Over the last year there has been a surge of interest in private aviation, and quite a few Exclusive Resorts Members and friends have asked for my advice as they considered flying private. Here's my summary of what you need to know.
THE PRIVATE AVIATION INDUSTRY
The U.S. has the most developed private aviation market in the world with around 14,000 business aviation aircraft, which is 65% of the global market, and 575 private jet operators. With around 3 million flights a year in 2019, the industry went through a rough patch during the first half of 2020 when the pandemic struck, however, quickly turned around in the second half of 2020 and into 2021 for a multitude of reasons:
- New wealth creation from a robust economy and increased asset values across equities, fixed income, commodities, crypto-currency, and real estate.
- Many people who had the means to fly private (but chose not to) were switching from commercial to private due to the pandemic.
- Revenge spending as existing fliers began traveling more frequently after a year of saving significant disposable income and not traveling.
These factors combined have contributed to the busiest period in the history of private aviation where airplane manufacturers can’t build planes fast enough to keep up with current demand.
WHY FLY PRIVATE?
First and foremost, flying privately offers greater convenience and access. There are 5,000 airports in the US accessible by private plane, compared to 500 for commercial planes that are oriented around 6 – 8 hubs for changes.
Flying privately also enables you to select your departure time and land closer to your destination, and there are far fewer restrictions on who or what you fly with including sports gear, pets, and contingent on the operator’s policy, even your personal armory. Just don’t expect to take your kayak. Many people fly privately specifically because of the ability to travel with pets.
There are also significant productivity and stress reducing factors. You disintermediate the frenzy and cacophony of commercial airports and occasional humiliation of the TSA pat-down. You can park within a few hundred yards of the aircraft and most of the time, can even arrange to be dropped at the aircraft door. There are no lines, concerns over lost luggage, or transfers. From arrival at the Fixed Base Operator (FBO) to wheels-up typically takes 15-20 minutes, contingent on weather or Air Traffic Control (ATC) delays.
Depending on how and with whom you fly, there is also quality of experience and service. Private aviation crews are well versed in dealing with passengers that have very high expectations. The crews are super-professional, and the operators can curate the experience with your choice of food and drinks—be it Dom Perignon and lobster from Maine or your latest Keto-Paleo-Vegan-Plant-Based diet fad. They will even organize flowers for your significant other’s birthday or toys for the kids, dog, or both.
That said, you get what you pay for and need to be flying at the mid to upper range of the private aviation spectrum to experience the higher levels of service, which is generally on a super-mid or large cabin aircraft. VistaJet in my view is the gold-standard here—they put flight attendants on every aircraft and are highly service-oriented, providing everything from caviar to cashmere rugs.
For most private aviation flights however, set your expectations—particularly on light or mid-sized aircraft, as catering typically comprises of a club sandwich in a polystyrene box handed to you by the co-pilot and access to a hotel type mini bar, which will likely include the obligatory Oreos and Pringles, crowd favorites.
Private aviation also offers privacy and anonymity, particularly for those who have achieved celebrity status, value their personal space, or need a secure environment for high-power meetings or clandestine missions. Conversely, for those aspiring social influencers it also conveys an image of wealth and success.
THAT SOUNDS FABULOUS, I AM IN! SO WHAT DOES IT COST?
Good question. Let’s get this out of the way first and then you can decide if you read on.
As a basic rule of thumb, you can expect to pay a minimum of $5 – 8k per hour for a light jet and upwards of $10k per hour for large cabin aircraft. This can get up to $18 – 25k per hour for the latest and greatest Global 6000 and 7500. But of course, there are many other factors that come into play.
If you charter, then the short haul flights are exponentially more expensive and the hourly rates drop considerably as length-of-haul increases. This is because operators want to maximize the daily return on the aircraft, minimize cycle times on the equipment, and need to factor in time to embark and disembark passengers, which is generally the same irrespective of flight time. The aircraft also uses considerably more fuel climbing up to 40,000 ft than it does when it’s slipping along in clean air at cruising altitude.
