Charter Broker Updates

Private jet charter booking platform Stratajet announced an influx of $8 million in additional funding. The new investment, which adds to $6 million in capital previously raised, came from London-based venture capital group Octopus Ventures, with support from Stratajet’s existing backers Playfair Capital and JamJar Investments. UK-based Stratajet launched its platform to consumers earlier this year and according to the company has since generated more than 2 million charter flight quotes. “This milestone of Stratajet generating two million quotes proves how effective our system can be at giving a wider range of travelers access to the private jet industry,” said Stratajet founder and CEO Jonny Nicol. “Unlike other online brokers, we can provide all customers with accurate prices without wasting the time of the operators.” Sources:  AINonline, company press release Other Charter Alerts for StrataJet: 9/17/15 Stratajet Set To Launch Online Charter Booking Engine

-- Private jet charters Blackjet, Blue Star Jets and Beacon, among others, have ended operations in recent months, citing funding difficulties as well as problems securing planes, among other issues. --

With commercial airlines soaring, why have some private jet start-ups failed?

By Hugo Martin, Los Angeles Times, May 21, 2016 The nation's commercial airlines are reporting soaring profit margins and enough revenue to invest billions of dollars in new planes, airport lounges and even designer-made employee uniforms. So why hasn't that success extended to the fleet of private jet start-ups that launched in the last few years? Private jet charters Blackjet, Blue Star Jets and Beacon, among others, have ended operations in recent months, citing funding difficulties as well as problems securing planes, among other issues. Many of the new jet charter businesses have tried to jump on the popularity of the "shared economy," with some comparing themselves to the ride-hailing business Uber. The private jet businesses have also promoted themselves as a way to avoid long airport security lines.

"There was this feeling that we have this unmet demand," said Brad Stewart, chief executive and president of XOJET, a San Francisco-based charter jet business. But according to industry experts, too many of the charters either overestimated the demand or underestimated the funding needed to keep the businesses in the air. Commercial airlines can squeeze more seats into each cabin and use each jet as extensively as possible to keep costs down, but private charter jets don't have that option, said Seth Kaplan, managing partner at the trade magazine Airline Weekly. "The economics of small private jets are not the same as the economics of commercial carriers," he said. The most publicized failure was the sudden closure of Florida-based BlackJet, which was backed by tech executives and Hollywood celebrities including Ashton Kutcher, Jay-Z and Will Smith. It collected annual membership fees of $3,000 and up plus fares starting at about $950 to share a ride on other people's jets. BlackJet Chief Executive Dean Rotchin wrote a letter to members of the business May 5, saying he was "abruptly ceasing Blackjet operations," citing "bad press," the departure of a "critical team member" and finance problems. Source:  Los Angeles Times

Source:  Company Press Release

All types of empty leg charters –  business turboprops through long range jets – available throughout the U.S.

New Flight Charters announced today that it is making available over 150 jet charter empty legs focused on the top private jet destinations nationwide. These empty legs are available across the country, and are created when an aircraft needs to move for one reason or another, such as to pick up its owner, or returning home from a factory servicing, or returning to base after a charter flight. This need to move the aircraft can result in low point-to-point pricing, and can be the absolute best values in private jet charter. For example, a typical empty leg can be booked at around 50% the cost of a regular jet charter. Currently, a Los Angeles to Las Vegas empty leg in a Beechjet 400A seating 8, lists at $2,900. While, a normal charter rate for this routing is around $6,000. Click to view the complete list of available empty legs. “The most common misperception is that empty legs are available between only those cities or airports listed,” said Rick Colson, President of New Flight Charters. “Empty legs are usually listed as between two certain airports or cities because this is actually the departing and arrival points the aircraft is going, “he added. “However, a charter can be flown anywhere along that very general route and direction. For example with a empty leg listed from Scottsdale, AZ to Philadelphia, PA, the aircraft can fly a charter from Los Angeles to New York at a discounted one-way price,” said Colson. One-way charters may have a special cancellation clause because of their price advantage and their need to arrive at the other end. The aircraft may have a charter booked after the current one-way, which is dependent on it being in that vicinity. At any given time, hundreds of empty legs are scheduled in the jet charter industry.  New Flight Charters has culled them to 150 of the most popular destinations.  Any other destinations and routings can be searched by request. Generally speaking floating fleet aircraft have a standard cancellation policy and true empty leg charters are non-cancelable upon booking. Visit the nationwide empty legs list at NewFlightCharters.com or the specialty location Denver Jet Charter or Colorado Empty Legs for Denver, Aspen and other Colorado private jet charters. Source:  Company press release

  Fortune.com May 5, 2016: BlackJet, an on-demand private jet service created by Uber co-founder and chairman Garrett Camp, yesterday informed members that it is “abruptly” ceasing operations. The Florida-based company was launched in 2012, with the financial backing of venture capital firms (including First Round Capital and CrunchFund), tech executives (including Mark Benioff and Matt Mullenweg) and celebrities (including Ashton Kutcher, Jay-Z, and Will Smith). The idea was basically to be Uber for the jet-set, eventually settling into a membership model whereby people paid an annual fee in exchange for access to a network of private jets on which they could book seats. But there were numerous hiccups (including layoffs and a prior service suspension), largely due to capital constraints that seem to have persisted. During the reorganization, Camp was among those who moved on (and gave up his investment). In fact, TechCrunch inaccurately reported last month that the company had shut down, an incident that BlackJet CEO Dean Rotchin appears to have cited among the reasons for today’s decision (the story was later updated with a correction). A bigger one, however, was financing. “We probably did more with less than anyone but it’s a critical mass business… There’s a reason why ‘critical’ is part of ‘critical mass,'” Rotchin tells Fortune. “The members were super supportive, the VCs wanted to see our progress continue over a longer period prior to jumping in. There are some aggressive interesting models out there today, someone will make this work.” Below is Rotchin’s full email to members:

Dear Member:

It is with great regret and personal disappointment that I need to report the following. Recent events have resulted in abruptly ceasing BlackJet operations.

