Private Jet Industry White Paper
by RaynAir Private Jets
If you are a private flier… please read on. We provide a simple explanation and a user friendly chart to help you decide how to best utilize your options in the jet market.
First, private fliers travel in very different ways, in very different patterns, for very different reasons. That’s why the life of the private traveler is great – options, options, options. Some fliers travel regularly for same-day business trips. Some fliers fly large parties to exotic destinations. Other fliers travel for extended time periods, while others travel for just a few days. To keep things simple, let’s group private fliers into three categories: Business – The business flier gets in and out quickly (same-day or one-nighter). Weekender – The weekender only spends a few days at the destination. Vacationer – The vacationer spends time at the destination (1-2 weeks, or longer). *Note that private fliers may identify with multiple categories above. Second, there are five broad categories of private jet services available to private fliers. Owner – owns the jet and flies whenever they like. Fractional Owner – has hours or points which can be applied towards flights. Jet Card – has a dollar amount “on account,” which is applied toward flights (Debit or Hourly based). Charter Company – private flier books flights on an ad-hoc basis directly with a local charter company. (This option is often limited to a select fleet of planes, at a particular location.) Jet Charter Broker – private flier contacts a jet charter broker to act on the client’s behalf to find the best value in the charter market to best suit the client’s needs for each flight they take. Third, let’s identify two primary concerns of the private flier: Service and Cost. Service is an intangible, overall feeling of a satisfactory level of customer service, safety, comfort and convenience. Cost is the bottom line dollars to be paid for the service received. To best describe service and cost in the following charts, we will utilize three measures: High, Medium & Low. Now that we have categorized the types of travelers, the types of private jet services and the levels of service and cost, let’s examine the Value Chart below:
Value Chart
Fractional Owner Service Cost Medium High Medium High Medium Low Jet Card Service Cost High High High High High Low Charter Company Service Cost Low Low Low Medium Low High Jet Charter Broker Service Cost High Low High Medium High High
Business Weekender Vacationer
*The Value Chart factors in additional considerations, such as lost interest on funds (fractional ownership and jet card programs require funds up-front) and significant maintenance costs; thus, only Vacationer travelers flying on jets realize the value of a fractional ownership program or jet card. The Value Chart is a powerful demonstration of significant value opportunity. Private fliers can fly in the lowest cost model even if they already own a jet fraction or jet card AND private fliers primarily utilizing jet charter brokerage services may want to consider utilizing a jet card if they desire to fly jets for vacation travel beyond approximately 600 miles. (Utilizing a jet broker for a chartered turbo prop aircraft may still present a better value when travel in under approx. 600 miles.) 1|Page
Private Jet Industry White Paper
by RaynAir Private Jets
Consider a recent case: We recently accommodated an hourly jet card holder. The client proposed a trip from Teterboro, NJ to Peoria, IL on a light jet. Using his jet card, he indicated his trip (with 2 over-nights) would cost approximately $27,000 (roughly 4.5 hours of flight time). We, as a jet charter broker, were able to find an equivalent aircraft and quote the customer a total price of $20,500 including all taxes and fees. However, if this scenario was applied for a vacationer who wanted to stay in the location for one week, the hourly jet card holder would still pay $27,000. On the other hand, the jet charter broker would charge approximately $35,000, as the traveler would have had to pay for two round trips to cover aircraft repositioning costs. In our experience in this industry, we have found the smartest fliers utilize a jet card for more expensive trips and fully utilize jet charter brokers when they bring better value. More and more private fliers – especially those with fractional ownerships or jet cards are aligning themselves with jet charter brokers in some form or fashion. These fliers fully utilize the appropriate programs at the appropriate times to take advantage of each type of program’s strengths. Quick Summary for Best Value If you are strictly a Business flier and never fly for vacations or long durations – use a jet charter broker. If you are strictly a Vacation flier (unwilling to consider a turbo prop) and never fly for short durations – consider a jet card. If you are a Business, Weekender and Vacationer (further than approximately 600 miles) – consider a jet card and develop a relationship with a broker you trust – price out every trip – go with the least expensive option. If you are interested in flying on turbo props (KingAir 90, 200, 350, Avanti Piaggio, etc.) – we may be able to fly regional vacationers at a fraction of the cost of jet travel, thus reducing the need for a jet card. Calling a local charter company directly to arrange a flight may result in flying on an inappropriate aircraft and/or paying significantly more for a flight. Sometimes calling a charter company directly can be the best value, but utilizing a jet broker will ensure you always get the best value in the charter market. We have access to an industry charter board, are alert for available one-ways/empty-legs, watch for transient aircraft availability and shop a variety of charter operators in your area. We work hard to shop the market and bring you the best value. Sometimes jet owners are better off chartering for one-ways to avoid repositioning costs for their own jet.
Dan Probert, M.S., USAFA 02 RaynAir Private Jets Member, National Business Aviation Association Denver Office: 720-535-6535 Mobile: 808-230-3759 Toll Free to NY Main Office: 1-800-650-2667 dan.probert@raynairjets.com
“This is the best explanation of the various types of private aviation usage which I have seen in writing. I am the "sort of" manager for a group of eight of us who own two Citation VII's, and we therefore have our own "mini-fractional program" and a small share in a Marquis card. We are all "graduates" of NetJets and other similar programs. When asked about our program by others, I always give them an explanation which is very close to what you conveyed in your white paper… I would like to forward this on to my partners and others. Thanks and we'll keep you in mind when we have scheduling issues which cause us to charter.” – Dr. Leonard Riggs in Dallas, Texas 2|Page