{"id":1235,"date":"2016-06-14T08:23:21","date_gmt":"2016-06-14T14:23:21","guid":{"rendered":"http:\/\/flightlistpro.com\/private-jet-charter\/?p=1235"},"modified":"2016-06-14T08:23:21","modified_gmt":"2016-06-14T14:23:21","slug":"start-ups-selling-seats-on-private-jets-dont-always-make-it","status":"publish","type":"post","link":"https:\/\/flightlistpro.com\/private-jet-charter\/start-ups-selling-seats-on-private-jets-dont-always-make-it\/","title":{"rendered":"Start-Ups Selling Seats on Private Jets Don\u2019t Always Make It"},"content":{"rendered":"
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By MATT KRUPNICK \u00a0| \u00a0THE NEW YORK TIMES \u00a0| \u00a0<\/span><\/span>

Dannel Schwartz was agonizing over his wife\u2019s 60th birthday gift when she proposed an idea herself.<\/p>\n

\u201cShe said, \u2018You know, I don\u2019t want to wait on another T.S.A. line. I want a private plane,\u2019\u201d said Mr. Schwartz, a retired rabbi who splits time between Florida and Maine. \u201cWe laughed. Then comes this email about how it would cost $4 a flight.\u201d<\/p>\n

Intrigued by the all-you-can-fly model offered by BlackJet, the couple in March paid $15,000 for a membership that would allow them cheap seats on private jets with empty spots, scheduling their first trip for the weekend of April 30.<\/p>\n

But it quickly became clear that the Schwartzes would not be making the flight to New York. The company stalled when Mr. Schwartz tried to confirm the flight a few days before it was scheduled.<\/p>\n

A few days later came even worse news in an email from BlackJet.<\/p>\n

\u201cIt is with great regret and personal disappointment that I need to report the following,\u201d wrote the company\u2019s chief executive, Dean Rotchin. \u201cRecent events have resulted in abruptly ceasing BlackJet operations.\u201d<\/p>\n

The Schwartzes\u2019 $15,000 was gone. They said they had wired the money to the company, which told the couple it was no longer accepting credit cards.<\/p>\n

\u201cNot even one trip,\u201d said Mr. Schwartz, 70. \u201cIt\u2019s embarrassing to go through this.\u201d<\/p>\n

Dannel Schwartz at the former location of BlackJet, a private jet broker in West Palm Beach, Fla. \u00a0Mr. Schwartz lost a $15,000 membership fee when the company shut down. Credit Scott McIntyre for The New York Times<\/p><\/div>\n

The Schwartzes\u2019 experience is a warning to travelers considering start-ups that offer relatively inexpensive access to private jets, once out of reach to the average customer. New companies pop up frequently, many with apps that allow travelers to book seats in minutes. But not all of them will survive.<\/p>\n<\/div>\n<\/div>\n

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BlackJet was founded in 2012 and aimed to apply the Uber model to private jets. It was backed<\/a> by a founder of Uber, Garrett Camp, and celebrities like Ashton Kutcher. But about a year after it began, it laid off staff<\/a> and suspended service. It later shifted to the membership model, which allowed customers to find unused seats on nearby jets. That is what enticed the Schwartzes, who found that travelers who join can be on the line for thousands of dollars.<\/p>\n

In his email to clients last month, Mr. Rotchin said \u201cinaccurate bad press\u201d had caused BlackJet\u2019s sudden closing, a reference to a TechCrunch<\/a> article<\/a> in April that incorrectly reported that the company had expired, which dented membership sales. He also blamed delays in short-term and long-term financing.<\/p>\n

But in an interview late last month, he said the collapse happened mainly because a BlackJet official who was crucial to operations left the company, though he would not name the executive.<\/p>\n

Mr. Rotchin acknowledged that the private jet business was inherently risky and said that the company stopped accepting credit cards late last year because of high fees.<\/p>\n

\u201cEverybody knew when they signed up that there would be no refunds,\u201d he said. \u201cThere is some risk when you pay upfront for anything.\u201d<\/p>\n

Another company, Beacon, shut down this year after finding that its membership-based, all-you-can-fly model for private flights between New York and Boston was not sustainable.<\/p>\n

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The BlackJet app provided information on available seats on private jets.CreditBlackJet, via PR Newswire<\/p><\/div>\n<\/div>\n

For travelers looking into private jet services, Robert Mann, an airline industry analyst and consultant, suggests considering companies that have a history and own their own planes, as opposed to BlackJet, which acted as a broker, matching travelers with empty seats. Several major or developing players \u2014 some of which have evolved since their founding \u2014 have their own fleets, including the 10-year-old XOJet and the 2013 start-up Surf Air.<\/p>\n