In the last few days, there was some inaccurate bad press that stunted membership sales, a critical team member stepped down unexpectedly, near-term and longer term financing opportunities were delayed, and it became impossible to continue.

I personally appreciate the amazing support from most of our members. Perhaps I did not do a good enough job of reinforcing the fact that the membership was the key to the ability to deliver the service. Some members were so supportive, and I feel it is important to highlight this aspect because it became evident how most members tried to be as helpful, flexible and cooperative as possible. This was and is very much appreciated.

We are widely considered the pioneers in this field, and we know someone will leverage our learning and crack the code for making the private airfields and private jet fleet affordable and accessible as a part of the US transportation system. Your vision and involvement as early adopters helped to progress this ideal closer to fruition.

Please accept my thanks for your support, and also my sincere apologies for the inconvenience and disappointment this causes.

Sincerely, Dean

Source:  Fortune online article May 5, 2016

Exclusive Charter Service is introducing special fixed-rate charters from various U.S. airports into the country’s main gateway, José Martí International Airport, according to a release from the company. Flights in one of the company’s seven-passenger Piaggio Avanti II twin turboprops from Palm Beach International will be priced at $9,000 each way, or $10,000 from Fort Lauderdale or Miami and $11,000 from Orlando. In a Hawker 800XP, the Palm Beach rate is $10,500, rising to $13,500 from Fort Lauderdale or Miami and $15,500 from Orlando.  The same aircraft charter from New York’s JFK International Airport is priced at $19,500. Exclusive’s clearance to operate into Cuba extends to 17 other airports in Atlanta, Austin, Baltimore, Boston, Chicago, Dallas, Houston, Los Angeles, Key West, Minneapolis, New Orleans, Oakland, Pittsburgh, San Juan (Puerto Rico), Fort Myers, Tampa and Washington. It can also offer another 10 different aircraft types, including the Gulfstream G650. Cuba flights are operated by Custom Jet Charters, LLC. Meanwhile, the Florida-based company recently launched a membership program called Aero Club. With an annual membership fee, members receive fixed point-to-point flight-hour pricing for various categories of aircraft. Source:  AIN Online

Flight Options moved forward on Friday with an offer of voluntary separation packages to its pilots as the company lays the groundwork to transform from a fractional operation into an on-demand charter business over the next 12 to 18 months. Flight Options sister operation Flexjet previously made the offer as the two companies begin to reshape their operations, retiring some of the older modelaircraft and moving others into charter.

Flight Options will rebrand as Skyjet, a former Bombardier brand that parent company Directional Aviation recently revived to provide charter brokerage services.

The moves are made as parent company Directional Aviation realigns its more recently acquired Flexjet and Flight Options into complementary services rather than competitors. To help differentiate itself as a planned charter-only entity, Flight Options will rebrand as Skyjet, a former Bombardier brand that Directional initially revived in 2014 to provide charter brokerage services. Voluntary separation packages are being offered to Flight Options pilots through April 30 as the companies seek to reduce the pilot workforce by 70 positions. Directional principal and Flight Options chairman Kenn Ricci told Aviation International News that this comes as on-demand requires less staffing than fractional. The packages were initially offered to Flexjet pilots, who recently voted for representation by the International Brotherhood of Teamsters (IBT) but were not yet under a collective bargaining agreement. Flight Options, which previously had been represented by the IBT, sought union approval to make the offer to its pilots, but the union rejected the request. Flight Options moved forward regardless, and between Flexjet and Flight Options, had 80 pilots indicate plans to accept the agreements—exceeding the company’s goal. The union has, instead, been pushing for a furlough protection plan that would give all furloughed pilots the equivalent of 12 months of compensation. The IBT had expressed concerns that the voluntary program would primarily affect less senior pilots who would not qualify for the maximum benefit. The company management, however, disagreed with the IBT stance. “I refuse to accept the notion that a pilot, under the employ of this company, does not have the right to decide his or her own future,” Ricci said in announcing plans to move forward with the voluntary package offers. “It is unconscionable that the Teamsters should unilaterally try to take away a voluntary and materially beneficial option.” Source:  AINonline, by Kerry Lynch

Jet charter brokerage PrivateFly has opened a dedicated U.S. office at Fort Lauderdale International Airport.  The European company says the launch is a key step forward in its ambitious U.S. growth plans, following strong sales over the past two years. The new team in Florida will handle U.S. client flight sales for any global route. PrivateFly says the location of Miami/Fort Lauderdale was also chosen specifically to target a growing private jet audience in the area - a popular luxury travel destination in its own right, and a key connection point for the Caribbean, Mexico and South America. “PrivateFly’s model is attracting interest from U.S. business aviation customers, who now represent a third of our flight sales," said PrivateFly CEO Adam Tidwell.  “Florida is the third busiest state for business aviation, after Texas and California.  Its private aviation traffic rose by 3 percent in 2015 following the overall U.S. trend, but we expect the first half of 2016 to see greater growth of around 6 to 8 percent. " Source:  company press release