The advent of fractional ownership in the late 1980s followed by jet cards in the 2000s did a lot to expand the base of people using business jets and planes.
Fractional operators and the invention of the jet card – a prepaid card for temporary use of a jet – also helped spur business jet deliveries to record levels in 2007 and 2008.
Now comes the third wave of “democratizing” business aviation.
Exactly what this newest wave will look like isn’t clear. Experts think it could be an Uber-like concept or a hybrid found in one of the private aviation membership-based programs such as JetSmarter or Wheels Up or through a jet charter operator like JetSuiteX.
“Clearly there’s enough experimentation going on right now someone’s going to get this right,” said business aviation forecaster Rolland Vincent. “I think this could be the next wave of demand.
“We need to get more people experiencing this industry.”
If this third wave proves successful, it will mean greater business jet utilization and expose more people to air travel through private aviation – minus the cramped seating, long security lines, missed connecting flights and extra baggage fees.
“If people are introduced to business aviation, they’ll probably think better of it,” Vincent said. “I don’t see any downside to getting more people excited and on board business aircraft.”
More importantly, a new wave will mean more business for the likes of Textron Aviation and Bombardier Learjet, not only in terms of jet and turboprop sales but also all the jobs that support their manufacturing as well as maintenance and repair of those aircraft.
Even though it’s being tried in Europe, it’s likely the concept of ride sharing on airplanes won’t take hold anytime soon in the U.S.
One of the first services to try that was Flytenow, which through its website matched pilots with riders who would share the expenses of a flight. The service shut down last December after the U.S. Court of Appeals for the District of Columbia denied Flytenow’s request to overturn a Federal Aviation Administration ban on Flytenow and other online flight-sharing services.
The FAA ban was put into effect because it does not allow private pilots to advertise for shared flights in exchange for flight expenses, and that was how it interpreted the services that Flytenow offered.
‘Secret sauce’
What that currently leaves the industry with is a handful of membership-based private companies or hybrid charter operations, most of which are young but growing enterprises.
Wheels Up is one of them. Since its inception more than three years ago, the New York-based company has taken delivery of 55 Beechcraft King Air 350i twin turboprops and more than a dozen used Cessna Citation Excel/XLS business jets from Textron Aviation.
The company is approaching 4,000 members – memberships start at a one-time initiation fee of $17,500 and annual dues of $8,500 – and is working toward expanding its operations to Europe, Wheels Up founder and CEO Kenny Dichter said this week.
“Five years out, instead of 70 airplanes (in the fleet), there should be 300 to 400 that Wheels Up has, with the majority of those airplanes being the King Air 350i,” Dichter said.
An older but growing private jet company, California-based JetSuite, which was formed in 2009, expanded its business model earlier this year with the launch of JetSuiteX.
JetSuiteX bills itself as a “public charter service” using a fleet of Embraer Phenom 100 and Cessna Citation CJ3 business jets and Embraer 135 regional jets configured for fewer seats – 30 – at a cost equal to airfare on an airline.
For instance, on Wednesday, it announced a new public charter service from Santa Monica, Calif.’s airport to Las Vegas, San Jose and San Diego County, with fares on the new routes starting at $29 one way.
“Our entire mission is to bring private aviation to more people than ever,” JetSuite CEO Alex Wilcox said Wednesday.
While JetSuiteX’s charter service is limited to six cities in California as well as Las Vegas and Bozeman, Mont., Wilcox said, the goal is to expand the affordable charter service to other cities.
Wilcox said the five-year plan for JetSuite – which does offer memberships for more-frequent users of business jets – and JetSuiteX is “to be a billion-dollar company, at least in valuation if not sales, operating in the lower 48 states and have some managed airplanes in each state,” including Kansas.
He said what JetSuiteX is doing is not competing “head-to-head” with traditional airlines. The airports and cities where it provides the public charter service don’t have airline service, he said. And if it were competing with airlines, it probably wouldn’t be getting an equity investment from the likes of JetBlue, which it did earlier this fall.
Wilcox is a founding executive of JetBlue.
Vincent, the aviation analyst, said the key to expanding the base of business aircraft users is making it more affordable for the masses and for the company offering those services.
“From a customer perspective, it’s about lower costs,” he said.
But the entrepreneurs that figure out “the secret sauce” are also going to benefit Wichita’s business aviation companies.
“I have confidence it will create (more) demand and bolster the backlog for some of these OEMs (original equipment manufacturers), especially in the light jets and medium jets,” Vincent said. “This is where the benefit is going to be mostly shown.”
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