Manufacturers of business aircraft are bullish on the corporate jet market, reflecting new and renewed interest in private transport. With general economic conditions improving and commercial airline demand again making the skies and airport terminals more crowded, corporate travelers and their managers have more impetus to look at private jet operators, which recently have been characterized by new program features, more sales resources and partnerships. Meanwhile, Lufthansa German Airlines announced its intention to craft a new product for premium passengers, building on its all-business class operations already running on three transatlantic routes, and upstart Primaris Airlines last week ordered 40 aircraft to expand all-business class operations slated for launch sometime in 2005.
Honeywell Aerospace, at the National Business Aviation Association conference this month in Las Vegas, predicted 8,300 business jet purchases worldwide through 2014, valued at more than $131 billion. "Overall, 2005 is shaping up to be a very good year for business aviation in terms of both new aircraft deliveries and world fleet operational tempo," the company said, noting the market had "hit bottom" in 2003 after a decline from peak 2001 levels.
The report considered responses from more than 1,000 corporate flight departments worldwide and cited growth in fractional ownership programs, interest in newer model corporate jets and a favorable global economic outlook.
Engine maker Rolls-Royce also predicted strong growth in the business jet sector beginning next year and continuing beyond 2020 across all geographic regions and market segments, ranging from four-seat "micro-jets" to larger business aircraft. The company also cited positive economic indicators and continuing growth in fractional programs, and noted reduced inventory of used aircraft and the need to replace aging business jets now in service.
In announcing five new orders last week for customers in India, Asia, Africa, Russia and the Middle East, Boeing Business Jets said its program now is sold out through next year. The company said it has sold 91 of the Boeing 737-derivative business jet models.
Private jet companies continue to make available more flexible membership programs and align with other travel suppliers. For example, American Express this summer established full corporate card acceptance programs with several companies, including Bombardier Skyjet and Flexjet, CitationShares, Delta AirElite, Sentient Jet and TAG Aviation. Amex said more private jet companies are offering pre-paid programs, including fractional jet ownership, which work well with automated bill payment services.
In other private jet news, Enterprise Rent-A-Car recently introduced a new feature on its Web site enabling corporate flight departments to reserve rental cars at general aviation facilities.
Despite positive indicators, optimistic forecasts among jet makers and a slew of new private jet programs, top corporate travel distributors have not seen rising demand for corporate jets.
"We just haven't seen much interest from our corporate clients," said Robin Schleien, former Carlson Wagonlit Travel president for North America, speaking this summer at the National Business Travel Association annual conference. "We have not seen the barometer move."
"All of us who have flown on private jets love them," said Orbitz chairman and president Jeff Katz, also speaking at the NBTA conference, "but it is not the real world."
Rather than following United Airlines' ill-fated Avolar project, the Lufthansa strategy has been to develop a private-commercial hybrid. For two years, the German carrier has offered scheduled, all-business class services on three transatlantic routes
(BTN, March 24, 2003). Though tickets for these flights are open to the public, the product is geared toward corporate travelers willing to pay a premium for extra convenience and comfort.
Lufthansa would not divulge its next step, other than to say it is "evaluating details of a possible offer for private jet services for its premium passengers." Lufthansa executives have considered expanding the existing all-business class product beyond current routes linking Chicago and Newark to Düsseldorf and Munich, but it is unclear if the new product would be similar to that operation, more along the lines of Delta's AirElite subsidiary or an entirely new model. Meanwhile, Lufthansa next month expects to open a new, exclusive first class terminal in Frankfurt.
While other European carriers continue to tinker with niche, all-premium products, notably Air France
(BTN, Feb. 9), their U.S. counterparts remain either unwilling or unable to pursue similar concepts. The closest product currently available in the domestic market is United's new PS transcontinental service
(BTN, Aug. 2), which the carrier plans to launch this month.
"It is difficult to blend commercial and private jets," said Larry Kellner, president and COO of Continental Airlines. "It doesn't fit well in the commercial airline model. The other concern is from air traffic control side. There are limits to private jet operations because of the physical constraint on airspace."
Las Vegas-based Primaris Airlines does not intend to blend business models nor use smaller corporate aircraft. The carrier next year plans to launch an all-business class operation between major U.S. markets and European business centers, initially with Boeing 757 aircraft
(BTN, Dec. 8, 2003).Primaris last week announced a 40-jet order from Boeing, including 737-800 aircraft configured with 94 business class seats and Boeing's newest model, the 7E7 Dreamliner,configured with 150 business class seats. Deliveries would begin in 2007 and 2010, respectively.
Primaris has said its network during the first two years of operations likely would include service from New York to several U.S. and European cities, as well as flights from Los Angeles and Washington, D.C.