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The Unstoppable Rise of Private Aviation


Highlights: The Unstoppable Rise of Private Aviation. More than 23,000 private jets transport 0.0008% of the world's population much faster. About 600 new devices are added to a booming business every year. Its contribution to climate change and the danger of investment bubbles are the shadows of a sector that moves more than 38,000 million a year. If luxury has to do in large part with exclusivity, with enjoying what is forbidden to others, the ultimate privilege would be a time machine.

More than 23,000 private jets transport 0.0008% of the world's population much faster. About 600 new devices are added to a booming business every year. Its contribution to climate change and the danger of investment bubbles are the shadows of a sector that moves more than 38,000 million a year

If luxury has to do in large part with exclusivity, with enjoying what is forbidden to others, the ultimate privilege would be a time machine. "We sell something that is not for sale to ordinary mortals: time. A commodity that is difficult to exchange. We are a time machine. I can get you from your villa on the coast to your home, you, a hedge fund manager, six hours faster than it would take to take a commercial flight. And if that option is going to cost you $15,000 more than it would cost you to take your whole family on a scheduled flight, you choose it without batting an eyelid."

This is John Matthews, founder and CEO of AirX, a private aviation company with a fleet of 16 aircraft that competes in Europe, with headquarters in Malta and operational centers in London. A dissident and non-conformist in his sector, Matthews has no qualms about describing the true nature — or, at least, the truth as he understands it — of a business that moves more than 38,000 million euros on a global scale, and that projects to reach 60,000 million by 2030, according to the consulting firm Fortune Business Insights.

There will be time in this report to return to Matthews, and his stark vision of a business whose customers represent 0.0008% of the world's population, and are mostly men, over 50 years of age and concentrated in the banking, finance and real estate sectors.

The crew of the jet board the aircraft, located in front of the luxury Harrods hangar at Luton Airport.Manuel Vázquez

At the moment, the Sikorsky S-76 helicopter is about to take off from Battersea heliport on the south bank of the Thames. It's a cloudy morning in London, and visibility problems jeopardize the trip: a 20-minute flight to Farnborough Airport, southwest of the city. The alternative would be at least two hours on the road, with hellish traffic. The customer is the priority and, as soon as clear minimums are opened, the aircraft sets course for its destination. The waiting time has been comfortably carried out in a luxurious room, next to the track, with coffee, tea, pastries and liqueurs freely available.

Leather seats, soundproof cabin, large windows, space for eight people. It is part of a global fleet that includes 18 more helicopters and 270 jets, including the mid-size Praetor 600 and the sought-after Gulfstream G650 long-haul. They all belong to Flexjet, a company that has been operating since 1995, based in Cleveland (USA), which set out to conquer the European market shortly before the pandemic, in 2019.

The cabin crew serves travelers a few glasses of Ruinart champagne.Manuel Vázquez

In Farnborough, where it has its Tactical Control Centre, Flexjet has also set up the Red Label Academy. It's a culinary laboratory, of good manners and rules of etiquette for its cabin crew members. At the helm of the project is Francesco Vanerio, Vice President for Customer Experience. Throughout his professional career, he held senior positions in top hotels and restaurants around the world. The culmination of that trajectory came when he achieved the position of Bar Manager (manager of the various bars) of Villa D'Este, the palace on the shores of Lake Como, in northern Italy, which symbolizes all the luxury and refinement to which the rich and powerful can aspire. "That's where I met Flexjet's president, Kenn Ricci. The rest is history," explains Vanerio.

A story that is easily guessed. Ricci aspired to elevate the customer experience in an extremely competitive industry, where 5.4 million flights were flown in 2022 alone. And he managed to sign the Italian.

A member of the crew of a Flexjet jet at Farnborough Airport, southwest of the capital. Manuel Vázquez

In groups of eight or ten, the company's cabin crew spend a night at London's Dorchester Hotel. For years, it was the most exclusive in the city. Preferred destination for aristocrats, billionaires, writers and established artists. Restaurant with three Michelin stars and very little tolerance for shorts or sneakers. For several hours, Flexjet workers can order whatever they want and move around the hotel at their leisure. The goal: to put yourself in the shoes of your future customers, and understand the type of luxury they are used to.

The next morning, everyone will share their experiences — "it's such an elegant décor"; "everything seems designed to your liking"; "They read your mood, and they know when to insist and when not to bother you"—they will learn how to make dishes of a certain delicacy in small spaces and receive clues on how to surprise and please their passengers.

"Each of our jets has a distinct and unique livery. And the level of attention goes so far as trying to figure out the type of wine, for example, that's going to satisfy a customer the most," explains Megan Wolf, the company's Chief Experience Officer. "Although we have gone so far as to transfer a group of young senior executives who demanded burgers and fries from a well-known fast-food chain. ' The best experience of his life,' they told us later," Wolf jokes.

