The Future Of Air Charter

Business aircraft travelers enter the 2020s with a variety of tools and options introduced in the last decade: membership programs, per-seat charter, all-you-can-fly plans, and instant booking apps. These offerings evolved from developments in the century’s first decade, including the expansion of fractional ownership and the introduction of jet cards and point-to-point pricing.

What’s next? A handful of providers have taken steps that will enable them to drive the expanding choices you are likely to enjoy over the next decade. Meanwhile, a pilot shortage, a spike in aircraft insurance rates, and costs of meeting avionics mandates like ADS-B are among the challenges that could test the survival of some smaller operators, further shifting power to large yet nimble access providers. 

The companies featured here are doing more than simply adding to their fleets. They’re growing primarily by strategic acquisitions of complementary enterprises, smartly adding programs that customers want, and following well-planned business models. Read on for more about how they’re thriving and what they have in the works.

Directional Aviation Capital

Directional Aviation Capital (DAC) is a private investment firm whose companies provide business aviation access and support services, including fractional ownership (Flexjet), jet cards (Sentient Jet), on-demand charter and booking-app technology (PrivateFly), remanufactured aircraft (Nextant), and aircraft refurbishment (Constant Aviation). Principal Kenn Ricci, who founded DAC in 2007 to fund these businesses, has been building a bizav empire since the early 1980s when he acquired Corporate Wings, a small, Cleveland-based aircraft charter/management firm. 

Flexjet will be the launch customer this year for Gulfstream’s flagship G700, which was introduced in October. The fractional-share provider has also opened a London office to support planned European expansion.

Sentient Jet, meanwhile, has debuted its SJ25+ jet card, which costs $224,275 and guarantees 25 hours of access to Wi-Fi-equipped, year 2000 or newer super-midsize aircraft. The company’s other 25-hour cards include Preferred and Select forms for most varieties, providing access to either year 2000 and newer or pre-2000 aircraft, respectively, while offering guaranteed access, round-trip discounts, liberal callout and cancellation times, and a partnership program that features many on-the-ground perks.

U.K.-based PrivateFly, which DAC bought in 2018, has introduced fixed-price transcontinental programs in the U.S. on Challenger 300s and European city-pair fares aboard the Nextant 400XTi, a light jet made by DAC’s own Nextant Aerospace.

Last year, also, DAC launched Tuvoli, an open-technology charter platform that allows brokers and operators to source, book, and arrange payment for charter and support services. Avinode owns this B2B market now but charges a subscription fee (presumably reflected somewhere in charter rates); Tuvoli charges no ongoing fee.

Wheels Up

With the stated goal of democratizing private aviation, Kenny Dichter, developer of NetJets’ Marquis jet card, launched Wheels Up in 2013. The first charter-fleet membership program, it offers guaranteed access to the company’s owned aircraft at fixed hourly rates. Wheels Up began modestly, utilizing Beechcraft King Air 350i twin turboprops. But it has since expanded its fleet offerings; diversified into charter brokerage; made key acquisitions and technology investments; and established partnerships. 

Among a flurry of recent developments, the biggest is Wheels Up’s merger with Delta Private Jets, a subsidiary of Delta Air Lines, which will add some 70 owned and operated aircraft to the Wheels Up fleet. Most of the additions are large-cabin jets, a category previously absent from Wheels Up’s stable. Moreover, Delta Air Lines will become Wheels Up’s largest investor; the access firm has previously announced more than $550 million in funding. 

Wheels Up also bought wholesale light jet charter operator Travel Management Company and its light jets last year, bringing its fleet total to nearly 120 aircraft. But Dichter apparently sees that fleet and its users as just a stepping stone: at the National Business Aviation Association convention in October, he compared the company’s foundational closed-fleet membership program to Amazon’s book business, which powered its initial growth but now makes up only a fraction of its revenues.

Dichter is bullish on the brokerage side of the access marketplace, and Wheels Up went live last year with its online Charter Marketplace, a search app that gives members access to pricing and instant booking of some 1,200 vetted charter aircraft. Then in September Wheels Up bought flight management software developer Avianis, to help build the digital foundations upon which many industry insiders say tomorrow’s charter market offerings will be built. Wheels Up’s 80-person IT department represents the company’s largest division.

In 2019, meanwhile, the company introduced its entry-level Connect membership ($2,995 for the first year; $2,495 annually for renewals) for travelers flying 10 or fewer hours per year. The program allows participants to buy seats offered for sale by full members on their flights; it also provides access to the fleet at fixed rates on an as-available rather than guaranteed basis.

Vista Global Holdings

After performing the seemingly impossible by making money chartering out a jet he used for his own business, entrepreneur Thomas Flohr founded Malta-based VistaJet in 2004, offering on-demand and block-hour charter on an owned and operated all-Bombardier fleet of bespoke Globals and large-cabin Challengers. In 2018 the company unveiled its worldwide ambitions with the formation of Vista Global Holdings (VGH), an aviation services company with VistaJet as its flagship offering and some $200 million in investment capital to fund complementary acquisitions. 

VGH then bought charter provider XOJet and per-seat charter pioneer and booking app developer JetSmarter and also created a leasing division. Together, these moves allowed the holding company to offer options ranging from per-seat charter to ownership-like leasing of the latest ultra-long-range jets, all without the capital costs of ownership. 

