Jet sharing spreads its wings; plane sales stall
Thanks to new technology, flying in a private jet is no longer just for business titans and the superwealthy.
But in a paradox, that means aircraft manufacturers like Cessna and Bombardier are selling fewer planes.
The general aviation industry is undergoing a major shake-up as new business models attempt to match idle aircraft with passengers, many of whom now can’t afford their own plane. Membership companies, ride-sharing programs, on-demand charter providers and startups claiming to be the Uber of private aviation are all looking to introduce more people to the convenience of flying without the hassle of commercial airports.
“Unfortunately for airplane manufacturers, these new programs aren’t out buying a lot of new jets,” said Brian Foley, a business-aircraft consultant who spent 20 years as director of marketing for the North American jet unit of France’s Dassault Aviation. “They’re just trying to use existing assets out there and get more utilization out of those parked airplanes.”
Manufacturers have throttled back production of some models to adjust to weaker demand. New jet deliveries are expected to drop 6.4 percent this year to 645 and slip an additional 3.7 percent to 625 next year, according to JPMorgan Chase.
Those declines contrast with an increase of more than 5 percent for flight hours for the charter market in the October-to-September period for the past three years, according to Argus International.
The increase in charter activity is partly because of the new options that have opened up the market beyond super-wealthy customers, said Brad Stewart, chief executive of XOJet, which operates a fleet of 41 used aircraft for hire.
“The democratization of private aviation is a huge theme, and it’s here to stay,” he said. “That’s really tak- ing an access point of private aviation and bringing it from the top 10 percent of the 1 percent down to the merely rich.”
XOJet has partnered with JetSmarter, a company that charges members an annual fee with no extra cost if they hitch a ride on a private plane already scheduled by another member. JetSmarter, which owns no planes, buys flight hours from XOJet and other operators, which enables it to guarantee flights for its users.
But Sergey Petrossov, the founder and CEO of JetSmarter, doesn’t see an airline-like reservation system taking off in the private-jet market. Customers will choose brands that make it easy to book a flight while having the backing of a company that takes the risk of providing quality planes and crews, he said.
“By giving consumers more options, we keep them in the private aviation ecosystem and keep them away from the dreaded commercial airport,” he said. “That’s what this is really all about.”