The Jet Class
The next age of travel has arrived thanks to private planes. Ian Keown explains everything you need to know about charters, fractional ownership, and who to trust.
A few years ago, when Douglas Brown, a surgeon in Monroe, Louisiana ("300 miles from Memphis, 300 miles from Dallas") wanted to attend a seminar or conference, it was a major headache. He and his wife would have to leave a day early, fly to a hub, spend the night, and catch an early flight the next morning. In the process, he lost two entire days of surgery just in transit. Then, in 1999, he discovered the joys of fractional jet ownership. "With Flight Options—they're always on time, by the way—we have the flexibility to fly direct and set our own schedule," he says. "Now I can be more available to my patients."
Everyone knows the advantages of private jets: no lines, hubs, layovers, missed connections, canceled flights. You can get to the airport ten minutes before departure, knowing that the captain will wait if you get stuck in traffic; you sidestep security hassles without sacrificing peace of mind, and you know exactly who will be sitting next to you. What a lot of people don't know is that these days, chartering a Gulfstream V is almost as simple as booking a flight on Delta or American. You can even make your arrangements on-line with just a few hours' notice. Nor is it an especially lavish expense; in fact, chartering a jet can be cheaper than buying four first-class tickets (see "Privacy, Please"). Meanwhile, the entry level for fractional ownership of a private jet has recently dropped to $109,000. The new jet class has arrived, and it's no longer just CEOs and celebrities.
"Charter business has soared lately due to the overall frustration with airlines," says Clifton Stroud of the National Air Transportation Association. Just since 9/11, charters in general have risen more than 25 percent, and charters of small jets have risen by at least 50 percent. Manhattan "travel concierge" Bill Fischer (whose retaining fee is $5,000 a year) has been chartering jets for clients for more than a decade but says that last Christmas was exceptional. "I had about 50 private jets flying around," he says.
Certainly, the convenience of a private jet is hard to match. While commercial jets are limited to 563 airports in the U.S., small jets can fly into most of the country's 5,300 general aviation airports, getting you a whole lot closer to your final destination. And, of course, there is always the prestige factor. "A private jet is a tremendous business tool," says Hart Fessenden, vice president of SMBC Leasing and Finance in New York. "Putting a client on one and sitting opposite him for a few hours of discussion—you can't put a dollar value on that."
There are two approaches to having your own jet: straight charters or fractional ownership. The first offers a one-shot commitment, like renting a car, in which you simply pay for the number of hours you fly. Fractional ownership involves a larger commitment up front but guarantees you a given number of hours of flight time on short notice. Traditional charters are the most common, but fractional ownership is catching up fast. Industry sources estimate that the number of people using fractional ownership increased in 2001 by 40 percent.
There are currently over 10,000 executive jets available for charter in the United States, ranging from six-passenger Beechjets to the globe-spanning Boeing Business Jet, or BBJ, a special version of the 737 that has a range of 7,130 miles and maximum cruising altitude of 41,000 feet.
Brokers vs. operators There are two ways to charter a flight: through a broker or directly from an operator. Charter brokers (such as eBizJets, Le Bas, Skyjet, and U.S. Skylink) use planes which they neither own nor manage, and thus have a wider selection of aircraft at their disposal, which is especially useful if your schedule is tight. Operators (such as Executive Jet, PrivatAir, and Tag Aviation) either own and maintain their own aircraft and/or manage aircraft belonging to third parties. Operators say their aircraft, crews, maintenance, and operations are more dependable. (Brokers usually rely on third-party audits for maintenance, though some also follow up with their own inspections.)
Here's how a charter works. Say you need to fly eight people from Palm Beach to Pittsburgh. The broker or operator will track down a rental jet that carries the right number of passengers and can be ferried to Palm Beach at the appointed time. They can also arrange special meals, drinks, and movies en route, town cars at both ends, hotel accommodations—even theater tickets.
Travelers who know their way around the chartering business can make all these arrangements on-line. Those who want to specify unusual touches (gold-plated faucets, for instance) should probably use the 800 numbers. One family even had the seating of their chartered Boeing 727 reconfigured—at a cost of $200,000. You usually have to make such requests only once; brokers and operators compile dossiers on regular clients. A few charter companies stand out for their dependability, service, and resources (see "Top Charters," below).
What it costs Most charter companies charge per hour of flying time. Rates seem to vary no more than 10-15 percent, so these benchmarks will give you an idea what to expect: A Citation II can fly up to seven passengers for $1,600 an hour; Learjet 55, up to seven passengers for $2,400 an hour; Challenger 600, up to ten passengers for $3,800 an hour; Gulfstream IV, up to 12 passengers for $5,500 an hour; and a BBJ, up to 48 passengers for $12,500 an hour.
