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Private Jet Operator JetSuite Takes Advantage of Big-Name Investors and Facebook Fans

Mar 16, 2014 8:07 am

Skift Take

JetSuite’s investors and board members include JetBlue founder David Neeleman and Zappos CEO Tony Hseih. The private jet operator has on-demand model that enables some bargain-hungry travelers to fly like the 1%.

— Dennis Schaal

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JetSuite

JetSuite pilots Karine N., Ashley O., Alaina M., Courtney C., and Jessica D. represented JetSuite at the Women in Aviation International Conference last week in Lake Buena Vista, Florida. JetSuite


Private-jet operator JetSuite has achieved a measure of commercial air service fame from 40,000 friends who presumably check its Facebook page for a chance to book a thrifty flight on a 450 mph, four-passenger Embraer Phenom 100 jet.

That could result in a trip with the perquisites of private air travel for a total cost of $536 for the whole plane. But despite its cachet with bargain seekers, JetSuites’ primary operations provide flights when and where passengers might want to fly, serving 2,000 U.S. airports.

JetSuite started in 2009, charging aviation pioneer Burt Rutan $20 for a flight between Long Beach, Calif., and the Mojave, Calif., airport, Rutan’s base for launching a privately built, manned vehicle into space.

Last year, JetSuite flew more than 9,000 on-demand flights, including 100 or so at Tampa Bay area airports. Chief Executive Officer Alex Wilcox expects the number will increase once it expands Midwest operations and can capitalize on that area’s Florida demand.

On-demand flights might cost $7,775 for a trip between Tampa and Atlanta on a 480 mph Citation CJ3 that can seat up to seven, or $13,750 for a flight between Tampa and New York. Flights on average cost about $3,500 an hour.

“Our vision is to allow people to avoid the tyranny of airports,” Wilcox said, espousing the mantra of private jet operators in the post 9/11 security era that’s characterized by major airlines trimming flights to operate economically with crowded flights.

JetSuite’s plan is to differentiate itself from a handful of major nationwide operators of private jet travel, such as NetJets and XOJet, banking on top management and investors with a background steeped in entrepreneurship.

Those include JetBlue and Morris Air founder David Neeleman. After selling Morris Air to Southwest, Neeleman founded JetBlue and then went on to create the Braziilian airline Azul. Also on the JetSuite board is Zappos CEO Tony Hseih, regarded for his roles in creating innovative retail customer service.

Wilcox worked as a college intern for Southwest Airlines in Dallas and later worked for Richard Branson’s Virgin Atlantic at Connecticut headquarters in customer service.

He met Neeleman while at Virgin Atlantic and was hired in 1999 as JetBlue’s second employee, taking charge of the New York-based airline’s customer service.

Wilcox later worked for Kingfisher Airlines in India, then was hired to write a business plan for Magnum Air, the forerunner of JetSuites, whose ownership was suitably impressed enough to hire Wilcox.

That paved the way for Wilcox to contact Neeleman when JetSuites sought to expand its investment base in 2011.

“Entrepreneurs look for ways to improve product and lower costs,” Wilcox said. “From Neeleman I learned the virtues of low costs, from Branson the virtues of brainstorming and getting the word out on the brand,” Wilcox said. The Southwest experience involved a combination of lessons stressing quality of service with an eye attuned to costs.

Although private jet operators in recent years recruited investors and management teams with commercial aviation backgrounds, many have succumbed to challenges from doing business in the recession along what likely have been self-induced problems.

Delray Beach-based DayJet began operations in 2007 and ordered 200 three-passenger jets, created innovative software to compile schedules for individual passengers’ itineraries and established focus airports called Dayports.

Those included St. Pete-Clearwater International Airport, where individual travelers would fly, air-taxi style, on trips expected to range up to 400 miles.

Various financial problems, including the recession and the inability of founder Ed Iacobucci to generate an additional $40 million on top of more than $110 million in initial investment funding, forced DayJet to stop flying in 2008 and file for federal bankruptcy protection.

Clearwater-based Avantair, which operated as a fractional operator that sold portions of the aircraft it operated to the public, then contracted to fly them, ran into myriad business problems and was forced into involuntary bankruptcy last year.

JetSuite owns most of its aircraft, including 10 of its 13 Embraers and all seven of its Citations. It employs its pilots at salaries between $85,000 and $110,000, with first officers making about half that.

Pilots are 20-plus year military retirees and others drawn from larger commuter airlines, with company employees providing most of the maintenance.

The privately held JetSuite does not release financial data, but it has cited 2,041 flights in 2010, 4,270 in 2011, 5,679 in 2012 and a projected 9,000 in 2013.

One of the issues JetSuite officials faced was how to avoid empty seats during a flight to reposition an aircraft to an airport with on-demand customers. That’s commonly called an “empty leg flight.”

“One genius in 2011 said, ‘Why not sell them (the empty leg flights) on Facebook for $500?'” Wilcox said.

“So now we have 40,000 Facebook friends looking for a needle in the haystack, an inexpensive flight that suits their needs. We got a lot of notoriety from that.”

tjackovics@tampatrib.com

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