Private jet owner NetJets Aviation estimates that the average company plane flies less than 100 hours a year. Given that the average flight time is close to two hours, this means that these jets are only used for 50 days a year.
“I think it really doesn’t make financial sense to most people who have their own planes,” said NetJets president Patrick Gallagher.
To attract corporate customers and high net worth travelers for private flights, NetJets sold partial ownership, bringing buyers together to share the expense of maintaining employees’ salaries, insurance, hangar rentals and other expenses while allowing them to reliably access to the wagon’s private jet.
The business model is so tempting to investor Warren Buffett that after three years of using the company’s services, his multinational corporations Berkshire Hathaway Buy the website 1998. Today, NetJets operates more than 1,000 aircraft, making it one of the largest fleet airlines in the world.
When the pandemic subsided, demand for private party trips increased significantly as consumers eager to resume travel after lockdowns embraced what was called Revenge Travel.
“I think airlines lose top-notch passengers besides some international airlines,” said Janine K. Iannarelli, founder and president of aviation consultancy PAR Avion, who shifts spending to low quality of service from large airlines, as well as frequent flight delays or delays. Iannarelli added that these passengers are now flying privately, “mostly, they go to some stocks.”
Although the industry’s growth has slowed over the past two years, private jet travel is still on the rise More than pre-pandemic levels. Fraction ownership continues to gain market share for the entire private jet market. Last year’s departure rate of aircraft international aircraft increased by 11% from 2023, easily exceeding the 0.2% decline in the entire industry, according to data from Wingx, a provider of data analytics for aviation industry.
“Enterprise users are spinning off their planes and entering solutions like NetJets,” Gallagher said, whose clients include more than 40 of the 100 businesses of over 100 Fortune.
Gallagher and his industry peers say private jet operators have plenty of room to chase 2020 study Published by consulting giants McKinsey This shows that 93% of people can afford private flights do not.
Today, about 5,000 U.S. airports serve private jets, another advantage of private airlines is that it is generally more convenient than commercial airlines, which in comparison has access to nearly 500 airports. “Once private aviation users realize they save a lot of time, whether in the air or on the ground, they will be sold privately,” Ian Nareli said.
NetJets offers customers two different private avenues. The pricing of fractional ownership depends on many variables, but it always includes a one-time investment for “share” the “share” of the aircraft. For example, if an individual or company is going to buy a $16 million aircraft, the fee will be $1 million. Additionally, annual operating expenses are approximately $325,000, and the flight bill covers fuel and ground maintenance. NetJets’ score ownership package covers 50 hours of travel per year and can be purchased more as needed.
The company’s jet card program can make private travel more affordable, with plans to travel within 25 hours a year about $215,000. Still, the jet cards sold by NetJets and others are restricted. Not every aircraft in the NetJets fleet can be used for jet card holders and private jet flights cannot be booked during busy holidays.
Flexjet, a fleet score operator with about 325 aircraft, is buying 182 business aircraft from Embraer SA to meet growing demand, costing $7 billion. “I think our humanity has connections to accept all the business,” Flexjet CEO Michael Silvestro said to his growth strategy. “But in our case, we are very disciplined to make sure we can handle any new entrants who want to fly with us.”
Flexjet said it distinguishes itself from its competitors by relying on non-union pilots, a strategy that allows companies to assign small crews to each aircraft. The company also trains cabin staff to build hotel skills and enjoy wine in wine, curate local cuisine and create floral arrangements for a more luxurious experience. “It offers a more intimate level of service that we can provide to our customers,” Silvestro said. The interior of the plane itself has a custom theme, decorated in the style of Bentley’s luxury car or Ferretti Group.
Some private operators in the space not only offer flights, but also distinguish themselves by the full itinerary of leisure travel, which includes hotel reservations, hard-to-read restaurant hotspots and tours.
Since 2020, Capital One’s Velocity Black has been offering private aviation, as part of the company’s Fuller Digital Concierge Services suite. “We do see a lot of American members coming to Europe for summer trips,” Stephen said. West LakeVice President and Head of Private Aviation at Velocity Black. She said there is a strong demand for European destinations along the Mediterranean coast, especially for cities such as Santorini, Cannes and Saint-Tropez.
Westlake said the company has an internal team of experts who can help clients read. She said the total transaction value of private air bookings has increased by 60% from 2023 to last year. “We have seen a huge overall growth in private aviation and continue to grow within the black rate,” Westlake said.
Publicly traded Wheel UP has different innovative business models. For a membership of $8,500 per year, flyers can access the company’s 150 private jets, as well as discounts or dynamic prices for those aircraft. Different memberships allow flyers to rent flights with Wheels UP’s network of private party partners.
The third product available to Wheels Up customers is Delta gas line Launched this summer. Passengers booked in five European cities (Athens, Barcelona, Naples, Note or Rome) at the first stop at Delta One, at Delta One, which is one seat and then brings the wheels to a second, harder-to-reach private jet like Mykonos or Ibiza.
“If you think back to the beginning of aviation, private and commercial have always been completely separate,” said George Mattson, CEO of Wheels UP. “No one is trying to integrate them into one product.”
Mattson has previously served on the Delta Board of Directors for 11 years and has served as CEO of Wheels for the past 18 months. These companies have 40% ownership in private jet operators through Delta, which Mattson said is in line with the strategy of commercial airlines to create a more advanced and convenient experience for travelers.
“Do I want to leave the Delta, go downstairs, get on the bus, clean up safely, and get on a plane I was waiting for my arrival instead of six hours later?” Mattson asked, explaining his publicity to the client. “What’s the value? I think it’s worth it for some.”