Be sure to check that "flying time" means time in the air with no additional charges for taxiing or waiting on the ground. Also ask whether the price includes pilot and copilot, cabin attendants, landing fees, all documentation, ferry time, and standard catering (special catering and air-to-ground phone calls are usually priced separately). Charters can be remarkably cost-effective on one-day, multistop round trips or for parties of six or more on longer jaunts (see "Privacy, Please").
Watch out for empty legs The catch with traditional charters: what's known as "deadhead," "backhaul," or "empty-leg" flights. Say you fly from New York to Los Angeles and stay over for a few days. In the meantime, your jet will need to fly back to New York—and you'll be charged for the round trip. If the same jet flies out to L.A. again to collect you, you'll pay for another round trip.
There are a few ways you can avoid extra fees. If the charter broker manages to rent the empty leg, you are partially reimbursed. Passengers on eBizJets can use the company's TravelCard, which works like a debit card: You pay $100,000 or $500,000 up front, depending on the aircraft, then simply deduct your flying time as you go along.
The upside of empty legs is that they can be excellent bargains if your schedule is flexible. Air Royale International posts "exceptional air charter offers" on its Web site, www.airroyale.com: a six-passenger jet from New York to Florida for $7,700, for example. Some search engines, like the one used by U.S. Skylink, even let you bid for fares.
Charters are usually recommended for people who fly up to 50 hours a year; for those who fly 50 to 400 hours, the savvy option is fractional ownership.
Fractional ownership (for simplicity, let's refer to it as F.O.) is a time share that gives you access to your aircraft for a guaranteed number of hours a year any time you need it, 24 hours a day, 365 days a year, on just a few hours' notice. The concept was dreamed up by Richard Santulli, a former mathematics professor, after he bought Executive Jet in 1984 and noticed that many people needed jets on a regular basis, but not quite enough to justify buying one outright. So in 1986 he started the NetJets program, offering partial ownership of private jets in units of 50 hours. Financial guru Warren Buffett liked the idea so much that he acquired Executive Jet in 1998 for Berkshire Hathaway, adding the muscle and resources of his huge conglomerate to an already groundbreaking company.
Today, NetJets has expanded to 440 aircraft, over 2,100 pilots, and a control-center staff of over 900 (including ten full-time meteorologists). If it were a commercial airline it would probably rank sixth or seventh in the country. Surprisingly, 20 percent of NetJets owners are individuals (including Tiger Woods and Pete Sampras), and 50 percent are privately held companies rather than major corporations.
Newer planes, better maintenance Being a fractional owner guarantees an almost-new aircraft every time you fly. (However, Flight Options also offers cheaper packages using preowned aircraft.) The average age for the NetJets and Flexjet fleets is 2.5 years (according to Boeing, the average age of commercial U.S. airliners is 12.4 years). F.O. aircraft are meticulously maintained. "My boss is a safety freak," says an assistant to the CEO of a $30 billion company, "which is why he flies NetJets." (NetJets also overhauls its interiors every 30 months.)
Some F.O. operators offer only certain brands of aircraft. Flexjet, a division of Canada's Bombardier Aerospace, has a fleet of Bombardiers: Learjets, Continentals, Challengers, Global Express jets. Flight Options (now merged with Raytheon Travel Air) has new Raytheon-built Beechjets and Hawker 800XPs plus their older fleet, which includes Citations, Falcons, Challengers, and Gulfstreams. The NetJets fleet includes the cream of the crop from several manufacturers: Citations, Falcons, Hawkers, Gulfstreams.
You may not get your own "tail number" (the set of figures emblazoned on the tail to identify individual aircraft) every time you make a booking, but most models within a fleet are identical. If you own a Citation and all the Citations are in use, you'll probably be upgraded. On the ten peak days a year, you usually have to reserve one or two days ahead rather than four to six hours. If the entire core fleet is reserved, companies may reach out to traditional charter fleets for additional aircraft, but they will inform you in advance. "We now have it written into our contract," says one CEO, "that we'll accept only aircraft from the core fleet."
What it costs Normally, fractional ownership involves an up-front purchase price (starting around $420,000) in addition to monthly management fees and hourly fees every time you take off. The size of your share guarantees you a set number of hours of flying time in a particular type of aircraft. A one-sixteenth share, for instance, entitles you to 50 hours; one-eighth, to 100 hours; a half share to 400 hours.
