When Sergey Petrossov looked into booking a private jet for the first time in 2009, he found the only way to do it involved back-and-forth phone calls with brokers, hard copies of invoices, scans and faxes.
“I was wondering, what the heck is going on?’” he said. “It was like a stock market transaction in the ’80s.”
There had to be a better way. So in March 2013, Petrossov, based in Fort Lauderdale, Florida in the US, launched JetSmarter, an app where people can directly book private jet flights around the globe.
The private jet industry has been slow to catch up to a world where almost anything can be done with the tap of an app. But a crop of start-ups like JetSmarter, Victor, PrivateFly and Ubair (a play off of Uber, though it is unaffiliated with the ride sharing service) are changing how it works by creating online marketplaces for private jet travel that enable more choice, transparency and speed for on-demand bookings. As a result, securing a private jet is now more convenient and efficient than ever — and while you can’t call it affordable for most people, it is also cheaper.
Increasing the goods on the market — making smaller, less expensive jets available to fliers — lowers the entry point. On JetSmarter, for example, non-members can book a flight from Los Angeles to Las Vegas on a three-seat plane starting at $3,800 for the entire plane — that means three colleagues could fly privately for a business meeting for about $1,265 each, avoiding the hassles of some major airports and travelling on their own preferred schedule. Still pricey, compared to a first-class ticket on American Airlines, which costs about $615 one-way, but experts say it’s about a 30% savings over old fashioned charters with brokers as middlemen or prepaid services.
While each company differs slightly in its business model, they all allow customers to instantly price out charters of multiple aircraft options from point A to B and then instantly book the one you choose. It’s a similar concept to that of Uber, an app through which people can seamlessly order a ride and pay for it.
Adam Twidell, CEO of PrivateFly with headquarters in the UK, was a pilot with the fractional jet ownership company NetJets in the early aughts and noticed how unhappy frequent private jet fliers were with how it all worked — especially because, he said, customers never knew if they were overpaying for a flight.
He launched PrivateFly with his wife in 2008, making the company one of the first to piece together a fragmented marketplace and put charter bookings in the hands of the customer. Today, the company charters flights in 19 countries, including across Europe, China and the US.
When someone searches for a jet for a particular route with PrivateFly it analyses thousands of aircraft and pulls all the options, which can number in the hundreds. This also allows suppliers of all sizes to compete against each other, which Twidell said has made pricing more competitive.
“What we did was nothing that other industries hadn’t done but no one had done it in private jet sector,” he said. “Empowering the customer to see prices direct from suppliers, making the system as efficient as possible for all parties.”
When Twidell was getting the company off the ground five years ago, many industry leaders told him “no one would ever book a private jet online”, he recalled. But PrivateFly has grown by 75% each of the past three years and achieved £10.5m ($16.2m) in revenue for the fiscal year ended May. (PrivateFly charges a minimum 5% fee that varies based on a customer’s use of the concierge service.)
Clive Jackson, the CEO of UK-based Victor, founded in 2011, was convinced transparency would win people’s trust and bookings. When researching flights, customers can see full details about all the aircraft options, including tail numbers, an operator’s safety rating and the crew that will be on board. Victor’s 10% fee is itemised for customers to see.
“The fundamental difference with chartering a flight through Victor is transparency and disclosure,” he said. Victor raised £5.5m ($8m) in equity funding in March to expand into the US.
Geoff Perfect, an executive at a large tech company, had already been flying privately-chartered jets, usually to and from Lake Tahoe on weekends, before he started to use Victor. He said he was “blown away” by the app when he first saw it, in particular for its usability and integration.
For example, Victor bookings generate a boarding pass that appears in the iPhone Passbook. The app also prompts customers to rate their flight after landing. Perfect says chartering with Victor is easier, faster and more straightforward than doing so with traditional brokers. (The Victor app is currently only available on iOS, but bookings can also be made online.)
“It breaks down these old relationships in a way that everyone wins,” he said.
The old way of doing things
Before this new generation of companies popped up, people had three ways to book a private jet. The first was to book through a broker, in a process that offered no visibility and took days. The second was through fractional ownership, where people bought a share in an aircraft and were allotted a specific amount of time to use it per year (like a timeshare), such as with NetJets. And the third was to purchase a prepaid card with a company like FlexJet or Marquis (part of NetJets), starting at, say, $150,000 and burn the credit down at a set hourly rate.
The advantage of JetSmarter, PrivateFly, Victor and Ubair, these companies say, is that customers can book flights faster than with jet cards companies — PrivateFly has a 43-minute record from time of booking to getting a customer in the air compared with a four to six hour window for Marquis. There is also no initial financial commitment. (JetSuite, founded in 2006 as a budget alternative, doesn’t require cards or shares to charter, but offers only two types of planes and less advanced booking technology.)
Ubair launched this past April as a “fresh face on an old company,” CEO Justin Sullivan said. Formerly Private FLITE, which provided jet advisory services to owners and fliers, Ubair is an app armed with an algorithm to allow people to instantly book an aircraft. Private jet owners can put their planes in the Ubair system and the company will operate, manage and maintain the jets while generating a profit for the owner.
An eight-seat Hawker 800 can make its owner $20,000 per month in “free cash flow” in the Ubair systems, Sullivan said. Or, the owner can opt to fly 12 to 15 hours per month free with Ubair — or a combination of the two.
As private charter becomes more accessible and affordable, Sullivan sees a new demographic emerging, namely 25-to-39 year-olds with income over $500,000. As Petrossov puts it, private jet travel is broadening from the 0.1% to the 1% — and he hopes to extend it to the 2%.
The convenience, ease and comfort private aviation provides are appealing to many, and now with more competitive prices, it’s possible to envision it winning over business and first class flyers. As Twidell points out, it can actually be cheaper to charter a flight for multiple executives on one jet than to fly them first class on a commercial airline. And there’s no time wasted waiting at airports or with stopovers.
“We want to actively create a reliable source for people to travel and avoid the commercial airlines,” said JetSmarter’s Petrossov, “for people to never have to go back.” To that end, JetSmarter also recently launched a private jet shuttle service between NY and Miami on weekends it plans to expand service. The service is complimentary for members, and for non-members it is $1,845 per seat.
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