A Look at the Business of Private Jet Charter

In the 1950s airline travel was deemed a luxury as very few people traveled overseas. Travel by aircraft was expensive and the operations set up to service the needs of those that did utilize this new method of transport, didn’t enjoy the economies of scale the likes of British Airways and Lufthansa enjoy today. Aircraft were subject to weight limitations and thus in many cases, luggage was sent independently on another aircraft, ahead of the passengers. Waiting staff were included on these early airline flights to ensure that the service was similar to that experienced on the luxury liners of the day. Some aircraft even carried projectors to show in flight entertainment.

These days technology has opened up this business to the masses and much of the developed world would consider air travel as the primary solution in traveling overseas. These increased volumes have reached the stage whereby the business has become a victim of its own success. Airports are full to capacity, security queues are lengthy and tedious and competition is such that airlines no longer look at setting themselves apart on service. They are setting themselves apart on cost, and in doing so are reducing the level of service. This has almost certainly fueled increased demand in the air charter market. Those travelers lucky enough to have the resource to travel by private jet do so for one or all of the following reasons:

1. They don’t waste precious time checking in 2 to 3 hours before a flight departs.
2. Departure time is dictated by the passenger, not by the aircraft operator.
3. Smaller airports can be used by Private Jets, thus there is less congestion at these facilities.
4. Travelers can take an aircraft from airports closer to home, and arrive at airports closer to their intended destination.
5. The on board service is tailored to the needs of the passengers.
6. Business passengers are often subjected to strict meeting timetables. Private jets can exercise more flexibility in terms of timings and destinations, thus a 3 day trip on a scheduled airline could be squeezed into a one day trip on business jet.
7. Celebrity passengers can retain an element of privacy away from the prying eyes of the paparazzi.
8. Many private jets now have Wi-Fi facility on board as well as telephone equipment. Thus even time in the air can be productive which is useful if embarking on a 7 hour flight from London to New York.

In essence the majority find it obscene that individuals can justify so much expense by flying on Private Jets or helicopters. There is no doubting that it is expensive but where there is a market for such a service, should it be mocked? If we take a step back to look at the jobs and wealth created from pilots and flight attendants through to airport staff, engineers, insurers, cleaners and catering suppliers. There are private jet travelers who may spend £20k a year on flying private charter, and there are those who spend millions. What we have to consider is that all of this money goes back into the economy which is more that can be said for the £billions used in taxpayer bailouts of the banks.

Then there are the environmental factors. Of course this is a huge concern because of the irreversible nature of these effects. Many firms however, have embarked on initiatives to offset their carbon impact. I am personally not a great fan of the schemes that donate a percentage to a fund that doesn’t appear to do much environmental work, but there are some that plant trees for every X amount of air miles flown. We also have to consider the massive increase in fuel efficiencies that aero engine designers now make a priority in all of their research work. Private Jets are subject to much less delay than their airline counterparts and so, generally speaking, contribute significantly less environmental impact.

Essentially this is a market that is set to grow as the mainstream airline services continue to chase cost cuts and deal with passenger numbers increasing at a faster rate than the infrastructure can cope with. Bombardier in collaboration with GAMA (General Aviation Manufacturers Association) forecast that over the next 10 years there will be demand for 9950 aircraft at a total revenue of $228 billion. This is up from $104 billion in the previous 10 years. Bombardier’s closest rival Gulfstream had an unprecedented response to its G650 launch with 100 firm orders received within three months.

These firm orders to date now stand at 200. In addition to the firm orders, JP Morgan analysts confirm that Gulfstream have a further 400 letters of intent to date. Such success has led Bombardier CEO, Pierre Beaudoin, to announce their intentions to develop a flagship aircraft with 7000 nautical mile range. Even in the midst of the downturn, it is evident from aircraft shipment data that the Private Jet market is displaying resilience. In the first 3 quarters of 2009, 615 business jets have been shipped globally with Bombardier leading the revenue figures at $3.95 billion.

Whilst there are movie stars who need to attend a film launch tour, pop stars with concerts in different cities every night, and business men that need to undertake meetings in the same day, thousands of miles apart, then there will always be demand for Private air charter. Maybe the increase in numbers utilizing private jets will give rise to more opportunity, greater accessibility and increased competition for future private travelers.