The rich return to the skies, in private jets
Companies aren’t seeing headwinds as severe as those faced by airlines
The pandemic has sent demand for commercial airline flights into a tailspin, but business is soaring for the private jet companies that fly corporate bigwigs and deep-pocketed travellers looking to wing away to an exclusive getaway.
The trend demonstrates once again that the outbreak of COVID-19 is having vastly different effects on Americans depending on the size of their bank accounts.
Despite the pandemic’s severe blow to flying and the economy, private jet companies such as XO Jets, NetJets and Surf Air report that they are booking about 80 per cent as many flights and hours in the air as they had before the pandemic struck the U.S. And many of those flyers are new to the private jet scene. Meanwhile, demand for flights on traditional airlines has sunk to as low as 10 per cent of pre-pandemic levels — a drop so severe that United Airlines recently served notice that it may furlough up to 36,000 employees.
The reason is clear: Flyers who charter a plane usually get an entire jet to themselves, avoiding a crowded airport terminal and a cramped airline cabin with hundreds of potential virus sources.
“It’s people’s health concerns,” said Patrick Gallagher, president of sales and marketing for NetJets, a jet charter business owned by Berkshire Hathaway. “People are fearful of a commercial terminal with 100-plus strangers. They don’t want to deal with the protocols involved in that.”
Gallagher and others in the private jet industry say many of their new bookings and membership accounts are from travellers who previously flew first or business class on traditional airlines and are now switching to lower their risk of contracting COVID-19.
Another reason for the shift is that hard-hit commercial airlines have cut service to many mid-size cities. Flyers with fat wallets are booking private jets to fly to small and mid-size cities where they own a vacation home or a ski condo.
Because the pandemic has brought most in-person business meetings to a halt, most of the flights taken on private jets have been for leisure, according to private jet operators.
Upgrading to a private jet is not cheap.
The price of a round-trip, firstclass flight from Los Angeles International Airport to Las Vegas’ McCarran International Airport is less than $540 on United Airlines. Chartering a small private jet that can carry up to eight passengers from L.A. to Sin City starts at about $12,000 and increases with the size of the jet and the amenities included.
There are several ways to fly on a private jet without owning one.
In addition to simply chartering a private jet to fly from point A to point B, some jet operators offer “fractional” jet ownership, in which the client pays for a share of the jet for as long as the contract continues, usually three to five years.
Aclient who wants to buy oneeighth of a $20-million jet, for example, would pay $2.5 million. During the contract, the fractional owner gets access to the plane for a set number of hours, depending on the size of the share. They must also pay management fees and an hourly rate that goes toward the pilot’s salary and insurance and fuel costs, among other expenses. At the end of the contract, the fractional owner gets back one-eighth of the remaining value of the jet.
Flyers can also sign up for a jet membership program, in which they pay a fee for a limited set of hours in the jet, with pilots and flight attendants included. Sentient Jet, based in Massachusetts, offers an entrylevel program with 25 hours of jet time for $184,000. A jet with a larger cabin and Wi-Fi access costs $263,000 for 25 hours of flight.
After demand for all air travel dropped off in April, private jet operators say they saw an unprecedented surge in business that has nearly returned the private jet charters to pre-pandemic levels.
“I’ve never seen this before,” said Andrew Collins, president and chief operating officer of Sentient Jet. “We just saw the most new customers we have ever seen in June.”
Gogo Business Aviation, which provides broadband service for private jets, reported that in mid-April the number of flights using its service dropped to 378 per day but then jumped to 3,200 per day by the beginning of July. Before the pandemic, about 3,500 flights used its service daily.
Leona Qi, the U.S. president of VistaJet, said more than twothirds of the incoming calls to her business are from people who have never flown on a private jet before.
Michael Cappuccitti, a land developer from Toronto, turned to a private jet this spring after he and his family flew to Barcelona on a commercial flight to have his daughter undergo back surgery. Once the pandemic reached North America, travel restrictions made it nearly impossible for the family to fly back to Canada on a commercial airline. Cappuccitti chartered a private jet at a slightly discounted rate to fly back to Toronto.
Although he had previously flown first or business class on American Airlines for business trips, Cappuccitti said he was awed by the service and luxury of the private jet and has now set a goal of someday being able to afford to fly on a private jet on a regular basis.
“The experience reinforced everything I thought about it,” he said. “It was ridiculous how good it was.”
But for most new private jet flyers, the attraction of a private jet is the reduced exposure to other flyers and places where the coronavirus might be lurking.
Although commercial planes have a ventilation system that keeps air from circulating through the entire length of the cabin, health experts say the more crowded a plane cabin, the greater the risk of being infected. In a private jet, the client controls who and how many people share the cabin.
Private jet passengers also get to avoid going through a crowded airport terminal before boarding, another potential avenue of exposure to the virus.
Operators say they have not been promoting or advertising the reduced potential for exposure to COVID-19 on private jets. They say they don’t have to.
“Ultimate luxury is peace of mind,” NetJets’ Gallagher said. “People in the market for private aviation understand that.”