Too many start-ups are playing fast and loose with both safety and finances, said Mr. Mann, citing the 2005 crash of a Platinum Jet plane at Teterboro Airport in New Jersey. Federal authorities said the accident, which led to several felony convictions, illustrated the need for better oversight<\/a> of charter companies.<\/p>\n

\u201cIt really is the Wild West,\u201d Mr. Mann said, referring to recent charter jet accidents in Massachusetts<\/a> and Ohio<\/a>.<\/p>\n

Executives who have tried \u2014 and sometimes failed \u2014 to \u201cdemocratize\u201d private aviation are not giving up. Mr. Rotchin first tried out the plane-hailing concept with Greenjets, which fell into financial trouble and reorganized, becoming BlackJet. He is now considering his next move, but he said he realized that failures like these raise investors\u2019 skepticism and make it more difficult for start-ups to raise money.<\/p>\n

A founder of Beacon, Wade Eyerly, is now at Wheels Up, which counts the tennis star Serena Williams and the sports broadcaster Erin Andrews among its members. Mr. Eyerly, Wheels Up\u2019s managing director, acknowledged that Beacon had miscalculated the demand for flights between New York and Boston.<\/p>\n

\u201cBeacon was a failure to execute,\u201d he said. \u201cThere\u2019s no way to sugarcoat that.\u201d<\/p>\n

But he remains optimistic about consumers\u2019 desire for private air travel, he said. Wheels Up, he noted, is offering a range of memberships and more destinations, and it operates its own fleet through contractors. He also advised consumers to conduct thorough research before choosing a company.<\/p>\n

\u201cIn a technology-driven world, little companies and big companies can look similar,\u201d said Mr. Eyerly, who also helped start Surf Air.<\/p>\n

With so many competitors in the private aviation world, travelers can have difficulty telling the difference between stable and shaky companies. Mr. Schwartz, for example, said he looked into BlackJet before buying a membership, but nothing he found indicated that the company would crumble so suddenly.<\/p>\n

\u201cRed flags should have gone up, but they didn\u2019t,\u201d he said, adding that he should have looked deeper into the company before paying.<\/p>\n

Those kinds of failures threaten to erode trust in the industry, said Alex Wilcox, chief executive of JetSuite, a seven-year-old jet charter company based in California with its own fleet.<\/p>\n

\u201cWe\u2019re all going to be painted with the same brush,\u201d he said. \u201cBut I think people understand the difference between Spirit Airlines and Singapore Airlines. Hopefully, we can distinguish ourselves in the same way.\u201d<\/p>\n

Mr. Wilcox, Mr. Eyerly and others in the industry said potential customers should look as closely as possible at a company\u2019s financial backing before paying. Talk to the executives and ask tough questions, they said, which is more easily accomplished at small start-ups.<\/p>\n

A lot of newer companies just do not have a chance of surviving because the cost of operating jets is so high, said Sergey Petrossov, the founder and chief executive of JetSmarter, which several industry insiders said was a successful example of an aviation start-up, allows members to reserve seats on charters and other private planes using an Uber-like app. Although it allowed nonmembers to book seats until last week, only members may use the service now.<\/p>\n

\u201cThis industry as a whole really operates in an unsophisticated way,\u201d he said. \u201cAnyone who isn\u2019t implementing sophisticated math and yield management isn\u2019t going to survive.\u201d<\/p>\n

Source: \u00a0New York Times online article 6\/13\/16
\n<\/a><\/strong>Full article here: \u00a0Start-Ups Selling Seats on Private Jets Don\u2019t Always Make It<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By MATT KRUPNICK \u00a0| \u00a0THE NEW YORK TIMES \u00a0| \u00a0JUNE 13, 2016 Dannel Schwartz was agonizing over his wife\u2019s 60th birthday gift when she proposed an idea herself. \u201cShe said, \u2018You know, I don\u2019t want to wait on another T.S.A. line. I want a private plane,\u2019\u201d said Mr. Schwartz, a retired rabbi who splits time […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[43],"tags":[89,45,101],"class_list":["post-1235","post","type-post","status-publish","format-standard","hentry","category-private-aviation-industry-news","tag-air-charter-broker","tag-air-charter-news","tag-private-aviation-news"],"yoast_head":"\nStart-Ups Selling Seats on Private Jets Don\u2019t Always Make It - Jet Charter News Alerts, Broker-Operator Directory - FlightList PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/flightlistpro.com\/private-jet-charter\/start-ups-selling-seats-on-private-jets-dont-always-make-it\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Start-Ups Selling Seats on Private Jets Don\u2019t Always Make It\" \/>\n<meta property=\"og:description\" content=\"By MATT KRUPNICK \u00a0| \u00a0THE NEW YORK TIMES \u00a0| \u00a0JUNE 13, 2016 Dannel Schwartz was agonizing over his wife\u2019s 60th birthday gift when she proposed an idea herself. \u201cShe said, \u2018You know, I don\u2019t want to wait on another T.S.A. line. 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