How Sentient Jet navigated private aviation's perfect storm

Sentient Jet CEO Andrew Collins on how the inventor of the jet card altered its flight plan as flies towards its second quarter century.

By Doug Gollan, September 14, 2023

From pricing to delivery, Sentient Jet CEO Andrew Collins on how the inventor of the jet card altered its flight plan as it flies towards its second quarter century

Nearly 25 years after inventing the jet card, Sentient Jet has emerged as strong as ever from the industry’s best and worst times. As record demand increased, private aviation, operational, supply chain, and labor issues created havoc for flight providers and customers.

Many major providers, including Sentient, stopped selling jet cards to new customers in 2021, instead seeking to cope with demand from current customers.

What we learned a lot over the years is not every flyer is our flyer. So many people get into the card business thinking it’s almost like on-demand. They think that they can put anybody into that kind of program. It’s not true.

-Andrew Collins, CEO of Sentient Jet, Co-CEO of Flexjet, Inc.

Although all providers had to deal with the same air traffic control delays, staff shortages at FBOs, and other challenges beyond their control, the unit of Directional Aviation’s Flexjet, Inc. has been able to avoid many of the unforced errors and self-goals that have plagued some competitors.

Like others, it made significant changes. It moved non-peak callouts from 10 hours to 48 hours and raised daily minimums. It also implemented a fuel surcharge.

At the same time, Sentient took an innovative approach to peak days. Instead of just adding dozens of extra dates, it set a daily cap that it implements when bookings outrun capacity. The result was more flexibility for members while also preventing major meltdowns.

It also remained consistent with its primary service area that stretches to the Caribbean and Mexico and for travel within Europe and modest peak day and international surcharges.

It also kept its all-inclusive approach, providing full meals, deicing, WiFi on midsize jets and up, and the ability to switch cabin categories per trip.

Not changing was its industry-leading buffet of lifestyle partnerships that provide nearly $200,000 of deals and discounts.

The Boston-based provider also kept investing in reducing friction, launching a text-to-book facility in addition to its app, desktop interface, phone, and even if you want, a fax.

Andrew Collins, CEO, Sentient Jet

Using a broker model, Sentient sources flights mainly from third-party operators, often using guaranteed revenue programs, where it buys out airplanes for days, weeks, or even months at a time.

During the opening of Flexjet Inc.’s new corporate headquarters and operations center outside Cleveland, Sentient CEO, and Flexjet, Inc. Co-CEO Andrew Collins talked about navigating an industry where customers set provider flight schedules and routes with guaranteed pricing just hours before departure.

PJCC: In addition to your role as CEO of Sentient Jet, you’ve taken the responsibility as Co-CEO of Flexjet, Inc., which incorporates Sentient, Flexjet, the brand, FXAir, PrivateFly, Sirio, and MRO Constant Aviation. So maybe we can start there. What are you doing these days?

Andrew Collins: I have oversight of the operation here. (Flexjet Inc. Co-CEO and Flexjet brand CEO) Mike Silvestro and I are partnered. Mike is really focused on a lot of the retail piece; I focus on the operation. I helped think about the next level of operation last year and designed a plan for it, and so on. If you think about this as, at almost a $3 billion P&L, the operation is probably like $2 billion of that. I have a series of folks here that roll into me: the head of operations, the head of pilots and flight operations, the head of service, and so on and so forth. I’m here every other week (Sentient is based outside Boston). I also work with European operations now, so Flexjet EU and Sirio, which is in Italy, and their CEO roll into me. That’s it. Then, I also mind the M&A store as we go. I’m trying to balance the teams and build a global platform now. When you look on that screen (in the operations center), you see Sentient flights; you’re seeing Flexjet flights; you’re seeing Flexjet EU flights. Eventually, you’ll see FXAIR flights, and so on.

PJCC: What’s on top of your agenda that is pertinent to what’s happening in the industry now?

Collins: What strikes me is the thing I’ve said all along. This is such a capital-intensive business, and it’s one that we’re watching an industry transform again. It really is. We’ve seen people push the envelope on certain things in certain ways, and it’s had its impact. We’ll call it that. I’m very proud of the fact that Sentient has adjusted to the new market, and I’m very proud of (Flexjet Chairman) Kenn (Ricci) and everybody else for what’s going on at Flexjet. When I look back in hindsight, and it’s hindsight, so it’s not like this was perfectly mapped out, but I think we made some smart decisions during the pandemic that you could have made a lot of different ones. For instance, even in the building we’re in right now, Kenn pre-purchased all the steel before there was a shortage. That type of thinking. When you get down to it, the acquisitions we did, we did vertical lift, and then we just completed the Flying Colours acquisition. We did not do a massive aircraft management deal. We did not do a lot of things like that.