For short routes flying two hours or less, you will typically see a jet card pricing at a fixed hourly rate to be the most efficient. Inversely, for routes 2.5 hours and longer, you will typically see charter as more cost effective, with a fixed jet card pricing at a premium to charter.
You also need to consider whether the operator needs to relocate an aircraft to pick you up, whether they can easily pick up another onward charter at your destination airport, or whether there is a risk factor in having an aircraft stranded with a mechanical when it’s outside of the operator’s typical network or primary service area. Hence you reel from sticker-shock when you ask for a quote for a flight from Miami to the Islands or a one-way to Hawaii. However, if you are flying from Teterboro to Van Nuys, which is one of the most highly trafficked routes in private aviation, it’s a steal-of-a-deal at around $34 – $38k each way.
WHAT TYPES OF AIRCRAFT CAN I EXPECT?
The selection of aircraft really depends on your mission and length of haul, as well as who and what you are taking with you—and of course, the level of luxury and what you are willing to pay for.
If you are traveling under two hours with lots of gear, Turboprops, such as a King Air or Pilatus are great options. They offer short-hop efficiency, typically with higher payloads than light jets and seating of around eight passengers, with plenty of space for gear. They are marginally slower, but also offer access to airports with shorter runways and even grass or dirt strips for the more adventurous.
Light Jets also offer short-hop efficiency, such as L.A. to Vegas in an hour, or even Palm Beach to Teterboro. They are typically Phenom 100 or 300, Hawker 400XP, or Lear 45s that will carry 4 – 6 passengers and will run at around $6 – 7k per hour. Expect an interior something like a Chevy Suburban with captain’s chairs, and with cabin heights typically under five feet you will have to crouch to get to your seat—and the head is in a small cubby at the back of the plane. Beware that many of these smaller jets also have limited luggage capacity due to both size and weight restrictions, so if you are doing a golf trip with your buddies and have a lot of luggage you will need to step up to a larger aircraft or use a Turboprop.
Mainly used for short to medium haul regional flights of around three hours, mid-sized jets like the Hawker 800, Citation XLS, and Lear 60s will carry 6 – 8 passengers and a decent amount of luggage. They are considerably more comfortable than light jets with more plush seating that can also be configured as a four-seat grouping with tables for work and dining. Pricing will typically be around $7 – 9k per hour.
Super Mid-Sized Jets
These are essentially mid-sized jets that have been equipped for longer range transcontinental flights, and typically Challenger 300/350’s or Citation Longitudes that will comfortably carry nine passengers and plenty of luggage. They have the ability to get in and out of airports with more challenging runways, such as Aspen. These aircraft will generally have a range of up to 7.5 hours or so, depending on payload. Pricing will typically run at $9 – 10k per hour.
Long Range, Large Cabin Jets
Long and ultra long-range aircraft are capable of intercontinental flying to global destinations. They are also great for transcontinental trips and will typically seat from 10 up to 18 passengers, with plenty of room for baggage. (Though, anything above eight or so passengers on a private jet becomes a little overly intimate.) Popular aircraft include Gulfstream V, G450, G500, G600, and Global 5000. Global 6000 and the new 7500 are capable of New York to Beijing non-stop. This class of aircraft is typically over $10k per hour, with the 7500 at over $20k per hour. It is possible to get some great charter deals on slightly older GIVSPs, Challenger 604s, and Falcon 2000s that have been well maintained or refurbished.
All things are not created equal, and you will likely need different types of aircraft for different missions depending on length-of-haul, number of passengers, and the amount of gear you are hauling. However, also keep in mind that not all aircraft can access every location or airport. As an example, if you are flying in and out of high-altitude airports with short runways in the heat of summer, and you have lots of people and gear, then you will also need an aircraft that has the performance capabilities to do this safely as this dramatically increases the risk factor.
WHAT ARE MY OPTIONS TO FLY PRIVATELY?
