WINNERS OF THE CRISIS? PRIVATE JETS…
The global pandemic has played into the hands of business jet operators. As passengers continue to face complicated and ever-changing travel restrictions, they are seeking out simple and effective solutions to realise their travel plans.
Since the beginning of the pandemic, commercial airlines have been grounded and flights cancelled on an intermittent basis. This leaves those with urgent travel needs in a lurch.
In light of this situation, private aviation has started to pick up business. Before the pandemic, only about 10% of people with the appropriate means took private business jets. Now, 71% of VistaJet’s new requests are from passengers who had not been regular customers in the past.
VistaJet founder and chairman Thomas Flohr explains this trend. Because of current limitations in global connectivity, passengers are switching to private jets. “We have seen a drastic reduction in commercial flight routes worldwide. People have a continued need to travel, however. The show must go on,” Mr Flohr explained to Connoisseur Circle.
“As scheduled flights have experienced a drastic plunge in passenger numbers, numerous flight routes had to be canceled,” he said. VistaJet has therefore started to talk to several airlines to offer what often is the last leg of a flight, from a major hub to a smaller airport, for example.
In cases where there were too few passengers on board for a flight to remain profitable, several airlines have approached VistaJet to transport some of their premium customers on a Global Express private jet.
“Let’s take a Boeing 777 with about 10 seats in first class as an example. When the airline only sells four seats, the big plane won’t leave as scheduled. That’s when we step in and provide our service,” Flohr explained.
According to Mr Flohr, the fundamental difference between a scheduled commercial flight and general aviation is that airlines depend on the load factor, but that factor has plummeted due to the pandemic.
The much smaller aircraft used in business jet aviation are not dependent on the load factor and are better equipped to provide point-to-point service. “People want to touch as few surfaces as possible on a plane or at the airport,” Mr Flohr said. A trip by private jet has 20 touch points at the airport on the way to the plane, as opposed to 700 for commercial flights.
A trip by private jet has 20 touch points at the airport on the way to the plane, as opposed to 700 for commercial flights
Also, reduced air traffic has a doubly negative effect. If the number of direct flights is reduced, people need to change planes more often. “This again increases health risks and drives a significant number of passengers to business jets,” said Mr. Flohr.
“We have a total of 130 jets in our fleet. VistaJet is a global player and a trusted brand,” he added.
The company lets passengers order a private jet only for the real-time hours they need it, which creates a very low entry point when booking a flight. “There are people who can afford to fly on a private jet but have not yet done so,” said Mr Flohr.
“COVID-19 removed a barrier and people realised that traveling on a private jet was really the most efficient way to fly. I think that this trend will continue. Will all our new customers remain loyal to us? Of course not! Some will go back to the commercial infrastructure,” Mr Flohr added.
The average utilisation rate of the business jet amounts to only 250 flight hours per year. Mr Flohr says that’s a waste of resources, adding that if you increase this number to about 1,000 hours per year, then you reduce costs.
The fixed cost of an hour in a business jet—including pilot, amortisation, purchase price, etc.— accounts for about 65% of the total cost. “If you have 1,000 flight hours, you reduce the [fixed] cost by 75%, and you’re looking at a total cost savings potential of 30% to 40%. That gives us a decent margin,” he added.
To achieve this margin, however, business jet operators need the global infrastructure so they can avoid empty flights. “You need the network effect and a flexible, constantly operating fleet that relies on state-of-the-art technology,” Mr Flohr said. VistaJet is up to the task.
“We’re democratising the use of business jets,” he said. The stereotype of the “jet set”—i.e., only wealthy people using this type of aviation—is becoming a thing of the past”, Mr Flohr added.
But business jet operators are also learning from commercial airlines. “Some of them have their planes up in the air for 4,000 hours a year. Some of them only have one type of plane in their fleet. Both measures lower costs,” Mr Flohr explained.
“Partnerships between companies—including hotels, tour operators, private airlines, yachts, chauffeur and concierge services—are more essential than ever,” Mr Flohr said. These kinds of partnerships give customers peace of mind at every step of their journey.
To date, VistaJet has flown to 187 countries, covering 96% of the globe.
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