We stuck to our knitting and focused on the Flexjet owner, the Sentient cardholder, and the FXAIR client, and we ran those divisions accordingly. We built things like (the operations center). We added to the fleet. We have 270 aircraft now at Flexjet. It’s going to be 300 by the end of next year. We’re taking on 40 aircraft a year. Every time you take on an aircraft, certain measurements go with that, including hiring service personnel, how you will get service delivery right, and all that. That’s the stuff you have to focus on. That plus your balance sheet and your profitability and all those good things.

PJCC: Jet card prices are up 30% since the FET-free days of 2020. It’s the number one reason jet card users say they are considering changing programs. What will the market be like in six to 18 months in terms of pricing, rule set, and policies?

Collins: I would say it’s nothing new. Having done jet cards since 2004, I’ve been through multiple cycles. This is nothing different. I’ve seen it a lot. I’ve seen the new launches; I’ve seen the concessions that go with deals and everything else. The one thing that has been the constant the whole time, and I’ve been on both sides of this equation, is you have to be rational. The consumer wants what the consumer wants, but you also have to be rational as to how you deliver to a consumer. You cannot overstep the rationalization of delivering to a consumer. If you do, you screw the whole thing up.

PJCC: When you say that, you mean giving customers too good a deal?

Collins: Yes. At the end of the day, when you write about what consumers want, I’d love to offer some of those things, but we’re dealing with a constricted supply, and we saw what happened there. Then, you have to build a rule set that allows you to run a business, and the point of being in a business is to run something profitable, healthy, and stable and employ people. If you define it by that, and by the way, it is also something that the consumer and the market are willing to bear, so you’ve got to look at it that way. What we learned a lot over the years is not every flyer is our flyer. So many people get into the card business thinking it’s almost like on-demand. They think that they can put anybody into that kind of program. It’s not true. I think that’s what we really learned during the pandemic: a lot of people bought into structured products that may or may not be structured product people.

PJCC: Where was the disconnect?

Collins: I think the disconnect is the people that immediately when the pandemic happened and were, ‘I’m going to buy a private jet.’ They just immediately jumped to what they felt was what they needed. In the end, the reality is eventually, people settle into the right entry point. I’ll give you an example. We had somebody who was a card flyer at Sentient who bought millions of dollars worth of fractional hours at Flexjet because they are a fractional flyer. It bore out as they flew, and we were happy to make that transition. It’s all about what is the right fit for you and the right entry point and then making sure that you’re smart about those entry points as a company. Think about it. Think about the companies that had the real challenges. They oversold the entry points.

PJCC: Are any new products and things like that coming down in the card membership space?

Collins: In ’24, you’ll hear a lot from Sentient.

PJCC: Any hints on what that could be?

Collins: If you start to think about how long the company’s been in business when it was started, and things like that, and then you think about where we’re headed and what you’re sitting in right now, I think you’re going to start to recognize that Flexjet, which is really the premium brand with the billions of dollars associated with it, 1,100 pilots, almost 1,000 maintenance techs, and things like that, nearly 300 aircraft, that’s the huge crown jewel. You’ve then got the other groups that are starting to follow suit now and thinking about outside the 48 contiguous and things like that. Really dialing in now that the market has cleared away a lot of what I would call noise, static, whatever you want to call it, or misinformation, let’s call it in some cases. Now that you’ve got more of a level, clearer playing field, and a clearer direction for the industry as things start to shake out, there’s a lot of opportunity.

PJCC: When I look at Sentient, it sells by category – light, mid, super-mid, and large cabin. Some people want more, for example, a super mid with a stand-up cabin. FXAir and Flexjet each offer a jet card or membership on the Challenger 300 with a stand-up cabin. Do you see Sentient heading in that direction with niche cards?

Collins: I would never say never. When you think about our expertise, in general, Kenn is a master of asset management. Over time, as you think about a fleet that correspondingly keeps expanding, the last thing we really want to do is push a lot of our aircraft into the competitive space. I would tell you that there’s a lot of room for products and programs down the road. Sentient can get more creative. FXAIR can get more creative. They service two similar, albeit different, flying groups. Some overlap exists; there’s a Venn diagram there, but I would tell you that I think that the FXAir team does an incredible job of really that relationship-driven sort of transactional-driven and healthy, robust, larger revenue per leg relationship. I would say Sentient, out of the three groups, has really built that efficient schedule and really knows how to drive efficiency. Efficiency allows us to plug in the right aircraft. That’s how we support the (Part) 135 (charter operator) market, and the 135 market supports Sentient. They’re different in the way they think about it. The supply structure is different for both. Because the supply structure is different for both, you will productize it differently or create different offerings. You will try not to mirror something that you have over here. When someone comes to Sentient and says, okay, I’m buying your super mid-card, but I need you to guarantee me a Challenger every time, I would say no. Then I would either refer them over to have a look at something like FXAir or, depending on what flying they did, I might pick up the phone and call (Flexjet CEO) Mike (Silvestro) or (EVP of Sales) D.J. (Hanlon) and tell them that they’re a Flexjet flyer. That’s how it works today.