I like to think of private aviation on a spectrum, where you have full aircraft ownership on the left all the way through to buying a seat on a chartered jet through apps like XO on the right. In between, you have fractional ownership, jet cards, and membership programs of which there are many permutations and then on-demand charter. Most people treat private aviation a bit like a portfolio and utilize several different options, including commercial, depending on the trip and mission.
This is not for the faint-hearted. You need to be flying over 300 hours a year, or in a position where you have significant wealth or discretionary income that a couple of million dollars a year in operating expenses in crew salaries, maintenance, hangar rental, insurance, and unforeseen repairs. There is also the capital risk and asset on the balance sheet. Owning an aircraft doesn’t absolve you from mechanicals and if your significant other is traveling on a different itinerary, you will likely need a fractional share, jet card, great charter broker, or be willing to shlep it on commercial with the great-unwashed public. Also, a major mechanical failure on an engine can easily run into the hundreds of thousands.
If you are flying around 50 hours per year or multiples there-of, have a consistent annual flying pattern over a contract period (which is typically 3 – 5 years), value new aircraft, and want the peace-of-mind of a large fleet and the service network of a single operator, then fractional may be a good fit. Buying into a fractional program involves purchasing a share of a specific aircraft, where you take title to a tail number, giving you access to a fleet within that category of aircraft. Fractional providers typically calculate 800 occupied flight hours per aircraft and these shares are typically sold in 1/16th increments, which entitle the fractional owner to 50 hours of flight time.
A 1/16th fractional share with FlexJet or NetJets (the two largest players in the fractional space), with a five-year contract on a Phenom 300, which is a light jet, will cost you $700k, with a monthly management fee of $12k and hourly rate of $2,300 and fuel variable of just under $1k an hour. This brings the annual cost on the Phenom to just over $300k, or $6k per hour. For NetJets Citation Latitude or a FlexJet Embraer Praetor 500, categorized as a mid-sized jet, a 1/16th share is about $1.2m upfront, with a monthly management fee of $15k and hourly rate of $3.3k and fuel variable of $1.4k, bringing the annual cost to around $423k, or $8k per hour.
When the contract ends, you will get the residual value of the aircraft back, likely around 50%. However, just as with a car lease, there are usually all sorts of incentives to roll into a new contract or upgrade. Like a car lease, if you exceed your annual hours there are penalties and if you only fly 20 – 30hrs per year, then you are not maximizing your value and you are leaving money on the table.
The leading fractional providers are NetJets, with a fleet of 440 aircraft delivered in the last 10 years and 65 more slated for delivery in 2022, and FlexJet with a fleet of around 165 aircraft. Both these firms have a stellar reputation, and they serve well over 80% of the fractional market. To give you an idea of scale, NetJets combined with EJM does 313,000 flights a year.
One of the benefits of flying with NetJets or FlexJet is the service network and with larger fleets you also typically have the advantage of short reservation and cancellation windows, which can be as low as four hours compared to most programs that require 24 hours. NetJets does not have hourly minimums on light and mid-sized jets, which is handy for the Bay Area person flying to Tahoe, New York person flying to the Hamptons, or Denver to Aspen...you get the drift. With large fleets, the fractional operators also offer flexibility to interchange aircraft type based on the mission and access to their European fleets, for those wanting smaller jets to hop around Europe.
When calculating the costs of fractional versus other options, make sure you also compare apples-with-apples and bake in the fully-loaded hourly costs, depreciation, and capital risk.
At this time, NetJets is sold out of aircraft for 2022 and is now selling earliest deliveries for 2023. FlexJet still has fractional inventory available for 2022.
Fleets With Guaranteed Rate Programs
Several large fleet operators, such as VistaJet and Wheels Up, offer guaranteed availability and fixed rate pricing without the ownership component, either through tailored contracts based on hourly rates or through a membership model with fixed rates.
