Count Nicholas Air out. The Oxford, Mississippi-based flight provider seems to have avoided industry reliability problems as well or possibly better than any of its competitors.
Over the past year, the percentage of subscribers to Private Jet Card Comparisons who say they had seen cancelations, delays, or service issues increased to 44% from 21% as the industry has struggled against a new normal.
The 12th-largest U.S. private jet operator based on charter/fractional flight hours has no plans to change a winning formula.
Its 95.5% renewal rate with subscribers who responded to our most recent survey was the highest of any jet card seller, with enough qualifying responses in 2022 and 2021. In fact, its renewal percentage increased by 2.9 points year-to-year.
Speaking during Corporate Jet Investor in Miami earlier this week, its President Peder Von Harten makes clear its performance is not accidental.
“A lot of companies kept selling (jet cards) but couldn’t meet demand. We would hear, ‘My plane wasn’t just delayed. It didn’t show up at all,” he says.
He continues, “We have contracts that don’t allow us to say, ‘You can’t fly today.’ We got into the business for a reason. We have to live up to the contract the customer signed.”
That means continuously adding to its fleet as it adds customers. However, it also means measured growth, adding jets one by one with several additions each year.
It also entails selling older jets to maintain an average fleet age of under five years.
“We made a commitment to our customers to have new aircraft, which means getting rid of older aircraft,” he says.
Von Harten declines to detail its next additions or types. He says he won’t talk about new aircraft “until they are on the ramp ready to fly customers.”
The current fleet includes Embraer’s Phenom 100s and Phenom 300s, Textron’s Citation CJ3s and Citation Latitudes, Bombardier Challenger 300/350s, and Pilatus PC-12s. However, the turboprops are not currently in their fixed-rate, guaranteed availability jet card programs.
Beyond having enough airplanes and pilots, the business has gotten more complicated as shortages of parts and mechanics have delayed slots for various mandatory inspections.
Von Harten says, “Responsible operators have to be aware of more than just the revenue on the airplanes. You also have to forecast your maintenance planning, as things like engines and other overhauls are not readily available. How long is that airplane going to be down?”
For Nicholas Air, that means bringing as many functions in-house as possible.
“You can’t be beholden to somebody else’s business. For us, (vertical integration) allows us to do it the Nicholas Air way.
While others have recently added runner aircraft to bring parts and mechanics to repair airplanes with mechanicals away from the base, it’s something Nicholas Air has been doing for several years.
Von Harten says the alternative is pulling an airplane from one customer to serve another, a string of dominos where in the end, there is usually a poor outcome.
There are also no plans for an IPO or private equity to fuel growth. He says fleet additions are financed through traditional bank loans and profits.
He notes Nicholas Air isn’t immune to delays. However, he adds, “If you are competing against airline delays, you can’t constantly have delays yourself”
Running a smooth operation is probably a good thing for management as well. When members join, they get the mobile phone numbers of Von Harten and CEO/Founder Nicholas Correnti.