PJCC: During the summer, you offered a coast-to-coast $50,000 promotional rate. Before the demand surge in 2021, you had discounts in the low $30,000 range like a host of providers. A few providers are back out with deep discounts. Is this something you are looking at?

Collins: Don’t need to. Again, that’s rational thinking versus you can believe that you can build up a route of efficiency based on a lower price point. If you think you can run your business that way and you have a model that works, good for you. If you need to run your aircraft that way, and you’ve built a backbone and a model to do that, that is your choice. For us, we run a business that we meet the consumer need. We offer them 25 years of history and performance. We say, here’s what Sentient’s all about. Here’s what (safety) certification is all about. Subsequently, here’s what a coast-to-coast price is with us. You can choose to do something else. It just depends on how the consumer is weighing it. We price it the way accordingly. I’ve got to cover the overhead. I’ve got to cover everything that goes into Sentient. We need to make sure that, on top of that, there’s something for us in it.

PJCC: There was a swing towards fractional ownership when jet card providers stopped taking new customers and tightened the rules. NetJets is sold out of delivery slots through the end of next year. Flexjet has limited availability. Is the pendulum starting to swing back to jet cards just because it’s one thing to want to buy a fractional share, but it’s another thing to get a delivery slot in a time frame that you want?

Collins: Fractional is the real growth engine right now in the industry. I see a lot of demand on the Flexjet side right now. For new buyers, we want to ensure people interested in Flexjet have ways to work with Flexjet. We’re not just going to roll out anything we can. There’s a demand here for sure and certain, hence why we’re sitting in (this new operations center).

PJCC: Around this time of year, you sometimes throw out a number on revenue. In 2020, the number was $450 million. How is the top line looking for 2023?

Collins: The combined entities are approaching $3 billion. Sentient’s probably on track to do a little less than last year, but on purpose, by design. There’s been a trade-off, as you’ve seen, relative to how we’ve structured the product that has made it so that not only do we guarantee the service delivery and all the features associated with it, but we’ve made sure that the type of buyer is going to pay for it as well.

PJCC: Wheels Up has reduced its primary service area to the Eastern U.S., Texas, and a few states in the West. FlyExclusive now has a surcharge if you’re flying in and out of Oregon or Washington. Some companies will only accept new card customers based on their flying patterns. What would you say to those flyers that are in all those places where others are leaving or adding barriers? Is it a sustainable business model for a Sentient to continue offering them what you are currently offering?

Collins: There sure is. The reason is because we’ve paid attention. We dollar-cost average the rates. We think about the structure. We think about how to make it work in a scheduling system. We think about the structure of supply, the backbone of supply, and the product we can build on top. We don’t start with the product necessarily and just say, this is the product, hell and be damned. Nor do we do such an extremity that we say, okay, you can only fly here or some cell phone coverage area, where it’s like, here’s the different zones. We don’t do that. I’m not criticizing those models, but I would tell you, as a consumer, the most important thing is to be as frictionless as possible. If the consumer has to think really hard about what they’re doing, I don’t know that that’s solving much. If I think I’m going from point A to point B at a certain price, and then it comes back that I didn’t book it right, this didn’t happen, or they don’t go there, or there’s a surcharge or something like that, that’s the kind of stuff that you have to think through and be smart about. You can’t avoid everything. We’ve tried to simplify it as much as we can. You have a loaded hourly rate that we’re very transparent about, and we fly you at that rate, and we have a rule set, and we educate you on the rule set both in the cycle as well as in your indoctrination, and then you get used to it as you fly and so on and so forth, and we constantly reinforce it and educate.

PJCC: Anything that we haven’t talked about that you think is important or top of mind?

It’s a great team, and I love pushing them to think about, okay, what’s next? Are we doing the right thing in the right context? We don’t follow a lot, so we don’t chase. We don’t get too worked up because we really want to stick to the knitting and the plan and the strategic vision. I would tell you that the challenge that I feel, the stuff that I think really compels me, is trying to work on some of more of the big, hairy issues that are now, I think, going to come into play.

