar­get­son-Rush­more, chief ex­ec­u­tive of Lux­avi­a­tion UK (lux­avi­a­tion.com), which op­er­ates a fleet of more than 250 air­craft and deals with all the ma­jor bro­kers, wel­comes the rise of these in­ter­net in­ter­me­di­aries. Nev­er­the­less, he has con­cerns about tar­get­ing new seg­ments.“There are ques­tions over the vol­ume of peo­ple who could po­ten­tially fly and the price they are pre­pared to pay, and that’s the crunch. Apart from empty legs, the price of pri­vate fly­ing is not cheap.”

PRI­VATE JET CARDS

In the US, if you fly more than 400 hours a year on a pri­vate jet, you’re bet­ter off buy­ing your own air­craft. But if that’s not doable, a “jet card” may be the right al­ter­na­tive. These en­able trav­ellers to pre­pay for a block of hours or load up an ac­count with credit to use as and when they like on a pre­de­ter­mined air­craft of their choice.

If you de­cide this is right for you, you’ll re­quire a chunk of cash upfront (this is not for trav­ellers who pre­fer a pay-as-you-go ap­proach to jet char­ter). The ben­e­fits of a sub­scrip­tion will mean you get to lock in a fixed hourly rate (you only pay for sched­uled flight time – not di­ver­sions, de­lays, fuel, land­ing fees, de-ic­ing or air­craft po­si­tion­ing, for ex­am­ple). You also have guar­an­teed avail­abil­ity, there are no peak-hour re­stric­tions and the book­ing process is speedy.

Pri­vate jet cards rep­re­sent 20-25 per cent of char­ter rev­enue for bou­tique bro­ker Sky­time Jets, which launched in 2012. Some 60 per cent of its busi­ness comes from Europe, 30 per cent from the US and 10 per cent from the Mid­dle East and Asia. James Shot­ton, its co-founder and di­rec­tor, says: “We work with in­di­vid­u­als who ap­pre­ci­ate that buy­ing a pri­vate jet card is not the cheap­est way to fly but who want very high-qual­ity, per­son­alised ser­vice. Cus­tomers can ei­ther ne­go­ti­ate on ev­ery sin­gle char­ter trip and have mul­ti­ple con­ver­sa­tions about price, or have a fixed price agreed at the be­gin­ning so they know ex­actly what they are get­ting.”

FIRST OFF THE BLOCKS

Sen­tient Jet claims to have been the in­ven­tor of the pri­vate jet card, with 100 per cent of its rev­enue com­ing from this model even af­ter 20 years. Its pres­i­dent and CEO, An­drew Collins, says:“About 60 per cent of our flights are re­lated to busi­ness and 40 per cent to leisure. Whether it’s a top ex­ec­u­tive look­ing to make an im­por­tant board meet­ing, or a fam­ily mem­ber look­ing to get home in time for the hol­i­days, fly­ing pri­vate is a vi­able way to beat the clock.”

How quickly can you go from book­ing to boarding? Carol Cork, mar­ket­ing di­rec­tor and co-founder of Pri­vate­fly, says: “We had a jet card cus­tomer go from en­quiry to air­borne in 31 min­utes last week from Mi­ami to Chicago. On

aver­age, al­most a third fly within 24 hours of book­ing, and 66 per cent within a week.

“In gen­eral, jet cards came about as a nat­u­ral evo­lu­tion of the pri­vate jet market. First, you could own your own pri­vate air­craft, then frac­tional own­er­ship was cre­ated for those who wanted a share in a spe­cific fleet, then a jet card be­came de­sir­able, of­fer­ing a block of fly­ing time, but with­out the full or part-share fi­nan­cial in­vest­ment of the air­craft as­set.”

Jour­nal­ist and jet ex­pert Doug Gol­lan says do­ing your re­search is es­sen­tial, which is why he founded pri­vate­jet­card­com­par­isons.com, a site de­signed to help you work out what suits you best. He says: “Do rich peo­ple re­ally buy these pro­grammes with­out read­ing the fine print? All the time. What hap­pens? They get very up­set af­ter they see their first in­voice.”

Em­braer’s Froes is op­ti­mistic that these de­vel­op­ments will help po­si­tion busi­ness jets as a pro­duc­tiv­ity tool rather than sim­ply a lux­ury item.“The ride-share and mem­ber­ship-based models are an ex­cit­ing de­vel­op­ment in busi­ness avi­a­tion, mak­ing the ac­ces­si­bil­ity of busi­ness jets even greater,” he says. “With just a few clicks, the lat­est mo­bile apps en­able users to book a flight on a pri­vate jet quickly, while giv­ing the op­er­a­tors the op­por­tu­nity to op­ti­mise the use of the pri­vate jets. We believe these models, which were in­tro­duced pri­mar­ily in North Amer­ica, have the po­ten­tial to grow to other mar­kets, of course, in­clud­ing Asia.”

Op­po­site and

above: Em­braer’s Legacy 500; Vic­tor pas­sen­gers; and the Vic­tor Pri­vate Jet Char­ter app

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