VistaJet operates a fleet of over 80 Super-Mid and Large Cabin aircraft, specifically Globals and Challengers, and position themselves as an asset-free model offering all the benefits without ownership with guaranteed availability at a fixed hourly rate with as little as 24 hours notice. With VistaJet’s Flight Solutions Program (FSP), they tailor the contracts based on the client’s flying profile and specific needs and they have a particularly strong international presence, primarily focused on long-haul transcontinental and international routes.
VistaJet is at the top of the food chain in terms of an in-cabin service experience, which in my opinion is unparalleled and the best in the industry. They operate a relatively new fleet and are one of the first to operate the new Bombardier Global 7500, with four currently in service. The Global 7500 can fly 17 hours non-stop—think New York to Hong Kong. It has a full kitchen and four living spaces with the aft most suite as a dedicated bedroom with en suite shower and wardrobe, depending on configuration. It also offers full access to the baggage area from the aft cabin lest you change your mind mid-flight and decide to disembark in your Chanel and Louboutin’s instead of Versace and Jimmy Choo’s. Rich people problems.
Jet cards were initially introduced in the late nineties as fractional ownership was increasing in popularity. The idea was to offer some of the benefits of fixed pricing without ownership. Jet cards are typically purchased in blocks of hours (25, 50, 75, or even 100 hour increments) and they entitle the cardholder to fixed hourly rates on a specific type or category of aircraft, with the categories generally defined by cabin size: light, mid, super-mid and large cabin. Most programs will also offer the ability to switch between types for an interchange fee.
The main advantage of jet cards is that they offer guaranteed availability, and you lock in pricing with fixed one-way hourly rates—with no repositioning or return charges. There is no price shopping or quotes via different operators, you get service guarantees and you will also get aircraft that meet contract standards of the jet card provider—so check all this carefully before you sign.
Keep in mind that the jet card companies make their margin between the fixed rate they charge you and what they pay the operator, so make sure you go with a reliable provider that has significant purchasing power, such as Sentient Jet, to ensure you get a high-quality aircraft and service backup. You also need to ensure you book your flights outside of the booking deadlines and read the fine print of the contracts for hourly minimums.
Sentient Jet is one of the leading jet card providers and offers guaranteed availability within 24 hours’ notice. The Sentient 25-Hour Jet Card provides access to light aircraft starting at $187k and the Sentient 25-Hour Plus Jet Card starts provides guaranteed access to mid, super-mid, and large cabin jets at $241,475.
NetJets and FlexJet have both suspended their jet card program and I recently had to call in a few favors with the powers-that-be at Sentient Jet to get a card for friend, as Sentient has only just recently reopened their waitlist.
On Demand Charter
Compared to jet cards, on-demand charter is like buying by the glass instead of the bottle with the added component of dynamic pricing. This has clear advantages if you have some flexibility, do not have consistent flying patterns, or if you fly less frequently. A great charter broker is an alchemist, and you should have one on speed dial anyway, however you utilize private aviation. The good ones have strong relationships with operators and know how and where to find the best value. Though a word-to-the-wise, if you are looking for discounted deals you might not be in the right place in considering private aviation—you get what you pay and 40,000ft is not the place to compromise on safety with your family. Always pick a reputable provider, operator, or broker.
If you are an occasional flyer and you have some latitude on departure dates, times, and airport location, many operators have flexibility on pricing. Thanksgiving is the cheapest day to fly, so if you feel a burning need to get out of dodge or ship the in-laws back home, then that’s the day to do it. Or choose counter-cyclical routes when everyone is flying to the mountains for Presidents' Day and you want to fly home, that’s the time. Basically, anytime that an operator needs to reposition an aircraft they have pricing flexibility, but the stars need to align with both schedules, and this is usually rare.
It pays to book early, particularly over the peak holidays, as pricing is significantly higher—though you may get some of the better deals outside of peak if you book within a week or so of your trip. Your length of stay in destination is also a factor, particularly for short stops. If the operator can bring you back on the same aircraft you will get a better deal. Given the high level of demand, many operators are also now quoting return pricing as opposed to taking the risk on finding a return in the market.
