Jet Set, Go
Revolutionary times for the private jet industry
For more than half a century, the world’s population could be divided into two groups of people: the private jet haves and the private jet have-nots. Since the first Learjet flight in 1963—an event regarded by many as the birth of the modern industry—these exclusive aircrafts have been multi-million-dollar items of luxury and excess for a few of the planet’s richest.
At least that was how it used to be. Today, a disparate collection of tech companies around the world is disrupting the entire industry and bringing prices crashing down to earth.
It wasn’t so long ago that there were three basic ways to get regular access to a private jet. Option one: buy one—though that comes with on-going running costs (fuel, maintenance, pilots, caviar, the list is long indeed). Option two: fractional ownership. This timeshare model brings the costs down, but owners will eventually have a clash of diaries and someone will have to compromise, not something any self-respecting millionaire is willing to do when it comes to transportation.
The last option is to charter a flight. It is the most cost-effective option for single flights, but for those who need to fly on a regular basis, these costs can stack up pretty quickly. In fact, fly charter flights often enough and it becomes cheaper to buy the jet—and you are back to option one.
Naturally, technology entrepreneurs and the internet have something to say about this state of affairs. Just as the global taxi market has seen a seismic shift thanks to Uber and the hospitality industry has had to change in the face of Airbnb, the private jet industry is currently being disrupted by a range of players with varied business models. Their collective aim? To make us all part of the jet set.
Members With Benefits
Perhaps unsurprisingly given its population, economy and geography, North America is leading the way. California-based SurfAir, named one of America’s most promising companies of 2015 by Forbes magazine, offers unlimited access to up to 90 daily flights between 12 American destinations for US$1,750 a month.
“As air travel continues to mature, alternatives to commercial travel continue to evolve as well,” says Surf Air CEO Jeff Potter. “This includes the private aircraft industry and technology solutions to make private jet travel more affordable. We expect that alternative forms of air travel will continue to develop and evolve as the customer seeks more convenience, efficiencies and economic value—and [the] travel industry continues to grow in demand.”
On the other side of the country at New York-based Wheels Up, individual or family membership costs a one-time initiation fee of US$17,500 followed by annual dues of US$8,500 from the second year on. Members gain access to the company’s private fleet of King Air 350i and Citation Excel/XLS aircraft, but must pay for travel (on top of membership costs) whether on a pay-as-you-fly basis or with pre-paid packages. The company stresses that there are other benefits of membership, including having a dedicated team that helps you book a flight, update itineraries and arrange ground transportation or catering.
In 2013, Wheels Up made the largest order in history for general aviation turboprop aircraft. This means they have their sights set on a fleet of up to 105 twin-turbo King Air 350i aircrafts, which is used by military forces around the world and popular among private, corporate and government operators. The company plans to expand to Europe next year and says it will need between 100 and 150 new airplanes.
Other companies looking to revolutionise the industry include New York-based Beacon, which offers “all-you-can-fly” packages for US$2,000 a month, although these are currently limited to destinations on the US East Coast. Florida-based BlackJet is not an owner or operator of aircrafts, but instead handles bookings, concierge services, logistics and membership services. Members still have to pay for flights booked via the service but BlackJet does promise guaranteed seats and the option to pay after you fly.
Over in Europe, London-based Victor works with more than 100 regional operators and was this year placed 15th in The Sunday Times Hiscox Tech Track 100. The list ranks the UK’s 100 private technology companies with the fastest-growing sales over the previous three years. Its modus operandi: an on-demand private jet charter service that allows owners of private jet fleets to take direct bookings. It offers a somewhat disruptive level of transparency in an industry that has historically seen brokers skim commission fees from jet owners and would-be passengers.
Some operators are already making a play for global domination. From offices in the US, Zurich, Moscow, Dubai and Riyadh, Florida-based JetSmarter works with a partner network of more than 800 operators around the world, offering a membership programme for frequent fliers. A fixed annual fee of US$9,000 a year buys members access to 35,000 hours of pre-purchased private flights with no additional costs.
At the heart of its offerings is a smartphone app, perhaps the highest profile of its kind in the industry thanks to US$20 million in funding earlier this year from a group of investors including US rapper Jay Z and the Saudi royal family. The company hopes this enviable marriage of tech and glamour will give the service the critical mass required to make it the industry leader. In other words, JetSmarter CEO and founder Sergey Petrossov is working on making private jet more accessible to a broader audience.
“This is the age of technology, accessibility and sharing, and the private aviation industry is just beginning to adopt these economic principles,” says Petrossov. “We hope to make private aviation accessible to the masses by consolidating aircraft utilisation for efficiency, thus lowering the price and distributing through mobile technology.”
These new developments won’t be reserved just for North America and Western Europe, says Petrossov. “We are aggressively expanding our philosophy in North America, Europe and Middle East. In the next two years we will push heavily into Latin America and Asia Pacific.”
Industry observers are watching these developments closely and some say there may be consolidation before these trends shape the future direction of the global business. Meanwhile, regular flyers of more modest means may soon get to skip straight to the sky-high luxuries of private aviation.