Recently, VGH combined XOJet and JetSmarter into XO, a one-stop offering where customers can select the access option that best suits a particular need and book a seat or aircraft instantly. XO’s Access membership levels are Rise (up to 15 hours, $595 annual fee), Select (up to 25 hours), Signature (more than 25 hours), and Elite (for access to three aircraft categories at fixed hourly rates). All of these programs are available in three tiers: Classic (older aircraft, turboprops to heavy jets, many Wi-Fi-equipped), Premium (newer jets from light to ultra-long-range, all with Wi-Fi), and Luxe (the newest jets from super-mids through ultra-long-range, many with designer cabins and high-end amenities).

Early this year, VistaJet welcomed the Bombardier Global 7500 to its fleet, becoming the first operator to provide the ultra-long-range jet for charter. The flagship program also recently launched VistaJet World, a selection of 15 multi-stop travel adventures offering access to places and experiences that have been curated and tailored to suit individual members’ passions. One adventure allows travelers to join an archaeological team discovering a lost city in the Amazon rainforest and take part in pioneering research while helping to preserve the region’s forests, species, and indigenous cultures. Another is a private tour across the U.S. for meetings with leaders of top emerging health-technology enterprises.

NetJets

Analysts have called fractional shares one of the most expensive ways to fly, and in the wake of the 2008 economic meltdown, some pronounced the business model dead. Still, many people continue to prefer fractional ownership because of its tax advantages, lack of administrative headaches compared with full ownership, and other benefits. 

As the creator of the fractional-ownership concept, Columbus, Ohio–based NetJets holds a position in the business aviation firmament something akin to George Washington in American history: it sparked a jump in demand and production that transformed business aviation, and its reputation has been burnished by its operation of the world’s largest business aviation fleet and its ownership by Warren Buffett’s Berkshire Hathaway.   

NetJets now supplements its signature program with a reinvigorated jet card offering and ancillary services, including a division (QS Partners) to handle customer transitions in or out of a fractional share and disposal of retiring fleet aircraft.

Not long ago, NetJets began selling jet cards, available in 25-hour increments and for specific models. It also added the Phenom 300 and Citation XLS to its fleet. More recently, the company introduced Access, a customized prepaid program (50-hour annual minimum, three-year term) that provides the equivalent of the fractional-ownership experience for one inclusive fixed annual fee, eliminating all other costs and billing.

On the fractional side of the operation, NetJets began taking deliveries at the end of 2019 of 15 new 12-passenger, super-midsize Citation Longitudes. It will start adding Bombardier Global 7500s next year. 

NetJets launched QS Security Services in October, with tiered security packages scaled to the destination’s threat level and passenger needs. Currently, security packages are being offered only at Paris Le Bourget and in Mexico; they will expand through North America and Europe this year and into the rest of the Americas, the Middle East, and Africa next year, with worldwide coverage expected in 2023.

NetJets is also opening a sales office in Dubai, U.A.E., in the first quarter of this year to service the Middle East market. 

Some Notable Smaller Operators

After opening as a fractional-ownership program in 1999, Omaha, Nebraska’s Jet Linx transitioned to a local access/aircraft management company before beginning national expansion of its jet card program a decade ago. Jet Linx teams with a minority stakeholder with strong ties to the business aviation community in each location where it establishes a base. It operates from its own private terminals, and its card members are served exclusively by its managed fleet, allowing Jet Linx to ensure consistent service. 

Jet Linx recently added OpenSeat Exchange, a flight-sharing program, enabling members to buy or sell seats aboard one another’s flights through the company’s mobile app. It also inaugurated proprietary service standards developed by the Forbes Travel Guide and opened its 18^th private terminal, at business aviation hub Teterboro Airport, its first in the New York metro area. In addition, Jet Linx expanded its ancillary-benefits offerings, adding programs including discounted medevac plans through MedjetAssist or Medjet Horizon.

Kansas-based fractional-ownership provider Airshare (the former Executive Airshare) launched early in this century in response to local customers looking for a lower-cost alternative to similarly structured national programs. Airshare found the answer with a Pilatus PC-12 share offering. Unlike most fractional programs, Airshare allocates flight time based on days rather than hours of use: the company assumes 288 flying days per year, so, for example, a one-eighth share entitles an owner to 36 days of access annually. (Flexjet now employs a days-based plan for its Gulfstream 650 ownership program.)

Today, Airshare offers Phenom 100s and 300s exclusively, with about 100 aircraft in its fleet, and also markets the Embark jet card, which, like the fractional program, is based on days of access (10 minimum) rather than hours.

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Rockin’ Roll-ups

Amidst the high-profile consolidation underway at the apex of the charter world, some 2,000 small, independent charter operators in the U.S. ply their trade, but they face a litany of mounting challenges. Among them: rising fuel and insurance costs; increasing competition from larger operations with more buying power; human-resource shortages; and infrastructure-upgrade needs. 

The pressures could make some indies acquisition targets and cause others to simply close down, leaving their customers to look for new sources of lift. To forestall such scenarios, brokerage Fly Louie, which arranges shuttle flights in the Northeast, recently launched the Fly Louie Alliance to unite independent operators and use the organization’s scale and leverage to craft solutions for members. The alliance offers discounted fuel prices for members, and CEO Julia Takeda reports that more than 30 providers operating over 230 aircraft have joined.