A good broker will ensure the aircraft you are chartering meets all the operating and safety requirements, and will check the fine print for any cancellation policies and payment terms. Keep in mind, however, that if there is a mechanical at the 11th hour and you need a replacement charter, you may be liable to pay the difference. This is also where a great charter broker comes into their own, by leveraging their connections and relationships to source a recovery aircraft.
Do not call multiple charter brokers for the same trip. You will end up competing with yourself and bidding up the pricing for the same trip. Just find a good, reputable broker that you can trust and knows you, and let him or her do their thing. A great Aviation Advisor or Charter Broker can save you a ton of money, make sure you are on the best equipment at the best price, and will be by your side to find alternative lift when the inevitable mechanical happens. Which, if you fly regularly, it most definitely will.
If you decide to go the on-demand route, I strongly recommend working with one of the charter brokerage divisions of the big operators such as FX Air, Wheels Up or XO, as they often have first call and get preferential pricing on their own fleets and the best options for service recovery. Be prepared for the fact that they may put you ‘off-fleet’, but you will have peace-of-mind that this will be to an independent fully-vetted operator that they work with, which can sometimes work in your favor as you may get upgraded to better equipment.
Most of these larger on-demand brokers also offer membership programs where you either put money on deposit, pay a subscription, or both—and then you will get preferential rates, access, and benefits.
As with everything else, charter prices are also significantly higher in the current economic environment. Expect to pay 30-70% more than you might have paid in 2019.
Should I Phone a Friend?
Most people have a friend or “know-a-guy” that owns an aircraft, and I often hear them say they’ll just phone up their buddy, bung him some cash to borrow his plane. Hey, it’s a win-win, what could possibly go wrong? Well, quite a lot actually—particularly if it’s an illegal charter. Keep in mind this does not need to be a financial transaction, it could be a barter or payment-in-kind arrangement. The FAA heavily regulates the charter industry and grants operators the authority to operate on-demand, unscheduled air service in the form of a Part 135 certificate. If your buddy’s plane does not have a current Part 135, then no dice. If the charter goes sideways, your tens of thousands of dollars of savings turn into a multi-million-dollar lawsuit.
Seat Share and Shuttles
JetSmarter, which is now been integrated as part of XO, was the pioneer in the seat share space. You can now buy seats on private jets, both scheduled and on crowdfunded shuttles. These are typically on popular routes such as New York to Florida or trans-con routes from New York to L.A., where one-way pricing ranges from $2k to $6k. Following a similar model to JSX, XO has also started running CRJ 200’s on the Westchester to Fort Lauderdale route and a relatively new player Aero flies mainly out of L.A. and Miami to popular destinations such as Aspen, Vegas, Cabo, and Jackson Hole. These are semi-private flights that utilize private terminals, or Fixed Base Operators (FBOs), so you conveniently disintermediate commercial terminals and TSA. These regional jets are typically all business class type configuration and are billed as a luxury alternative to commercial. These are great options to fly semi-private scheduled trips on a budget, but it remains to be seen whether the FAA and TSA will ultimately clamp down or there is a backlash from the commercial carriers.
HOW DO I PICK THE BEST PRIVATE AVIATION SOLUTION?
Firstly, you need to assess how many hours you anticipate that you will fly each year and the types of trips. If you expect to be doing over 50 hours a year and predictable and consistent trips, then fractional or a guaranteed rate program could be a great option. If you expect to fly 10 – 50 hours per year and you want the comfort of fixed rates and service guarantees, then a jet card may be the best option. If you are mainly flying over two hour trips, have flexibility, and are willing to go through the process of quoting each trip to shop the best deals and rates, then on-demand charter is the way to go.
Think through what is that you really need from a private aviation solution and what is driving your decision. Is it convenience, productivity, service, price, fixed rates, guaranteed availability, and peace of mind with service guarantees, or even flying on new aircraft? Decide what is most important, because there is no one-size-fits-all. Prioritize using the 80/20 rule. As an example, many people prioritize short term availability and having an aircraft available within as little as four to twelve hours, but in practice rarely ever use it.
