While private jet providers say reliability is improving, they are facing a variety of issues that are impacting on-time operations and costs.
Speaking on three different panels during Corporate Jet Investor, several private jet charter operator and broker executives say they are seeing no let-up in demand – or cost inflation.
At the same time, they are still facing supply chain and human resources challenges, plus rising costs.
It also comes as recent research from Private Jet Card Comparisons subscribers found that the percentage of flyers who have faced delays, cancelations, and service issues more than doubled year-over-year, from 44-to-21 percent.
As a result, 51% are considering changing providers.
“If we had twice as many airplanes, we would fly twice as many hours,” FlyExclusive Chairman and CEO Jim Segrave told attendees during a panel titled, “Can the charter boom last?”
VistaJet U.S. and Asia President Leona Qi says Q3 was the “best in history” for Vista Global’s flagship brand, with 70% of sales coming from new members.
Andrew VanderPloeg, Senior Vice President of Sales for Elevate Aviation and Private Jet Services Group, says demand is being sustained by business travelers who cannot depend on the airlines.
“(Business clients) are making private aviation a fixed-cost of doing business,” he says.
Still, Wheels Up reported block sales decreased from $172 million to $151 million in its third-quarter earnings results.
All the panelists on the charter panel say there is “room to grow.”
However, Aadesh Batra, an executive with India and UAE-based operator and broker Titan Aviation, predicts it won’t be that easy.
“It’s going to be difficult unless capacity is sorted out,” he says.
While in the past, clients usually could take the better part of a day to mull over quotes, within an hour, “availability changes.”
Qi says that clients told the VistaJet availability trumps consistency, at least for the near term.
For example, while it is in the process of rebranding Jet Edge and Air Hamburg fleets to VistaJet standards, clients understand they may not get “an airplane with the red stripe.”
She says flyers have also become less focused on aircraft age and instead focus on cabin interior.
Qi says its floating fleet model is meant to maximize utilization, so constant refurbishments and upgrades are part of its business.
“They want aircraft to be new interiors, not necessarily year of make,” she says.
At the same time, when asked about what keeps them up at night, the executives on the charter panel say getting aircraft with mechanicals fixed and flying quickly and finding training slots for pilots are their biggest headaches.
Segrave notes FlyExclusive has been expanding its in-house maintenance, hiring hundreds of technicians.
He calls “maintenance reliability” the “biggest challenge to delivering for our business.”
This year, FlyExclusive ordered $600 million in new jets from Textron Aviation to launch its fractional ownership program.
Matt Liotta, Co-Founder and CEO of start-up Volato, which has seen its fleet of mainly HondaJets increase from two to 23, told delegates age does matter.
He says, “If you have older jets, you are going to find it harder to compete.”
Over the summer, Volato announced an expansion into super midsize aircraft with an order for new Gulfstream G280s.
VanderPloeg says despite having two charter operators under the Elevate umbrella, he doesn’t believe an on-fleet model is necessary.
“You don’t have to sacrifice service or quality when you go off-fleet,” he told attendees.
Still, Batra summed up the challenge, on-fleet or off-fleet, new aircraft or old, noting, “It’s about the supply chain. It’s been really, really difficult.”
In case you are wondering how this all will impact what you pay, speaking on a separate panel, GrandView Aviation President Jessica Naor noted, “We’re experiencing cost increases across the board, in many areas it’s double digits. The cost of labor is increasing at such a dramatic rate. The supply chain is causing cost increases too. Unfortunately, it is what it is.”
In other words, don’t expect to see any break in prices anytime soon.
If you want some consolation, you’re not alone.
Aircraft owners are feeling it, too.
Andy Priester, Chairman of Priester Aviation, says, “There is certainly a level of frustration in the escalation of prices, especially with crewing costs.”
He continues, “I think owners understand why prices are going up. But, it’s shocking how quickly and the magnitude of the price increases.”
What’s the alternative?
John King, President of Solairus Aviation, added, “Nobody likes fuel to jump $1.50 a gallon, but they’re not going back to Southwest Airlines.”
Still, a poll of attendees found 90% saying charter customers are price sensitive. Yet 70% of respondents believe this is the new normal for private jet charter costs.