Flexjet operates under the economic model of shared ownership (fractional ownership, as they call it in the United States), whereby the owner — the company never calls them customers — buys a fraction of the aircraft (usually 1/16) and gets a minimum of 50 hours of flight time per year, with no possibility of terminating the contract for the first three years. The advance payment, without refund, is just over two million euros.

November 2023 - Report on Private Jet companies in London - ©Manuel Vázquez ----CAPTIONPHOTO---- Interior of the cabin of a G650 jet, with dining service. Manuel Vázquez

There are other business options, ranging from simply booking flight hours in advance to charter flights for a specific occasion. All of them, in the end, are much better than the idea of owning an aircraft individually, with the maintenance, crew and refueling costs that this entails. The price of a new Cessna CJU, probably the cheapest and lightest jet on the market today, does not fall below 4.4 million euros.

On board a G650, molded in the leather of its spacious seats and surrounded by fine wood, life takes on a different perspective. The cabin attendant pours a glass of Ruinart champagne, and begins serving the first salmon and cucumber sandwiches of a traditional English afternoon tea.

Isn't it an attack on efforts to combat climate change to use this type of aircraft? The reporter asks.

Francesco Vanerio, Vice President of Customer Experience at Flexjet.Manuel Vázquez

Global commercial aviation is responsible for at least 3.5% of human-induced climate change. Not only with the emission of carbon dioxide or nitrogen, but also with other pollutants such as smoke trails or soot residues. Private aviation accounts for just 4% of the sector's total emissions. But if the level of pollution, and its responsibility, is attributed to each person, it is clear that, proportionately, the flight of a handful of people is much more harmful to warming than that of 300 or more passengers on a commercial route.

"We purchase up to 300% of what we emit in carbon offsets and other gases [emission reduction certificates, verified by international standards, which serve to reduce the total volume of greenhouse gases in global terms], and we even give our customers the option to travel with sustainable aviation fuel," says Viv Diprose, Flexjet's Director of Communications.

Such exclusive companies, with a service within the reach of a few, strive to promote a more accessible image. It is true that, during the pandemic, the use of private jets increased by up to 40%, and it is an option that is still immensely attractive to the wealthiest, but it is doubtful, as has been advertised, that this type of flight is now more within the reach of other types of customers.

And any effort to provide detailed and original service and attention will be appreciated by users, but that is not going to be the main factor for them to shell out their money.

"Nonsense. We are not a service-focused sector, although it is obvious that we are not going to feed with carts like in a commercial plane." Let's go back to Matthews, the rebellious businessman. "Nor does it depend on the details. If tomorrow the shutter on one of my jet's windows breaks down, I'm not going to ground a $25,000-a-day plane just to fix it. It will keep flying until the day of the maintenance check arrives. We all have a broken seat that doesn't rest well or a carpet stained with food debris (...) The key is to have a spacious and comfortable cabin. But I don't have wifi on many of my devices. I continue to offer CD or DVD entertainment. It doesn't matter. I can transport a tired sports star or famous singer after a game or a concert anywhere in Europe in five hours less than any commercial airline. That's what money is worth," he says.

John Matthews, founder and CEO of AirX, in the cockpit of one of his jets. Manuel Vázquez

The number of private jets worldwide has increased from 9,895 in 2000 to 23,133 in June 2022. An increase of 133%. About 600 new devices every year, according to data from the High Flyers 2023 report by the Institute for Policy Studies in the United Kingdom. The general consensus among analysts suggests that the sector is robust, and its future, promising. Matthew, however, has decided to play Jiminy Cricket. He assures that there are dozens of companies that have gone into crazy debt to acquire aircraft valued at 40 or 50 million euros. All of them have thrived around a fairy tale, says the owner of AirX, which in many cases hides a pyramid scheme. The money advanced by new customers pays for the service promised to the previous ones, in a business of savage competition and limited profit margins.

"When you board a commercial airliner, you are protected by the airline, your travel agency or the consumer protection office itself. But the private jet industry is unregulated. I can go to my broker's website and buy a flight from Azerbaijan, Luton or Mongolia. Nobody cares if a billionaire loses his money on a failed charter," Matthews said. "But behind it there are savers who have bought bonds or shares, debtors who have supplied fuel or catering, and hundreds of workers who make a living from this," he recalls. But the sector will continue to move forward because, as the entrepreneur points out with some irony, this boom has generated a lot of addicts. From billionaires who don't want any other way to travel once they've met this one. A new world of tech geniuses has emerged who have amassed immense fortunes. They are the main customers of the industry.

Night view of London from a helicopter. Manuel Vázquez

The helicopter returns to Battersea Heliport. London's night lights enhance the metropolis dimension of a city accustomed to being the business and transaction yard of the rich and powerful from half the planet. About to land, the pilot begins to circle over the skyscrapers like a bird of prey. The runway is occupied by another ship that has had problems. We will have to divert to other facilities, to the west of the city, and wait there for the green light. Half an hour late. Insignificant for any commercial line traveler. An exception to avoid, however, in the exclusive world of private jets.

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Source: elparis

All news articles on 2023-11-30

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