HOW DO I SELECT THE BEST PRIVATE AVIATION PROVIDER?
There are lots of great operators with talented professionals and well-maintained fleets that are operated to the highest standards. There has also been a tremendous amount of consolidation in the industry, with several main players emerging alongside NetJets as industry leaders. These include Directional Aviation like Flexjet, Sentient Jet, and FX Air; Vista Global like VistaJet and XO, Wheels Up, JetLinx and Jet Edge. These firms all have multiple service offerings—they operate extensive fleets of aircraft and they are all staffed with talented professionals.
Most importantly however, find an Aviation Advisor or a Charter Broker that is trustworthy and has your best interests in mind. There are plenty out there.
HOW DO I ASSESS THE SAFETY PROTOCOLS OF FLYING PRIVATE?
When evaluating providers, look for aircraft operators with an impeccable safety record and clear commitment to security and safety. The operator should have a Safety Management System (SMS), Crew Resource Management (CRM) training, recurrent crew training and flight risk assessment protocols. They should also have earned the highest industry safety certifications, such as ARGUS Platinum and Wyvern Wingman, as well as an IS-BAO level-three safety rating. For an operator to earn these ratings they need to be fully vetted by the certification agency and complete regular safety audits, aircraft validation, and pilot background checks. These audits also incorporate a series of on-site safety assessments.
Safety comprises of both technical and human elements and the most critical safety factor of any flight is the level of experience of the pilots. You should ensure that the Pilot-in-Command (PIC) has a minimum of 3000 hours of flight experience and the Second-in-Command (SIC) at least 1,500 hours, and both pilots should have significant and recent time in the type of aircraft you are flying. The large fleet operators all have minimums, but if you are chartering from a smaller operator, you should ask these questions. If in doubt, ask for an Argus TripCheq, which works on a traffic light system and is a comprehensive analysis of the operator’s credentials with detailed information on the aircraft and pilot experience.
You should also ask about the operator’s insurance. To meet FAA Part 135 Certification, operators must meet minimum insurance requirements for aircraft accident and liability insurance coverage. The fractional operators, such as NetJets and FlexJet who operate under Part 91, also generally follow the more rigorous Part 135 standards. All the leading operators will generally maintain higher insurance coverage than is required on their fleets; however, it is worth asking about when you charter because some operators only maintain minimums. As a rule of thumb, I would recommend looking for a minimum of $50m combined coverage for lights and mids and a minimum of $100m for large cabin/long range aircraft.
A good Aviation Advisor or charter broker will check all of this as a matter of course and will be able to talk you through all of this.
A FEW PARTING WORDS TO THE WISE
When making the decision on private aviation, make sure you read the fine print and completely understand the fully loaded costs, pricing policies, service guarantees, and provisions. Check for peak-day rates, surcharges, and extended cancellation policies. All the guaranteed programs and cards will typically have flight minimums. You will also need to factor in taxi-time and whether catering is included. Check the costs of Wi-Fi expenses, which can extremely expensive. Then you need to include the obligatory 7.5% FET. All of this can clearly add up very quickly.
Keep your expectations realistic on pricing, service delivery, and in the inevitability of mechanicals and delays. Flying privately has many advantages, but it does not absolve you from the same ATC delays, mechanicals, and weather-related issues that you will experience commercially.
Talk to the different operators or find a great advisor or industry professional that you can trust and make sure that the provider you go with has excellent customer service, is available round-the-clock, and is willing to go the extra mile. There is nothing worse than being stranded with your family in the mountains on a freezing Sunday night without having someone that is available 24/7 and proactively finding a recovery solution for you.
Finally, make sure you keep safety top of mind, and, perhaps most importantly, in this business you very much get what you pay. So don’t try to cut corners on older, outdated equipment or with providers that don’t have a stellar reputation. If you are stretching financially to fly privately, then you are probably much better off sticking with commercial.
It certainly isn’t inexpensive to fly privately, but it sure is a great way to travel.
Written by James Henderson