After years of claims about Uber for private jets instant booking technology, it’s finally arriving. But should you use it?
Many of the broker websites and apps promising online bookings were nothing more than electronic request forms.
But that’s changing, and increasingly, you may find yourself able to rent a private jet or turboprop digitally from a broker or platform, and without much human oversight, or at least human oversight looking after your interests.
Are you chartering an aircraft under the typical Part 135 rules? Do you even know what Part 135 is? Are you dry leasing the plane, in which case you might be assuming millions of dollars liability? How do you even know if it is a legal charter? Or put another way, what are the red flags your flight may not meet federal regulations?
And of course, the biggest question: Do you really understand what goes into chartering a jet legally well enough to do it yourself, without any or limited professional assistance?
A good place to start this analysis might be a look at the evolution of travel agents over the past 25 years.
Back in the late 1990s, Bill Gates, one of the smartest guys around, pronounced you could throw away your travel agent’s phone number. Expedia, his online travel agency, would end the need to wait for your agent to open the shop at 9 am.
“We fundamentally believe – and our customers seem to agree – that until technological capabilities have further developed, complex travel scheduling is better handled by people rather than machines.”Mark Briffa, CEO, Air Partner
Gone would be the mystery of what your agent was seeing that you couldn’t as the sound of clicking keys resonated as you waited impatiently to find out if there were any seats left on the first flight to Philly Tuesday morning.
And oh, by the way, are there any aisle seats in the front of the cabin? More clicking. And of course, what’s the price? More dead air, and the sound of distant keystrokes.
With online booking, you would be in control. Who doesn’t like to be in control? No more intermediaries, at least human intermediaries. Book your flight with a couple of clicks. Hotel next. Car rental if you need it. Done.
Fast forward 20 years and if it’s possible, Gates was both right and wrong.
Where Gates was correct was that online bookings would grow exponentially, into the hundreds of billions of dollars per year. And if Steve Jobs hadn’t invented the Smartphone, he may have also been right in his estimation that the traditional travel agency business was doomed.
Today, in fact, travel agents, who have repositioned themselves as travel advisors, are prospering in a way nobody could imagine. They’ve been cut loose from their desks and computer terminals.
They spend much of their time personally inspecting the hotels and cruise ships they sell, gaining intimate first-hand knowledge of which suites and cabins have the best views, or which get vibrations from the engines and face the employee parking lot and should be avoided.
Have you ever seen a hotel website that tells you which rooms you shouldn’t book?
Travel advisors also have deep personal relationships with their suppliers, airlines, resorts, ship lines and sightseeing companies. They leverage those relationships, built through the volume of business they deliver and get their clients perks and upgrades you don’t get if you booking through an OTA, an online travel agency.
Most of all, they fix use those relationships to fix things when there’s a problem, oftentimes before a problem impacts you.
There’s a Lufthansa strike in Frankfurt. They know they can rebook you on its sister airline Swiss through Zurich. You leave 45 minutes later, but will be arriving 10 minutes earlier. That routing was $2,000 more expensive earlier, but they switched you at no cost.
The folks who use OTAs generally find themselves unaware until they get to the airport, and then frantically have to alternate tweeting to a help desk, hoping for a reply while waiting on hold. “Due to the Lufthansa strike, our call volume is higher than usual. We apologize for the delay. Estimated waiting time. 72 minutes.”
So what does this have to do with booking a private jet online?
Well, for one thing, it’s always worthwhile looking at history and potential parallels. And there are two truths from the evolution of travel distribution.
First is that agencies that focus on the high-end traveler, both leisure and corporate, are doing particularly well.
Virtuoso, a network of independently owned travel agencies saw its revenues explode from $5 billion to $25 billion in the past decade. Other groups have seen similar increases.
In other words, for a lot of people with money, time is something they don’t have a lot to spare. The Internet is a confusing place with lots of claims that are hard to verify.
A man who is his own lawyer has a fool for a client, goes the saying about representing yourself in court.
Why not let somebody who has been to Bali and seen all the top hotels, and knows the general managers, recommend which one to stay in? That person also would know, based on your preferences, if you should take a pool villa on the cliff or a one-bedroom suite at the beach.
Secondly is that while the OTAs continue to grow, the theory is, booking online is fine for simple trips. I wouldn’t book a safari, but you know, that flight to St. Louis on Wednesday, and back home Thursday would be fine.
Having done several stories about the travails of booking through the online travel agencies, I found many of the many complaints were in fact about those simple trips.
