THE MATCH GAME
PAIRING UP A CORPORATE TRAVEL PROGRAM WITH THE BEST PRIVAT JET SOLUTIONS CAN BE A MAJOR ROI WIN FOR EVERYONE
For many corporate travel managers, the assumption is that the organization can’t afford a private jet, and there’s the challenge of selling it to management. Travel managers cite their very conservative, down-to-earth corporate culture – especially in the C-suite where the cost of travel garners a lot of attention, they say, and private jets do not fit the image of a prudent organization.
However, Private Jet Services founder and CEO Greg Raiff points out, “Many companies calculate the combined hourly cost associated with their executives’ time. Computing the annual compensation of an executive into the value of a single hour of their time can often offset the cost of private aviation.” Raiff calculates private jet travelers can get to the airport as little as 15 minutes ahead of time, compared to the 90-plus minutes required of commercial passengers.
“When they get there they don’t have to queue up in TSA or customs lines,” Raiff notes. “Once on board, the pilot can often head directly out to the active runway and be gone because there are fewer air traffic control holds at the lower-density airports business jets frequent. Once aloft, the folks on board can get down to business in total privacy, without worrying who’s sitting in the seat beside them.”
Consider the case of BTE Think Tank member Cheryl Benjamin, travel manager for Dart Container Corporation. “We use the private jet to move between our headquarters and state-of-the-art production facilities, turning two or three day trips into a single day,” she says.
“We can move multiple people to a location for the day at a price point close – or in some cases less than – the same price as commercial flights.” Taking into consideration the cost of hotels rental cars, meals and such the there-and-back capabilities of the business jet “makes it easier for Dart’s travelers, enabling them to more time at home with their families.”
Benjamin views the aircraft “as another tool to help the company accomplish its objectives and create efficiencies.”
GOING THROUGH THE PROCESS
At Private Jet Services, Raiff says there’s a process to see if your company’s travel patterns could be optimized by access to a private jet, and if so, just what type of flying machine best fits the firm’s needs.
“To begin with there are caveats,” Raiff says. “Before putting your people on a private jet, you need to assure your company and your travelers that you’ve signed on with the right business aviation provider. The source has to be vetted thoroughly, because safety is the primary concern,” says Raiff.
Next comes an ROI study, one encompassing:
The most common questions prospective private jet business travelers ask revolve around how to access the product. The options are myriad so the decision can be daunting. “Making the right decision is dependent on the impartiality and experience of who’s giving the advice,” says Raiff.
The first step is determining whether or not private jets actually have a place in the corporate travel scheme of things at your company. “If, and only if, business aviation belongs, the next question is what precisely is best way to make that happen?” Raiff says. “A typical fact-finding engagement might take a detailed look at who in the company is flying, where they’re flying and how often. The corporate travel manager has an integral role to play in this,” he adds.
After those factors are determined, a solution study is up next. ‘There are lots of aircraft options to consider. Identifying the best fit based on typical travel passengers, passenger group size and amenities is part of the process,” says the Private Jet Services CEO. “A thorough examination of client needs, including their flexibility with regard to aircraft type, will help determine the best mode of purchase.”
THE THREE FLIGHT PATHS
However ‘mode of purchase’ does not necessarily mean ‘buying an airplane.’ In the multi-faceted world of private jet travel what that really entails is what it takes to access the aircraft.
Raiff explains: “There are three fundamental options in play here: fractional ownership, jet cards and ondemand charter. Ownership is generally reserved for those flying more than 350 to 450 hours each year,” he cautions. “It’s generally not recommended as a ‘first stop’ in private aviation.”
essentially offers the opportunity for companies to own share in a private jet, while at the same time limiting direct responsibility for the aircraft as well as the required oversight. There are a number of fractional providers, NetJets, FlexJet and Executive AirShare among them. This avenue is best suited for companies whose business travelers take wing at least 100 hours per year. Commitments to fractional agreements last a full five years. As for usage, there’s usually a commitment to fly at least 50 hours per year. These savvy flyers often prefer to use a single model and manufacturer of aircraft, one that should take care of some 95 percent of their private jet requirements. Here’s an abbreviated look at the pros and cons of fractional ownership.
providers include Private Jet Services, Marquis Jet and Sentient. Jet cards offer an alternative to the sort of multi-year contracts offered by fractional ownership. Raiff says, “These programs rely on the broader on-demand jet charter market.” The cards aggregate demand. That means they can aggregate lift and offer “a guaranteed fixed rate.” These jet cards work best for business travelers who fly just a few times per year up to 300 hours or so. Here’s a short list of the advantages and disadvantages of jet cards.
Consider for a moment that there are some 2,200 aircraft charter operators in the United States alone. They can vary significantly when it comes to both safety and quality. “Charter buyers are far less significant and receive less care,” contends Raff. Insurance, pilot experience and aircraft age vary widely. That’s why he says prospective charter operators should be vetted thoroughly prior to each agreement you sign. Here are a few advantages and disadvantages of using charter business aircraft.