Affordable luxury?
The democratisation of private jets
What would it take for you to use a private jet? “A lottery win” might be the answer from some of you, but there are more ways of flying in a private aircraft than owning one – chartering being the most obvious.
If the price is right, it’s 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. INSTANT BOOKING 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 ”have been quick to copy the idea in a bid to become the“Uber of private jets”.
The differences are probably as many as the similarities, and if you think back to your last Uber driver, respectable though he was, you probably wouldn’t want to imagine him flying you around in a Cessna that evening. Still, like Uber, operators such as Stratajet (st (stratajet.com), Victor (flyvictor.com) an and Privatefly (privatefly.com) offer ap apps with one-click access to the we web-based air charter marketplace.
The idea is that, once registered, yo you can step out of your overseas m meeting and request the right jet for you from the nearest air airport without having to endure th the scheduled flight home. Pr Presumably, the attraction of that is even stronger in the US, where do domestic flying has significantly co contributed to widespread de depression among road warriors.
Stratajet has quickly expanded in Europe and, as of mid-September 2016, the US. It claims that it was se set up “to address the major issues of inefficiency and wa wastage in private aviation”. That inefficiency comes ab about because at any moment there are thousands of jet jets waiting to be chartered, but they may be in the wr wrong place and need flying to the right one. These “e “empty legs” can be an answer for passengers seeking aca cost-effective private flight.
Stratajet says that the average booking through its ap app, launched last April, is £6,000. Bearing in mind that th this could mean chartering an entire aircraft, it might perhapsh d 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.
The Jetsmarter Jetshuttle service offers “free” single seat trips on various routes, some of which are seasonal – Nice, for instance – and some of which are to business cities such as Geneva, Milan, Moscow, Munich, Paris and Zurich.
Seats are on a first-come, first-served basis and on some routes it is only a once-per-week service. Other routes are available, but either 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.
“Bear in mind also that when you’re chartering a private jet you will be in a much smaller cabin than on a regular scheduled flight sharing with people you don’t know. [With the latter] you also lose flexibility on timing and location – if I’m down at Gatwick, I don’t want to drive to Luton to get on the aircraft. Chartering is about privacy and time. In a sense that’s what we sell – time.”
Carol Cork, sales and marketing director at Privatefly (privatefly.com), says: “We’ve won a couple of clients from subscription models who found that after trying it they couldn’t substantiate the model. The aircraft were either full or not flying when they said they were, and that level of certainty of getting to a meeting just wasn’t there.” HUMAN ELEMENT 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. “They are an important part of our business, and are aggressively marketing to those who don’t currently fly,” he says.
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.”
It’s something that the new entrants are conscious of, not least since it is a narrow-margin business for most brokers, and one in which, if they do gain a new client, they want to ensure they keep hold of them by adding the value of their expertise rather than merely relying on the technology.
Cork says: “Previously it was seen as a very elitist way to travel and there were misconceptions about pricing and a general lack of knowledge from the potential customer.” She does, however, say that “real-time pricing” is the answer for every traveller, and emphasises the benefits that human interaction can bring.
Cork says: “It won’t suit everyone. It’s a marketplace so there is no fixed price. If we have time to go to the market, we can perhaps get a better price than simply quoting immediately – that’s part of the ability we bring with experience in negotiating with the suppliers. Of course, if you need the jet in two hours’ time, then real-time pricing might make sense, but for most bookings, it might be better to have more options.”
Margetson-Rushmore echoes this: “If they are a first-time flyer then they are going to want some human contact before they spend £20,000 on a charter. It’s not as simple as booking a restaurant. There’s a lot involved, and the value that brokers bring means they perform a valuable service for their clients.”
For its part, Stratajet says that “86 per cent of first-time bookers have human interaction on the phone,” which Nicol welcomes, since it offers the chance to form a bond with new customers.
With brokers operating on such slim margins, encouraging growth in the market and holding on to new customers is all important – good news if you are thinking of chartering a jet. As Cork puts it: “Whoever you work with, they need to have people who know what they are doing, can offer excellent service and a 24-hour delivery, and deliver on what they promise. You don’t get a second chance with private aviation. If we let a client down, they are not coming back.”