In case you are interested, for the most part, OTAs have lower ratings than Ryanair. Although with Ryanair, what can you expect for nine dollars?
With all of the above in mind, I asked several private jet charter brokers, the human ones, their thoughts about man and machine.
Kevin Diemar is the founder and CEO of Unity Jets, a Miami-based broker. He spent seven years at Marquis Jet Partners leaving after its acquisition by NetJets in 2010, setting up his own shop.
He says, “While booking on an app or website sounds appealing, remember you are not renting a car. You are flying your most valuable assets in the world whether it be your family or your company’s CEO at 40,000 feet and putting them in the care of somebody else.”
He continues, “With a skilled and honest broker, you will be advised of the best options, and be given the reasons why one option is better than another.”
He says, “Many times there is much greater value in spending a little more to get a lot more in terms of (private jet) size, age, and quality.”
“If you have $20 million or more in assets, do you invest it all yourself online or do you work with professionals? When you are sick, do you self diagnose with Google, or go see the correct specialist? No difference when chartering an aircraft, you should work with an expert,” Diemar says.
Like travel advisors and hotels or cruise lines, he points to the relationships brokers have with operators on whose jets you will fly.
This comes in handy when your plans change. He says, “An app gives you terms. No relationship is built between you and your app, so if a situation arises and you need to change or cancel a flight they simply hit you per the terms. A good broker will work on your behalf to minimize or eliminate cancellation fees.”
He then lists off a slew of things that can impact your trip, from Temporary Flight Restrictions (TFRs) that impact airport access, weather which might change your flight routing, impacting cost, potential extra charges for WiFi that could be billed after your flight, backup plans in case the operator can’t execute your flight, how service recovery works.
Hint: You don’t just go to the counter and get rebooked. Then there are things like parental consent forms if only one parent is traveling with a child and other fees and policies you might not be aware of or understand.
He says, “Bottom line, this is a very human business and you need a team of aviation experts in your corner. You may get lucky and have a good experience on an app, but over time I believe it will cost you more and create greater stress for a service where clients are spending a lot of money on.”
Another broker I talked to is Peter Maestrales who founded and operates Boca Raton-based Airstream Jets. While his mileage-based Distance Card jet card is about half of his revenues, on-demand charter is the rest.
He’s a second-generation business aviation professional, and his family business was as a charter operator, so now as a broker, he has seen the industry from both perspectives.
He says, “The true mission of an air charter broker is to provide their clients with the best of both worlds at a better value.
“Brokers draw from both local operators and floating fleets. A broker is not limited to just a few aircraft within a fleet, they can source from the entire charter market.
“They can usually provide aircraft from branded fleets at a lower cost than (employees) of that company because the broker will only utilize the branded aircraft when it makes economic sense to do so.”
It’s something that might not be apparent when just browsing through a multitude of aircraft via an online booking site.
Another twist is, “Even for round trips with a short duration a broker will look to source from aircraft that are in that origin area on other trips. These are known as transients. The advantage of transients is that the original customer has already accounted for the aircraft minimums as well as the crew pay and per diem. Since those expenses have already been covered, the broker’s client enjoys a healthy discount.”
He says, “Brokers also know the market inside and out. They can look at a mission profile and narrow down the aircraft selection based on the variables along with the performance and capacity of the aircraft. From there they should narrow the selection further by operator history and the relationships they have built with those companies over time.”
Like with travel advisors, Maestrales points to the personal aspect of the broker-client interaction.
He says, “Becoming intimate with a customer’s personal preferences and earning someone’s trust is not a speedy process…Therefore, any consumer who has specific tastes, which most do, and wants to fly at a reasonable price without restrictions, will ultimately end up working with a broker who they trust sooner or later.”
He also highlights the biggest problem. “The downside of the (human) broker option is the fact there is a handful of shady individuals out there who have no idea what they are doing or are acting in their own self-interests as opposed to serving their clients’ interests.”
I find one of the biggest reasons consumers move to jet cards is poor experiences with charter brokers.
Maestrales also reels off a long list of details his company monitors for each flight. “We ensure compliance and accuracy of all points of service and aircraft operations including crew qualifications and experience, FAA certifications, safety ratings, operational history, aircraft maintenance records, and insurance coverage.”
I spend a morning in Diemar’s office awhile back. There were multiple calls for a soon to be departing flight. Confirmation with the FBO catering had been received, but then another call to the operator to remind the pilots to pick it up. Then another call back to the FBO to make sure they indeed bring the catering onto the plane.
There’s also what you are going to end up getting billed? What are the extras? Is your quote firm, or is it subject to actual flight time?
