For jet card and private jet charter buyers, the forecast is sun, clouds, rain, or snow

During the annual private jet Schedulers & Dispatchers Conference held this week in Nashville, the forecast was varied. Here’s what it could mean to you.

By Doug Gollan, January 27, 2023

During the annual private jet Schedulers & Dispatchers Conference held this week in Nashville, the forecast was varied. Here’s what it could mean to you

There are two questions I get most often from buyers of private jet flights, either through on-demand private jet charter, jet cards, or fractional ownership. When will the prices go back down? And when will the reliability go back up?

During the NBAA’s annual Schedulers & Dispatchers Conference held this week in Nashville, Tennessee, the answers ranged the gamut.

The meeting draws corporate flight departments and charter and jet card brokers who are buying flights from charter operators, who, in some cases, also have their own membership programs.

If you are asking why a company with jets needs more flight time, it’s called supplemental lift.

That’s when you need charter flights incremental to the availability or suitability of your own aircraft. That can mean flights for board members to attend board meetings, special trips, or when your airplane is in the shop for maintenance.

More on the latter point soon.

For brokers, the show offers an opportunity to build relationships with salespeople, schedulers, and dispatchers from operators.

As I recently wrote, I believe the good folks selling card and fractional programs sometimes overstate in a positive way the current situation for their companies.

Several brokers tell me they still have significant issues with anywhere from 10-to-20% of their flights.

Sometimes the client is impacted. Sometimes they are able to solve the problem. However, they say that compares to low single digits before Covid.

Like many industries, business aviation is also seeing many new faces. In one session, 20% of the schedulers said they had less than a year’s experience in that role.

It’s not an easy job. There are lots of moving parts. Again, more on that in the future, but lots of respect.

Over a quarter also said they are a one-person department, with pilots and management as their backups. That reflects the industry’s long tail. Only around 10% of charter operators that have jets on their certificate have 10 or more, according to Tuvoli.

For buyers, being able to put a face with a name is helpful when things go south, which in the complicated and weather-impacted world of aviation, they sometimes do.

The most popular exchange was cellphone numbers.

Back to how things are going.

The consensus about reliability is it is not getting worse, but it’s not clear it is getting better.

One reason things aren’t getting worse is there is no longer a question that charter demand is seeing a significant dive, as we have reported.

2023 Outlook

While the mood was jovial, the conversations, once they got down to business, were quite interesting:

  • Brokers admonished operators about reliability, mechanicals, and playing musical chairs with airplanes, something that’s not new but is more of an issue because of all of the other issues impacting reliability.
  • Operators have been adding airplanes, hiring pilots, and paying pilots while waiting for them to get type-rated – more on that shortly as well. They and the owners of those airplanes in the managed fleets who are footing the bills are eager to have their airplanes booked. The tide is turning and tipping toward a buyer’s market.
  • More operators are looking at launching fixed-rate jet cards. I talked to several who plan to roll out formal membership programs. They’ve seen the value having a branded retail product (i.e., Jet Edge, Delta Private Jets, XOJet) can have for the value of a company.
  • Several brokers who don’t have fixed-rate products are looking at launching them now that availability is easing, and they are gaining price-negotiating leverage.
  • With all new products, expect nuanced offerings lined up to where the provider has buying power or fleet access. Think only offering certain categories of jets or targeting customers regionally, even if they fly nationally.
  • At the same time, a couple of brokers that halted their guaranteed-availability-fixed-rate cards say they still don’t have the confidence to restart them.
  • A couple of operators that are still on the sidelines in terms of restarting their fixed-rate, guaranteed availability jet cards are inching closer.
  • Yet, there is plenty of storm clouds in the area. Serious supply chain issues keep airplanes on the ground longer for maintenance, sometimes waiting months for parts.
  • Operations are still challenging, right down to catering. In many spots, pre-Covid caterers no longer are around or serve the private aviation market. On the flip side, more restaurants offer takeout and delivery. However, they aren’t experienced in catering to the private jet market.
  • Several people say the amount of hours NetJets, Flexjet, and Wheels Up are buying off-fleet is down. They each have large fleets, so if true, that backs up WingX and Argus TraqPak data about the decrease in Part 135 (charter and jet card) flight hours. Profit margins are higher on-fleet, so possibly a good sign for Wheels Up.
  • Vista Global had a large tradeshow floor presence showcasing its operators. While last year brokers were complaining the Vista fleet was often not available, being used by VistaJet and XO program customers; clearly, Vista wants to make sure the wholesale market doesn’t forget about them.
  • Brokers, who last year were scrambling to find new operators due to consolidation and lack of availability with traditional partners, are now refocusing on culling the number of operators they work with. Volume gives them the most clout in an industry where big customers get treated better.
  • At a macro level, some folks think demand won’t fall that much from here. Others remember the crash of 2008.
  • Several big guaranteed availability players say they are waiting to see how things go over President’s Day and the March Spring Break period before making any more changes to their programs. Think culling down peak days and blackouts rather than callouts. There is still a lot of pressure in those last 72 to 96 hours to find replacement aircraft. It’s also where programs that offer no-cost recovery can rack up big losses.
  • For those of you looking to save a buck, flexibility on travel dates and aircraft types should yield deals again.
  • Still, increased costs mean discounting prices are going to be more difficult.

The mixed forecast of sun, clouds, rain, and snow means, for the time being, pack appropriately. Shorts, a sweater, your raincoat, and a scarf should have you covered.

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