Air Charters Gain Business

Security, 9/11 jitters drive business to private charters

By: R. Scott Macintosh

Once reserved for the elite, private-jet usage has surged since Sept. 11, with more travelers seeking convenient alternatives to the time-consuming security procedures of commercial aviation.

“Just weeks after the attacks, everyone started digging into their pockets,” said Wayne Rizzi, president of Los Angeles-based air charter brokerage Air Royale. “After 9/11, people gravitated to something that was not viable in the past to see if it could work. Some found that it did.”

Time-pressed business travelers and luxury-minded leisure travelers are driving the growth in the sector, attracted by on-demand availability and pricing that can rival first-class and last-minute commercial-air bookings.

In the year following Sept. 11, charter company sales grew 10 percent, according to the National Business Aviation Association, propelling it to a $2 billion industry.

Air Royale said its business bookings grew 8 percent in the last two years, with leisure bookings up 12 to 15 percent.

Agent Connection

Pat Brown, an adventure travel specialist with Woodlake Travel Services in Houston, said her clients are drawn to private jet travel because of the convenience. Though definitely a high-end product, Brown said, "It's like having a balcony on a cruise ship. Once you've had one, you don't want to travel any other way."

Travel agents can earn commissions on private jet services but, Brown noted, companies could do a better job of marketing to travel agents. "It's just a matter of educating agents as to what's out there and their niceties," she said.

Consumer Base

With more companies targeting the growing consumer base, private aviation services now resemble commercial frequent flier programs, complete with Web booking sites.

Delta AirElite, a subsidiary of Delta Air Lines specializing in charters, launched its “Fleet Membership” program in February allowing travelers to pay in advance for their hours in the air. In the traditional world of jet charters, consumers would pay for all legs of a flight, whether they used them or not.

Similar pay-as-you-fly services account for one of the fastest growing areas of private aviation.

“It has become a very popular way of using private aircraft,” said Joe Moeggenberg, president of the Cincinnati-based Aviation Research Group Zineth, a Sudbury, Mass.-based travel technology company, launched in August to lures businesses looking for affordable options to airline ownership.

“They can have the same or similar aircraft on demand without making a huge investment on an aircraft upfront,” said Richard Walsh, a vice president at Zineth.

The Quincy, Mass.-based company has a service that allows flight operators to bid on consumer itineraries.

The company has grown more than 8,700 percent since it was launched three years ago, and now has monthly revenue of more than $1 million, according to CEO Nate McKelvey.

Frederick Gevalt, CEO of the Air Charter Guide, said there is concern that more pricing competition could hurt the industry.

“The whole industry is unbelievably competitive,” he said. “Some owners are pricing themselves down to where they are too low. If the owners and operators aren’t careful they are going to commoditize this business.”

Competitive Price

The average price for charters, however, has remained relatively stable over the last two years, according to the Air Charter Guide, and some pricing almost matches commercial fares.

From JFK to Los Angeles, for example, Air Royale offers a 12-passenger Gulfstream jet for $24,750, or roughly $2,062 per person. It has access to an eight-person jet at $11,500, or roughly $1,438 per person. Comparatively, a last-minute booking recently on Orbitz yielded a $2,221 first-class seat on American Airlines.

The travelers benefiting most from charters are going to small markets with limited service, the “airline refugees” that Gevalt says make up a third of the new charter business.

“They are the people who can’t make it work with the airlines,” he said. “They are the business travelers who are paying for a full-ticket on short notice and who gets stuck in seat 28B with a screaming kid behind him. They’re the ones who are fed up.”

With access to about 5,300 U.S. airports, compared with 558 used by commercial airlines, charters often can get travelers closer to their destinations. The demand for private charters is reaching leisure travel. San Jose, Calif.-based Classic Custom Vacations has teamed with Blue Star Jets to offer a charter jet option. It pays 5 percent commission.

“This seemed like the next logical step for the vacations we sell,” said Bob Hohman, president of Classic Custom Vacations. "