Having flown twice from Miami to New Orleans last year, I was perplexed why one flight headed due north to Tallahassee and then west across the Florida panhandle.
The other took a shorter and more direct route flying northwest across the Gulf of Mexico that was 24 minutes faster.
Since I was flying empty legs on a fixed price, it didn’t hit my wallet but I was still curious.
If I was paying actual flight time, the difference could have cost me several thousand dollars.
Just so you don’t think I’m a closet Luddite, I do see a place for instant booking.
Certainly, with jet card programs, you do (or should do) your due diligence before you join, so you know what to expect, and the provider knows who you are.
In these cases, instant booking becomes just another tool like texting, a phone call, or fax.
That said, I have no doubt that online booking of on-demand charters, like with OTAs, will become a significant part of the market.
Three of the industry’s largest players are investing heavily in online charter bookings technology.
Kenn Ricci’s Directional Aviation bought tech-focused charter broker PrivateFly in 2018.
In the case of PrivateFly, it also offers personal support of human brokers and even will assign you a personal broker.
I know them quite well, have been to their offices, and have seen what they do on the backend and in terms of the training brokers go through. It might help that its founder is a former RAF pilot, who also flew for UHNW private clients and NetJets.
Likewise, Thomas Flohr’s Vista Global Holdings acquired both XOJET, which in addition to a fleet of 43 super-midsize jets had built a $100 million brokerage business. He then snapped up JetSmarter, which despite its troubles, had developed what many believe is cutting edge technology. He then merged it into XOJET to form a new brand, XO.
In addition to bringing XOJET’s scrutiny of the third-party operators it uses, he also instituted three levels of quality tiers, designed to help the consumer understand the differences in price between what might seem similar aircraft.
Kenny Dichter, the founder of Wheels Up, said since launching its digital marketplace last year, over several months members booked over $5 million online where there wasn’t human interaction from client services.
Wheels Up also doesn’t just sell flights on any aircraft, but limits third party charters to operators it has vetted.
His deal last month with Delta Air Lines to merge Delta Private Jets with Wheels Up opens up some exciting possibilities to leverage the airline’s digital platform and reach to tens of millions of consumers.
Interestingly, Ricci, who is considered one of the sharpest players in the business, launched Tuvoli in October, a B2B platform designed to streamline payments and other interactions between traditional brokers and operators.
A month earlier Dichter snapped up Avianis, also a trade platform, making it clear he wanted it to continue serving third-party retail brokers and operators.
One large broker that isn’t looking to lead in the area of tech is U.K.-based Air Partner.
In its 2017 annual report, its CEO Mark Briffa wrote, “We fundamentally believe – and our customers seem to agree – that until technological capabilities have further developed, complex travel scheduling is better handled by people rather than machines.”
I asked its senior vice president of sales for the U.S. Vincent Kavanagh for his thoughts.
He tells me, “Without trying to defend the human versus today’s technology; and being very conscious that there is, of course, a generation that expects interaction all by the touch of a button…experienced brokers know better questions to ask regarding personal preferences, dietary requirements, and surprises.
“They know how to speak with the crew directly to arrange specific details, write notes on (the customer’s) behalf and arrange the cabin. They also can first hand 24/7 deal with change in final destination and FBO on account of weather or simply because the client has messaged a change of mind.”
Kavanagh adds, “Although technology improves and gets better and better; it simply cannot surpass the human touch.”
So, should you book your next private charter flight online?
Maybe you know the private aviation industry well? Perhaps you are a pilot or owned a plane?
You know your way around the tarmac. Some of the online interfaces are quite cool, enabling you to play around with preferences.
I would expect you would know some of the operators and know to know where the devil is hiding in the details.
You also have the time to do the research and make sure first of all you are dealing with a reputable company, and understand what resources they have to backup all the nifty digital features.
Do they actually have anyone with business aviation experience vetting the operators they are using? Are they tuned in to industry knowledge?
The third-party rating systems trail real life. For example, are they tuned into high-levels of turnover, losing aircraft management contracts, and other signs that a once solid operator might not be ideal anymore. There are nearly 2,000 Part 135 charter operators in the U.S.
Booking online is a personal decision. Right now, online transactions are low volume. There also isn’t an endless pool of dozens of millions of potential customers likes the OTAs have to cycle through.
Most traditional brokers, like travel advisors, get most of their customers through referrals. In other words, online charter brokers will find it hard to find new customers if they can’t deliver a level of service that the UHNW and the corporate market will likely seek.