PJCC: Which are?

Collins: When you scale aircraft, thinking about supporting that aircraft, thinking about supporting that customer journey. Think about all the moving parts to supporting a customer journey. Do you think catering works well in this industry?

PJCC: The more I learn about this industry, the more I’m amazed that anything ever goes smoothly because it’s crazy. Twenty-four hours in advance, or 10 hours, or 48 hours, providers get a plane in South Dakota to go to Tulsa, and then the catering, and then the car services, and all that goes with it – available crew. Then, accommodations for the pilots in a destination they didn’t know they were going to be in the night before.

Collins: Welcome to the world of scale. I mean, scale is the critical thing in this business. Here’s the reason why, and it’s easy to explain. All the stuff you just named requires something when it’s done the way it’s done. That’s called the hero of the day. Joe or Jill was able to get the catering there at the last minute as Joe or Jill worked an extra four hours, drove there, and did XYZ. You can’t scale Joe or Jill. You’ve got to figure out how to solve the bigger challenges as you get through. That’s why you’ve got to be vertically integrated. You can’t just rely on a hero of the day or social tribes and social law. You have to scale. You have to have technology. You have to build a business. You have to have the right business model. All of those things. Those are the brakes. When you think about the discussion around what you charge a customer or the rulesets you have, you have to think about what you can solve for and the limitations. If you can’t get that right, and you can’t get the quid pro quo right, you’re not going to find if your business works. Service and everything.

PJCC: Do you feel like the price level right now, where we’re seeing it, is it sustainable?

Collins: It’s not so much about what’s being charged right now. It’s about, again, how you think about your time horizons and your scale and your program and product. Everything is contingent upon the supply backbone and the various variable forces like fuel and things like that. Flying private is not cheap, and for years, people have tried to make it up in volume. They try to do it in certain ways, and they have all sorts of models that they pursue. People have been brave and done a lot of different things. What I have learned over the many years of coming in and out of jet cards is the following. You need to make money. The consumer needs you to make money. Because if not, you will not be able to deliver the consumer product. At the end of the day, you have to think about the context of the market and be in tune. It does not mean you necessarily have to rush to change your pricing or anything like that. You should know the basic context of the market. When I say the market, I think about it rationally and not irrationally. There are always going to be people who try to chase from the bottom and undercut. There will always be people trying to throw a special because they have excess capacity or something else. There is always something driving something. Or there are people that just are, for lack of a better way of saying it, naive. They build a product because they think, wow, oh my gosh, this guy just bought our product. We’ve seen it. We’ve flown thousands and thousands and thousands of legs and millions of passengers and all that. At the end of the day, we know what it costs, how to put it into the system, and how to guarantee your (safety) certification across four different points. How to think about non-owned insurance, how to think about the SG&A that goes into a command center, how to think about all the things that you want when you are flying with somebody. Why do you want to just chase a discount and go with somebody that you have never heard of or may or may not have the track record? It just doesn’t make sense to me. I believe that you will sustain a price level equivalent to what you want to put into your product. What you put into your product ultimately is what the consumer should be looking at, not just the price. That’s where a lot of this comes into play.

PJCC: Is your message that some of the pricing that you see out in the market just isn’t sustainable for the long term?

Collins: I don’t know that that’s the case, but I would say that it’s always going to be about supply and demand, and I’ve been through enough cycles to see it. The question is, how do people want to think about what the rational price point is, what you put into your product, and what it costs you? Some people are going to try to compete at a price level because they force themselves to. They think that I’ve got to go down there, and I got to chase it. We’re not interested in chasing the bottom. I don’t have to make it up in volume. That’s what I’m saying to you. It feels like a different era, but the attributes are still the same. People still do the same irrational behavior. New entrants come and go. If I sat down and went through all my files from years ago and tried to extract everything from my brain, I could tell you hundreds of names of people who have come and gone in the card market. Because they come in and they rush, and they push, and then they leave because they didn’t figure it out, or they figure out that they don’t want to be in it, or it’s not for the faint of heart. Making the bridge over to an optimized schedule and the right service delivery and having the right safety infrastructure and all that stuff. That takes a lot of money and a lot of time, and it takes the legacy of a company like ours. I would say the same thing across any of the brands here. The group that wins is the group that knows how to do service delivery the fastest or rebounded the fastest with service delivery. That was us. We did it across all the brands, which means there are still people who are having hardcore service issues. If you didn’t invest in your service infrastructure and didn’t pay attention to your measurements and new measurements and things like that, you weren’t paying attention to what was happening.

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