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Procurement

The Rise of Private Jets in Corporate Managed Travel

By Michael B. Baker / May 06, 2016 / Contact Reporter
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Boosted by mobile tech and demand in secondary markets, private jet suppliers now offer a variety of service levels, booking styles and corporate agreements. Here are four U.S. booking engines, three operators & the inroads they’re making into corporate managed travel.

JetInsight

This booking engine provides operators a network and technology platform. It does not add every possible aircraft but rather handpicks “the highest-quality operators focused on safety and customer service,” according to founder and CEO Dave Benjamin. Primarily for the United States, its aircraft reach worldwide.

How it works: Customers search, view options, book and pay online in moments.

Fleet: Aircraft range from turboprops to heavy jets like the Gulfstream V.

Traffic: “We hope to continue growing as fast as we can handle in 2016,” according to Benjamin.

Pricing: No membership fees, annual fees or commitments. Operators determine rates, and JetInsight technology calculates cost as requests are received. “As we grow the network, we are able to route aircraft more efficiently, and we expect prices to decrease significantly.”

Corporate travel penetration: A slight majority of business is corporate. JetInsight has had “initial conversations” with corporate travel buyers but is working to “deliver the right experience for them from the start.”

Distribution: It is looking into travel management company collaborations.

JetSmarter

The mobile-based jet supplier aims to “make flying private something accessible to the masses, not just a privileged 1 percent,” said CEO Sergey Petrossov.

How it works: Via the app, passengers charter entire aircraft, space on scheduled flights or space on flights assembled from pooled demand. They often fly within six hours of booking.

Fleet: More than 800 carrier partners around the world.

Traffic: More than 300,000 have downloaded the app, a monthly growth rate of 15 to 20 percent since its March 2013 launch.

Pricing: A $3,500 initiation fee, plus $9,675 annually. Memberships include free flights on one-way JetDeals flights, as well as free seats on regularly scheduled shuttles including Dallas-Houston, New York City-Chicago, New York City-Los Angeles and Los Angeles-San Francisco. Nonmembers can book these at discounted rates. Additional membership amenities include wholesale charter pricing and a luxury concierge service.

Corporate travel penetration: A typical user, Petrossov said, is a corporate traveler needing to book a last-minute trip. Corporate travel buyers also have booked charters and seats.

OpenJet

OpenJet’s cloud-based management software for private jet operators calculates and modifies the availability of fleet and crews in real time.

How it works: Travel arrangers submit origin and destination, date and number of travelers and OpenJet checks crew availability, runway configuration, fuel prices and aircraft performance, among other data points. Arrangers receive a choice of jet types and prices within 45 seconds and pay online.

Fleet: Turboprop to midsize. It partners with five operators in Europe and will expand to the United States this year.

Traffic: €1.5 million in revenue projected for 2016.

Pricing: OpenJet takes fees from operators for each flight sold and costs bookers no more than direct booking with the operators.

Corporate travel penetration: 65 percent corporate and 35 percent leisure. Corporate travel buyers are OpenJet’s “first target,” and it is launching a commercial campaign aimed at corporate travel managers, COO Raphael Vullierme said.

Distribution: A partnership with Amadeus launched in January, and others are forthcoming, Vullierme said.

Victor

Victor allows travelers to search, com-pare and book private jets to “cut out the inconsistency of brokers,” according to senior vice president for North America David Young.

How it works: Travelers search routes via mobile or desktop, and Victor responds within an hour with multiple price estimates.

Fleet: More than 7,000 jets worldwide.

Traffic: Membership grew 260 percent from May 2014 to May 2015, and the three-year average for sales has grown 142 percent per year, Young said. Victor introduced an app in April 2015 that accounted for half the year’s bookings.

Pricing: Flights booked through the app have ranged from $7,500 to $250,000, according to Young. Victor caps booking fees and provides “complete trans-parency of pricing and flight details.”

Corporate travel penetration: Its membership roster includes corp-orations and C-suite executives. Travel buyers use the tool to “quickly create bespoke plans with preferred operators,” Young said.

Distribution: It has established relationships with TMCs like the United Kingdom-based CTI.

Three Private Jet Operators

Jet Edge

The on-demand operator flies super medium, ultra-long-range, large-cabin planes, according to CEO Bill Papariella.

How it works: A significant volume is booked by phone, though digital delivery, including via JetSmarter, is growing.

Fleet: The fleet—50 jets based in Tokyo, Hong Kong and the United States’ West Coast, Northeast and Southeast—has grown 38 percent annually.

Traffic: Flight hours booked have grown between 32 percent and 35 percent each year, and Jet Edge would like to push that up to 50 percent. “We’re selling 60 percent to capacity, and we probably could have 80 percent,” Papariella said.

Pricing: Based on market rates and varies depending on aircraft type and age.

Corporate travel penetration: Fifteen sales executives manage a 50/50 mix of business and leisure. Jet Edge is working on “making ourselves more known” to corporate travel managers.

Distribution: It’s pursuing TMCs as part of its business-optimization efforts this year.

OneJet

The regional network operates scheduled flights between markets that have corporate demand but few nonstop options, such as Indianapolis, Milwaukee, Pittsburgh and Hartford, Conn.

How it works: It operates out of main airports, so the passenger experience is like a standard airline’s. It participates in TSA PreCheck to speed up security for passengers, who can book through corporate points of sale and through online travel retailers like Expedia.

Fleet: Hawker 400 light jet aircraft.

Traffic: Yields are growing between 10 percent and 15 percent every month as corporate traction and usage increase, the company reported.

Pricing: It’s based on demand and the cost of operating the segment, the reverse of standard airline revenue management; a flight will operate even with one ticket sold, so that first ticket could be priced at a “hurdle rate.” Highest fares are two to three times the lowest connecting fare, which is similar to full-fare economy class, president and CEO Matt Maguire said.

Corporate travel penetration: It has preferred agreements with 10 Fortune 500 companies, including FedEx.

Distribution: Partners with American Express Global Business Travel, BCD Travel and Carlson Wagonlit Travel. Flights are available via Sabre, Travelport, Worldspan and Apollo. ARC handles e-ticketing and settlements.

VistaJet

This Swiss luxury jet-service supplier opened its first office in the United States in the fall. Foreign companies cannot legally operate commercial aircraft in the United States, so Jet Aviation operates there as VistaJet.

How it works: The supplier looks for customers that can commit to 100 flight hours per year, but terms are flexible.

Fleet: Typically Bombardier aircraft from Challenger 350 up to the Global. The fleet averages 18 months old.

Traffic: It flew into almost 900 airports in 2015, including Dubai, Geneva, Hong Kong, London and New York City.

Pricing: VistaJet bills only for occupied flight hours, leaving off ferry charges and anything else following passenger drop-off, according to VistaJet U.S. president Ron Silverman. No monthly management fee, and leftover hours can be rolled over into a subsequent contract year.

Corporate travel penetration: VistaJet does not typically deal with procurement departments, as luxury brands do not go hand-in-hand with procurement pros’ cost-cutting goals, but it often works directly with CEOs and CFOs. It targets three kinds of Fortune 500 corporations: those that do not have flight departments, those that do not have international ranges and those that need to fill gaps when aircraft are out of service or pilots are on vacation.

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