Here's an example of how a one-sixteenth share with Flexjet works out for an eight-passenger Learjet 45: Basic acquisition is $629,200; monthly management, $5,145 ($61,740 a year); the cost per hour, $1,650 ($82,500 for 50 hours). That adds up to an annual operating cost of $144,240. The management fee includes crews, insurance, administrative support, hangar fees, and crew training; the hourly rate includes fuel, maintenance, and actual time in the air, plus six additional minutes on takeoff and landing. (If your pilot has to sit around waiting for other planes to leave the runway, that's not your problem.) There are no charges for empty-leg flights. At the end of the purchase period—five years for Flexjet—the aircraft is usually repurchased by the company. Each owner then receives his or her share of the fair market value at that time, less a nominal remarketing fee. (NetJets, however, pays back 85-90 percent of the original purchase price with no extra fee.)
Now you can buy fewer hours Last year, an associate of NetJets known as Marquis Jet Partners introduced an intriguing variation on F.O.s that opens up the market to a wider audience. For as little as $109,000 up front, the Marquis Private Jet Card gives you 25 hours of flying time rather than 50 hours—and virtually all the other benefits of NetJets owners, but with ten hours' notice rather than the customary four to six. "We are aiming at a younger market, people in the twenty-eight to forty range," says Marquis CEO Alan Clingman. "We only began selling shares in November of 2001, and already we've signed up 140 clients. By the end of the year we expect to have 400." Golfer Jim Furyk claims that by using his Marquis Private Jet Card he can squeeze in more time with his family.
Leather Seats, Spode China: Aircrafts and Amenities
Charter jets and F.O. jets come in a range of sizes that vary between companies. In most cases, a light cabin holds up to seven passengers, a midsize cabin up to nine, and a large cabin up to 18 people. The interiors, usually decorated in variations of tan and ecru with lots of wood paneling and mirrored bulkheads, invariably have elegant leather seats that move sideways, forwards, and backwards—it's almost like flying around the world in your favorite club chair. (The most luxe are the kid-leather seats on PrivatAir's BBJs, which are custom-made in Germany for $15,000 apiece.)
The smallest aircraft may not have a pantry or fully enclosed lavatory. Light cabins generally have CD and DVD players and multiple TV screens. Bells and whistles such as Internet dataports and larger TV screens generally kick in at the midsize level, while large cabins offer fax machines and pantries or galleys. But what makes private jets so inviting is all the little refinements. Poke around a NetJets Falcon 2000: A drawer under each seat has snacks; the mirror in the bathroom conceals toiletries and medicines; the galley comes with microwave and convection ovens. You'll even find a hot-start defibrillator, an inflatable double mattress, and two air-to-ground phones.
The grandest private jets have real beds and showers with plenty of hot water so you'll arrive at the negotiating table with your wits razor sharp and your pants nicely pressed. On PrivatAir's BBJs, meals are served on Wedgwood china. All F.O. jets, by the way, come with ashtrays—it's your aircraft, and you can smoke if you feel like it (the operators claim that they can eliminate all trace of stale smoke by the time the next owner comes aboard).
F.O. companies host air shows for potential buyers in various parts of the nation so you can check out the jet interiors; they'll also arrange demonstration flights.
Peace of Mind: Safety and Security
Many charter jets and all fractional-ownership jets are flown by two pilots; all pilots conform to Federal Aviation Administration standards. Though F.O. pilots have been flying jets for years (a minimum of 5,000 hours for PrivatAir BBJ captains), they still have to spend 20 or more days a year retraining, triple the requirement for most commercial pilots. With NetJets, both the pilot and the first officer are qualified as full-fledged captains. (Ten NetJets captains have actually served aboard Air Force One.) Most private jets have such state-of-the-art avionics that they're often better equipped than some commercial jets.
Most charter operators and general aviation airports have imposed new security measures in recent months. For instance, you might not be able to take your car right to the aircraft. You may also have to send the company a complete list of passengers when your reservation is confirmed; only those people will be allowed on board.
Because of their high-profile clients, companies such as NetJets, PrivatAir, and Flight Options have also assigned security specialists—sometimes ex-Secret Service, as in the case of PrivatAir—to handle all aspects of their clients' and their jets' safety around the world. NetJets will even send specialist personnel with the aircraft to "maintain its integrity" while it's on the ground overseas. In addition, PrivatAir BBJs are equipped with revolving surveillance cameras to monitor traffic and personnel servicing the aircraft while on the ground.
All charter and F.O. aircraft are regulated by the Federal Aviation Administration. If you have any doubts about a specific aircraft, ask for its certificate number, then investigate the history of incidents and accidents on the FAA Web site (www.faa.gov). According to the National Business Aviation Association, corporate and executive business aircraft have a safety record comparable to that of commercial airlines. NetJets has been flying 15 years without what the FAA calls an "incident."
