Private Jet Services Face Identity Crisis

There’s no symbol of luxury quite like a private jet.

Travelers skip the lines and every nuisance associated with commercial travel. Flight schedules are completely tailored to the whims of the traveler’s schedule, and there’s no need to deal with other passengers.

But there are also questions around the morality and longevity of private aviation amid rising concerns of cost transparency and the impact of planes on the environment.

Despite this, the market for private aviation seems to be growing. As we reported in 2018, consumers’ shifting prioritization from ownership to access is shaking up traditional luxury markets, including private aviation. With a healthy economy and constant search for outdated markets in need of disruption, on-demand corporate flight travel is ripe for the picking.

The democratization of private aviation started with the introduction and growth of new networks, platforms, and services making private jets, or at least a seat on one, more shareable, either through fractional ownership or the ability to sell open seats.

The on-demand or sharing economy drives system efficiencies. This means greater accessibility at lower price thresholds, which makes private flights available to a broader market cohort.

The private aviation market has been ripe for disruption for some time, but what we see now is consolidation among brands that bet on technology on one side and an effort to differentiate with personalization and physical assets on the other.

Service First

Is private aviation a transaction or an experience? Is its worth measured by how the client is catered to, or how easily they book and secure last-minute flights? In a strong economy, legacy and new players are looking for a way to differentiate themselves to a growing customer base.

Recently celebrating its 20th anniversary, Jet Linx is one of the more established players in the market. The jet card membership and private jet management company has 18 private terminals across the United States. Jet Linx CEO Jamie Walker says these private terminals are the company’s unique selling proposition.

“When we looked at the business 20 years ago,” said Walker, “we quickly identified that [was the] missing aspect in the customer service experience. While companies do a great job of flying from A to B, none of them were actually localizing that experience and providing clients with any sort of hand-holding to elevate that customer experience.”

Most passengers using private jets go through the fixed based operator, its lobby is filled with different customers using different operators. “The private terminal is really our stage to perform from,” said Walker. “It not only gives us a private setting to craft that experience, it also houses our local team. When our New York clients call our New York team members, they’re calling team members at that private terminal.”

Despite the massive role that technology has in changing the private jet experience and what is possible in terms of access and booking, Walker said customer service remains an integral part of any luxury travel experience.

“The cornerstone of our business is built on personal relationships.When our clients leverage the technology that we’re putting in the palm of their hand, we have more time to actually serve our clients in their coming and going.”

That said, high tech also has to be part of the growth equation, especially to appeal to younger clients. Following the trend toward pay-by-the-hour models, à la Uber, Jet Linx launched its response — a new flight-sharing program called OpenSeat Exchange — in July. The company counted 40,000 empty seats on Jet Linx flights in 2018, making the new offering also a win for the company, which now has a new income stream on previous lost supply.

Walker, as well as other luxury leaders, are still learning how to strike the balance between the influence of technology and service and communication.  “I do think that the technology and speed of that technology is going to be the single biggest contributor [to client growth] over the next year, three years, five years, even 10 years. Technology is the backbone of the growth of our industry. That’s not only from a consumer perspective, it’s also from an operator perspective.”

Competition AND Consolidation

The goal of many private aviation providers is to disrupt the previous framework and invite more people to fly private — while maintaining a feeling of exclusivity and service. These companies want private aviation to be more accessible and efficient. While competition increases, some companies find that acquiring smart technology is the fastest way to innovate.

Vista Global entered the private aviation market with a pay-by-the-hour program similar to NetJets.

In April 2019 VistaGlobal purchased JetSmarter in the midst of the latter company’s legal maelstrom. JetSmarter was developed with the intention of letting users book private jets from a mobile app.

This was not Vista Global’s first acquisition — it bought XOJet in 2018. It has now merged its two assets, mobile technology and solid inventory, into its new product XO.

“We noticed demand shifting steadily towards digital solutions in the industry, and this was our opportunity to address the $11 billion per year global market for on-demand business aviation,” said Flohr.

Flohr is bullish on continued growth based on the past 12 months during which Vista Global flew 115,000 passengers and clocked in 60,000 flights on its 116 planes.

“We’re starting to see a new market of fliers moving up from commercial first and business class,” said Flohr. This fulfills our vision to serve every single customer in the business aviation market while offering more flexibility,”

Other Concerns

There are other concerns for private aviation providers, including increased competition from established and newly sprouted players. Cost transparency is also becoming an important factor in an industry where multiple fees and exorbitant extra costs tend to muddy final costs.

Climate concerns have risen to the top of the news cycle in recent weeks. Private aviation is an easy target, as it’s considered a luxury asset which contributes to pollution for a small group of people’s convenience. The providers we spoke with, however, were not immediately concerned with the news cycle impacting their clients’ habits.

“This may be stating the obvious, but the use of aviation will never go away whether it is commercial or private aircraft. People need to travel through the year to conduct business and their family lives,” said Walker.