Although there are 5,000 airports in the U.S., only 500 of them get regular commercial service. And of those 500, frequent service is available at just 70. Even markets such as Cleveland and Memphis have lost significant service as major carriers have dehubbed.
For smaller towns, good luck. "Commercial air travel has economics that increasingly cannot be supported at the local airports at many small communities," says Michael Boyd, president of Boyd Group International, an airline and aviation strategy firm. "There's not enough traffic. It's simple economics. And as it gets harder and harder to get around, businesses that need to go from A to B are going to rely more and more on corporate jets." Or stay home and use technology to meet remotely.
Thank you very much, says Michael Silvestro, CEO of Flexjet, which sells shares in its jet fleet. "Approach private flying with the understanding that you will be paying a premium but be able to get where you want to go when you want to go," he says. "To many, that is priceless." While major carriers "upgauge" by dropping 50-seat commuter jets, private jet providers are offering more options: fractional ownership, subscriptions, Uber-like services such as Jumpjet, and open-leg charters among them. According to the National Business Aviation Association, only 3 percent of private jet travel is by that rarefied Fortune 500 company. Small to large businesses, charitable organizations, governments, and universities do the rest.
Average prices are coming down. But does that mean you should step up? Adam Cott, who owns a corporate branding company, uses Wheels Up, which sells flight time to its members. "Pulling up to the plane and being at the meeting in an hour... " Cott says and pauses. "Words really can't describe it. It's so much less stressful."
Via Wheels Up, which flies turboprops and jets, Westchester County, New York-based Cott visits clients from Boston to the Carolinas. "A two-hour round trip might cost me $8,000," he says, "but looking at the size of that order, it pays off so many times over." Cott doesn't fly alone. The math works best when team members go along. For longer flights, like a trip to Denver, he flies commercial. "One to two hours is my sweet spot," says Cott. "Anything over that gets expensive for me." Cott is typical of the customer whom companies like Wheels Up hope to serve: time pressed but money conscious. "We'd estimate that 30 percent of our clients came from commercial flying," says Wheels Up's head of corporate sales, Robert Garrymore. "For a lot of customers, the big carriers either cut routes or were flying too infrequently."
Directional Aviation, which owns Flexjet, offers several options. Fractional ownership, which means you own a piece of a fleet, becomes cost effective only if you fly 50 to 400 hours a year. Flying less than that? Sentient and others sell jet cards to individuals and businesses in 25-hour increments. Flying less than 25 hours a year? Then charter is the way to go. "For individuals or businesses that fly mostly commercial but on some special occasions need on-demand access to a private jet, charter is a pay-as-you fly model, with no upfront commitment," says Silvestro.
Wheels Up CEO Kenny Dichter, who obviously has a dog in this hunt, says a company with, say, $10 million in sales can make his service fit the budget. "It's an efficiency tool--you can have four meetings in different locations in a day," he argues. "There's no way you could do that on commercial."
According to Wheels Up, that $3,950 for an hour of turboprop flight time breaks down to $500 per seat if you use all eight of them. A jet is priced closer to $7,000 an hour. But it zips along 12 minutes per hour faster than a turbo; clients often opt for speed on longer flights.
How are your peers juggling the calculations? "The math that companies sometimes use is the cost-per-hour divided by the number of passengers on the flight," says one CIO of a California tech company who used to give the thumbs-up or -down for private jet use. "The additional factor is the cost of hotel rooms if there is an overnight stay." Compare that against the commercial carriers and availability. A private jet becomes more viable when you're moving several folks to a second- or third-tier destination, where commercial service is poor and schedules force an overnight and two full days dedicated to travel. "When you factor in the cost of those staffers from a comp perspective, it helps close the gap quite a bit," he says. Giving them another day to spend at home doesn't hurt either.
Compare the Fare
Will a private flight cost you less? It depends on the route and the number of people traveling. Below is a comparison of three one-way routes, with each flight carrying a group of seven or eight passengers.
|Category||Upfront Costs||Erie, PA. - Louisville||NYC - L.A.||Chicago - Baton Rouge, LA.|
|Jet charter: Seven-passenger||$0||$6,800||$37,000||$14,000|
|Membership: Wheels Up (Cessna Citation jet; Beechcraft King Air turboprop)||$29,500 initial year corporate membership; $14,500 per year thereafter||$5,925 (turboprop)||$35,000 (jet)||$13,900 (jet); $10,700 (turboprop)|
|Fractional: Flexjet (Embraer Phenom)||$560,000-$580,000 for 1/16th share; $7,000-$9,000 monthly maintenance||$5,000||$25,000 - $30,000||$10,000|
|Jet card: Sentient light jet||$125,000 for 25 hours||$5,000||$32,000 - $34,500||$11,000-$12,000|
|Major airline: first class||$0||$14,832||$9,640||$3,720 and seven hours of flying time|