With such a promising future, F.O. companies are buying up new aircraft like crazy. NetJets alone, which spent $20 billion over the last six years, has placed orders for another $12 billion worth of aircraft, while Flight Options has orders amounting to $1.7 billion. Meanwhile, charter operators are exploring ways to introduce more people to the world of private jets. A company called Indigo (877-446-3446; www.flyindigo.com) has begun flying luxurious ten-seater Falcon 20s between Chicago's Midway and Teterboro in New Jersey (near Manhattan) at prices comparable to full-fare coach on commercial airlines—and is looking to expand to other airports.In Albuquerque, Eclipse Aviation plans to introduce a new lightweight jet taxi, the Eclipse 500, that can fly six people at 400 mph; and another company, the Florida-based Nimbus Group, has ordered a thousand 500s and plans to operate taxi services at just $600 an hour. You'll have to wait until 2004 for the first Eclipse 500 taxi service, but in the meantime scores of gleaming new Citations,Gulfstreams, Falcons, and Hawkers are sitting in their hangars just waiting to fly you and your family wherever you desire. But be warned: Private jets can be addictive.
ll charter companies, it seems, claim to be "the industry leader," several say they have "the largest selection of aircraft" and all swear unflinching dedication to safety. So how to differentiate between them? Start by logging on to the Air Charter Guide Web site (www.aircharterguide.com), which offers advice, questions, and links. Here are some of the top brokers and operators:
EBIZJETS, a portfolio company of Credit Suisse/First Boston Private Equity, has a network of more than 1,400 aircraft around the world. Its TravelCard, "the first viable alternative to fractional ownership," is popular with sports stars like Alex Rodriguez and Shaquille O'Neal. 877-324-9538; www.ebizjets.com.
EXECUTIVE JET, with more than 40 years' experience, has a huge database and a fleet of 440 aircraft. (NetJets is the company's F.O. program.) 877-356-5387; www.ejcharter.com.
LE BAS INTERNATIONAL, founded in 1990, has a database of 5,000 aircraft and offers Double Membership Rewards to holders of the American Express Platinum and Centurion cards. 805-927-9797; www.lebas.com.
PRIVATAIR has 55 jets, including three BBJs, and a brand-new, fully-equipped terminal in Geneva. 800-380-4009; www.privatair.com.
SKYJET was founded in 1997 to consolidate the vast inventory of the U.S. charter market into one proprietary computer-reservations system. It tracks more than 525 aircraft. Skyjet is now part of Bombardier Aerospace. 888-275-9538; www.skyjet.com.
TAG AVIATION, which makes up part of a 45-year-old Geneva-based company, operates 150 aircraft. 866-235-9824; www.tagaviation.com.
U.S. SKYLINK claims to have access to a real-time database linked to 1,000 aircraft operators who will respond competitively to your bids for low-cost charter fares. 800-847-2477; www.usskylink.com.
Sure private jets are more convenient than commercial airlines, but can they actually save you money? Skyjet recently commissioned a study to find out. It discovered that while chartering a jet is rarely cost-effective for one person, it can be considerably less expensive than buying four first-class—or in some cases coach—tickets. Here are some sample prices and itineraries from the study. Charter costs are based on round trips with no empty legs.
First-Class on a commercial airline: $2,029
First-Class for four passengers: $8,116
Charter of a Learjet 35: $5,406
First-Class for four passengers: $7,344
Charter of a Learjet 35: $8,288
Full-Coach for four passengers: $4,952
Charter of a Learjet 35: $4,401
Full-Coach for four passengers: $6,905
Charter of a Learjet 35: $4,549
Your Own Jet
A useful introduction to fractional ownership (F.O.) is The Buyer's Guide to Fractional Aircraft Ownership, a booklet published by NetJets. Quite a few companies offer F.O.s, but the leading players include:
FLEXJET is a division of Canada's Bombardier Aerospace, which was rated the Best-Managed Large Aerospace company by Aviation Week & Space Technology. It offers a variety of models of Learjet, Continental, Global Express, and Challenger jets. 800-353-9538; www.flexjet.com.
FLIGHT OPTIONS was ranked first in the 2001 Study of Fractional Ownership Experience compiled by Aviation Research Group for reliability and problem solving. The new fleet is all Raytheon aircraft; there are also 25 Fairchild-Dornier Envoy VIIs on order. Preowned aircraft are available for substantially less than the usual $400,000 up-front payment. 877-703-2348; www.flightoptions.com.
NETJETS, the pioneer in fractional ownership, is now the largest F.O. organization in the world. 877-638-5387; www.netjets.com.
MARQUIS JET PARTNERS The Marquis Private Jet Card offers the lowest F.O. entry fee for new jets, with access to the NetJets fleet. 866-538-1400; www.marquisjet.com.
Ian Keown, the author of Caribbean Hideaways (Frommer's), wrote about Caribbean hotels and resorts in the last issue of Departures.