By Alasdair Whyte, Corporate Jet Investor
Part 1 – An overview and brief history of XOJet touching on its strategic goals and fleet
Part 2 – The Six Principals of Owned Charter
Part 3
The future for charter
With XOJET, his consultancy background and a place on the JetSmarter board, CEO Brad Stewart has a wide view of the US business aviation market. He also spends a lot of time thinking about it.
“There are three key themes at the moment,” says Stewart. “Private airlines like Surf Air or JetSuiteX offering fixed schedules; digital brokerage like JetSmarter, Victor and others; and plane sharing.”
He is not convinced all of them will necessarily succeed. “As a former consultant to United I know how tough the airline market is. Airlines have trouble making money when they cannot fill aircraft. It is much harder with five or six passengers and smaller aircraft,” says Stewart. “But we are not in this market so I don’t know how big it can become.”
Stewart is also unsure if selling individual seats on other routes will work.
“Plane sharing is still unknown.”
“Plane sharing is still unknown. It seems to work on some fixed routes but I am not sure how big this,” says Stewart. “But we are seeing JetSmarter and Wheels Up try it.”
Although he is watching new business models closely he does not see any direct competitors. “We operate in a very different market. Our customers are prepared to pay more for a whole aircraft and have customers with very different requirements,” says Stewart.
XOJet and its 41-aircraft fleet are included in both the Aircraft Search and the Floating Fleets sections of FlightList PRO‘s multi-search platform along with all 232 floating fleet aircraft and 14 operators. Free 30-day trials available here.
But he is convinced that digital brokers will shape the industry. “Digital brokerage is the idea that customers can push a button and get a jet. This is happening. This is a real thing. You have to have an app and online offering.”
JetSmarter announced what it called a strategic partnership with XOJET in 2016. JetSmarter favours XOJET aircraft when its customers charter mid-size aircraft and JetSmarter is developing an app for XOJET customers. Significant XOJET customers – ones spending more than $200,000 a year – also get free membership of JetSmarter.
Stewart is a member of JetSmarter’s board and believes that tech company is not understood by many in the market. “JetSmarter is first and foremost a digital story and secondly a plane story,’ he says. “JetSmarter is the undisputed leader in business aviation.
Private equity typically does not hold on for 10 years but Stewart says that XOJET’s investors and co-owners TPG and Mubadala are prepared to wait. “TPG is a wonderful investor,” he says. “We are responsible for getting a great return but there is no pressure for us to sell.” He is an adviser to TPG on aviation and points to its investment in TMC as its support for the sector.
“I am not the sort of person who is jealous of someone with a washboard stomach.
He laughs when asked if he is jealous of JetSmarter’s valuation. “I am not the sort of person who is jealous of someone with a washboard stomach. My parents taught me to be happy with what I have and I am very proud of XOJET.”
He adds: “It is fantastic being responsible for a whole enterprise. I wake up in the morning and go to run a $500 million business with thousands of clients who are interesting people. It is also satisfying seeing how the business has changed,” says Stewart, “and we have not reached our full potential yet.”
By Alasdair Whyte, Corporate Jet Investor
Part 3 of 3
Source: Alasdair Whyte, Corporate Jet Investor, 6/16/17
All 41 XOJet charter aircraft are available in the FlightList PRO multi-search platform which includes all 16,631 charter aircraft and 3,419 charter operators worldwide. FlightList PRO is used by the most successful and experienced brokers and travel professionals in the industry; 80% of users have arranged charters more than 10 years, 25% more than 20 years.
Air Charter Alerts by FlightList PRO, are the latest announcements in the private air charter industry about operators, brokers and charter aircraft, and geared towards active participants in the industry.