The digitalization and democratization of private jet travel; brokers, operators, marketing, apps, PR.
Is XOJET Finally Solving The X’s And O’s Of Private Jet E-Commerce And Democratization?
By Doug Gollan, Sept 22, 2016, Forbes.com
This column will cover the digitalization and democratization of private jet travel, two of the hottest topics in private aviation, but one where the PR spin often operates at a much higher altitude than reality. It’s a somewhat complicated story that doesn’t fit neatly into a tidy box, so let’s start with a bit of background.
Lot’s of private jet brokers have invoked Uber in launching their booking apps. And true, like Uber, these brokers neither own nor operate the aircraft they are selling flights on. However, the process of securing a private jet is not nearly as streamlined as you tapping on your smartphone, having a driver four blocks away press accept, and show up seven minutes later.
The process of chartering a private jet involves lots of people, expensive and highly sensitive assets, and lots of moving pieces. There is you, the person who wants to charter the plane. Your assistant is probably involved as well, getting quotes, and dealing with logistics such as catering, names and IDs for the manifest, coordinating ground transport, and coordinating the FBOs (private jet terminals) you are using. There are also the people traveling with you, who need to know where to be and at what time.
If you are traveling with lots of luggage, somebody needs to check how many golf bags the plane will take? Range of planes varies based on load. Weather and altitude of the airport you are flying in and out of impacts jet performance. The heavier the plane with passengers, baggage, and fuel, the more fuel burned, thus the shorter distance it can fly. Prevailing winds might require the aircraft type you favor to need a fuel stop in certain months of the year. Do you care what type of lavatory your plane has? Some have only a pull around the curtain, others are closeted off. Some, even at that are fairly small. Do you have any extra tall travelers? Private aircraft are tubes, some of which might be uncomfortable for very tall travelers. Larger jets have more headroom. If you have pets or kids, again, that can be an issue.
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Most of the 7,000 private aircraft in the U.S. licensed for charter are owned by individuals or companies that then hire aircraft management companies to operate the planes on their behalf, including working with thousands of third party brokers to charter the plane when the owner isn’t using it. In other words, the broker is dealing with a management company, not the actual owner in many cases. Each owner has his or her own set of contractual rules when it comes to chartering their planes. Some don’t want pets or kids. Others only want to charter their jets for longer flights. Expensive maintenance is driven by the number of landings and takeoffs, so an owner might not want to charter her new $50 million Gulfstream for short hops between Boston and New York, but would be OK if you want to go to London or Los Angeles.
What’s more, in securing a specific plane for a charter, availability can be impacted by unscheduled maintenance issues that come up between when you book your charter and when you fly, as well as weather issues, crew availability and so forth. Sometimes the owner decides he wants to use his jet on short notice. Unlike commercial airlines with sophisticated fleet management systems and large pools of similar planes and crew they can shuffle around, owners often configure their jets slightly differently, to their own needs and tastes, of course. Cockpits are not always configured the same and differ by age of the jet, so if one jet goes tech, and your broker finds a replacement, the operator needs to find crew qualified to operate it and get it positioned to where you are being picked up.
All of the above makes the idea of a simple click-and-buy “Uber” for private jets app an oft-used, but empty analogy as management companies generally need owner approvals or need to see if they will make exceptions, a manual process. It’s also just a very complicated process, where as a consumer, there are some true benefits of dealing with an expert broker who is familiar with the various charter fleets, where they are based, and which planes are generally available.
That said, there are exceptions to the above. Some owners give management companies carte blanche, and then there are several fleet operators that own the planes they fly and make them available for on-demand charter without any upfront fees. Two of the largest operators that own their jets are XOJET and TMC, which together have over 100 jets, 41 and 65 respectively. As of June, they now have common ownership via TPG Capital, although they continue to operate independently. Other big players in the on-demand charter market that own the jets they operate are VistaJet and JetSuite. WheelsUp is similar, with the difference is you have to pay a membership fee and its focus is turboprops.
The second issue is “democratization” of private jet travel. Another term used liberally in private aviation company press releases, it underscores that such descriptors are relative when democracy comes at a price of $4,000 per hour. Compared to shelling out tens of millions to buy a jet, millions of dollars for fractional ownership, or hundreds of thousands for a jet card, yes there has been progress.
Bradley Stewart, the President, and CEO of XOJET, describes the traditional market for private jet travel as “the top 10 percent of the one percent,” so folks with a net worth of $30 million and annual incomes in the multiple millions of dollars.
At the same time, SurfAir and JetSuiteX, a JetSuite offshoot, have been expanding the market with hybrid models. Each fly what are essentially scheduled services using FBOs, thus enabling customers to show up 15 minutes before their flight and jump aboard, leaving behind airport hassles, a key benefit of private travel. In the case of the former, it’s a membership model where you pay $1,950 per month, then fly as much as you want on its network, principally within California. With the latter, you simply buy a seat at prevailing fares on its website, similar to booking a commercial flight. Fares run as low as $129. Its routes right now are mainly in the West, and by next year at this time expects to have 10 Embraer 135s with 30 seats buzzing around. Travel blogger The Points Guy wrote of his JSX flight “not dealing with TSA was a huge plus.”
In both cases, you are buying a seat or the opportunity to reserve a seat. There are other passengers on the flight. Seating is closer to commercial airline economy class than Donald Trump’s Boeing 757, and there is a set departure time you need to be there for, or you miss the flight…
Full Forbes.com Article Here
The author Doug Gollan is Founder and Editor-in-Chief of DG Amazing Experiences, an e-newsletter for private jet owners.