Three charter brokers will tell attendees at Corporate Jet Investor Americas 2020 this week they are not concerned by the increase in operators launching jet memberships
The bosses at Air Partner, B2 Aviation, and Magellan Jets will tell attendees at the Corporate Jet Investor Americas 2020 conference that brokers do it better during the virtual event starting tomorrow.
In the prerecorded session, the brokers said operators would be smarter to focus on flying instead of marketing directly to consumers. That includes launching their own jet cards.
“We see that with a lot of traditional wholesale operators that want to go more retail,” said David McCown, the U.S. president of U.K-based Air Partner.
He noted, “If they are successful, it might tighten up supply. We do see (some) will reserve their supply for their retail members. But, I believe we bring enough value and clients to the operators we do business with.”
McCown is nonplussed. “A big name operator comes out, and they try to launch a jet card, but it’s not what they do. It’s nice to have it. Maybe, it’s a shingle they can hang on the wall. They launch these things, and they don’t get the traction, and they get put on the back burner.”
Anthony Tivnan, the president of Boston-based Magellan Jets added, “It’s no secret. We’re seeing a significant influx. In the early 2000s, we saw something very similar where there was this push-pull, love-hate relationship between a lot of operators and brokers.”
He says for both brokers and operators, being focused is the key. “One of the big reasons we never got involved in ridesharing is it’s difficult to chase every shiny new toy. You get off track of your core business.”
Still, he expects more operators that want to go direct to consumers. “There are definitely some companies out there that are capitalized well enough to execute on that. If that’s part of their plan and they have the capital to do it, that’s exactly what they should do.’
However, he warns it may not be the right approach for everyone. “For smaller operators, it’s a very difficult feat unless you’re very well-capitalized to put in place the systems, the processes, the teams…To have what it takes to deal directly with consumers, to get in front of the right consumers, it’s very expensive and time-consuming, and that’s where we focus.”
He added, “The majority operators we work best with and work most with are content operating aircraft, and that’s what they’re great at.”
He noted, “Some have tried and been successful, but being a jack of all trades is expensive.”
Tivnan pointed to JetSuite. It went national with a fleet of about 15 light and very light jets. He noted, “It’s extremely expensive to operate aircraft, flight crews, maintenance, and everything, and I know it’s extremely expensive to build out sales and marketing teams (for a broker).”
Bernie Burns, of B2 Aviation, a boutique broker, noted that he works with a number of operators only using specific private jets that meet his clients’ needs. “If they call me from the airplane, and ask me about where’s the candy draw, I know.”
All three brokers said accessing a variety of operators to meet the needs of the individual consumers will continue to give the middlemen a strong role in private jet charters and jet cards.