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Responding to terrorism
Fabrizio Poli, managing partner of aircraft trading company Tyrus Wings, looks at how business aviation can offer an alternative solution for passengers who are now wary of commercial aviation after recent terror attacks and unexplained aircraft incidents
The past few years, sadly, have seen a number of terror-related attacks on civilian airports and airlines. We’ve also had unexplained incidents related to commercial flights where terrorism is speculated, if not proven. From Malaysian Airlines flight MH370 mysteriously vanishing in 2014 to the recent attacks at Istanbul’s Ataturk Airport, these events and others have been the subject of extensive media attention.
Does this harm the commercial aviation market? Certainly, it can make people nervous, and according to a report published by IATA in August, there’s evidence of a slowdown in growth.
But Tony Tyler, IATA director general and chief executive, is quick to point out that terrorism is not solely to blame, citing an “uncertain economic backdrop” and “political shocks” as other possible causes, adding that it’s “too soon to know whether recent terrorist attacks will have a long-term negative influence on demand”.
It’s hard to argue that it isn’t on people’s minds. They may still want to fly, but perhaps feel cautious when it comes to commercial services. With that in mind, what can we be doing in the business aviation sector to offer an alternative? Perhaps there are services and incentives we can promote to show that private jet charter is not only the preserve of the wealthy but a solution in the current climate.
Push your services more
Although growth in the commercial aviation market has slowed, the opposite appears true of the business sector. UK broker PrivateFly reported a 6.35% increase in overall European private jet flights year-on-year for July. The company is also reporting a 200% increase in online bookings for the first half of 2016.
A simple argument might be that travelers are already looking to private jet charter as a way of getting around – that could mean it’s time to really push your services, offer price incentives and make it easier to book flights.
Offer private jet holidays
If people are wanting commercial flights for their holidays, show that private charters can offer the same – could you form a partnership with a tour company, for example? Crystal Cruises is already flying holidaymakers to its luxury ships in a Bombardier Global XRS, and in 2017 will start using a Boeing B777 around the world. An indulgent example is The Four Seasons Private Jet Experience, which fly’s holidaymakers between 10 international locations on a single trip in a reconfigured Boeing 757-200ER aircraft.
Take the Netflix approach
Inform customers that private jet use is not as costly as they might think – they can pay a flat monthly fee and take as many flights as they like. Companies such as Surf Air, with its seven Pilatus PC-12 aircraft (and more on the way), offer set routes in California, with a launch date for European operations from London in October 2016. It has clearly targeted commercial passengers here, pushing incentives such as fewer crowds, no queues and no need to be at the airport several hours before.
Offer shares in your aircraft
While full ownership of a private jet may be a pipe dream for some, people could be tempted to buy shares in one. As an ‘owner’, a customer receives access for a set number of days or hours per year, depending on the share size, and use of a similar aircraft if theirs is unavailable. Notice times can vary, and fractional owners pay a monthly maintenance fee and an ‘occupied’ hourly operating fee. NetJets, JetSuite, WheelsUp, XOJet and Flightoptions are among those offering such schemes.
Buying a jet could be cheaper than you think
The private jet needs to be looked at as a business tool. When talking to Miami-based entrepreneur, Grant Cardone, he tells the story of buying his first private jet last year having never chartered a jet in his life. Most private jet sales people will tell you to charter if you fly less than 250 hours a year and start looking at fractional ownership or full ownership after that number.
Cardone looked at the deal very differently, he bought a pre-owned Gulfstream G200 for US$8m and figured if he bought a jet he would have to use it to make money. He operates the jet privately and does not charter and uses it to travel mainly up and down USA doing business deals. He says his jet is like his smart phone, a business tool that can make you money if used in a certain way.
About the author
Fabrizio Poli is a managing partner of aircraft trading company Tyrus Wings. He is regularly featured as an aviation analyst on Russia Today and as an aviation special correspondent for luxury magazine Most Fabullous. Fabrizio is also an accomplished pilot, having flown both private and commercial jets. He has a weekly business podcast, Living Outside the Cube, available as video and audio, and hosts aviation videos on his Tyrus Wings YouTube channel.
September 1, 2016
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