Business aviation: Engines of commerce

Business aviation offers more flexibility than commercial flights, so what are the barriers to using this mode of transport?

Perception is everything. Private jets today are, on the whole, deemed to be the preserve of celebrities, oligarchs and royalty – despite this particular demographic representing about  1 per cent of total passengers.

Meanwhile, in the wider business world, those buyers who include private jets in their travel programmes are unlikely to publicise their use, for fear of sending out the wrong image of their organisation to the public, and also among employees.

However, jet charter companies are reporting an increased uptake against a backdrop of issues currently facing many aspects of commercial air travel.

Crowded skies are contributing to more delays with unexpected cancellations on the increase; a recent European Commission study highlighted 387,000 reportable commercial flight delays in Europe in 2017. Strikes affecting air travel are also on the up.

Meanwhile, according to the European Business Aviation Association, private jets link three times more city pairs in Europe than commercial aviation.

Richard Smith, director of charter for ACC Aviation, says: “Using more conveniently located airports inaccessible by scheduled services and avoiding congested terminals, streamlines the preflight process, delivering significant time savings. Enhanced schedule flexibility allows business jet travellers full control of their itineraries, while the privacy, security and connectivity of modern private jets allow them to utilise their aircraft as a productive working environment.”

Smith believes it is these factors that are driving use at ACC: “Private jet charter is a rapidly developing part of our business, and we’re seeing significant growth in this area.”

Elliot Bottomley, managing director of UK-based boutique charter firm Aviation Charter Limited, agrees: “Time is a finite commodity; it is impossible to make more of it, and we don’t know how much of it we have,” he says. “Our clients use business jets extensively as they understand that time is too precious to waste. Time is literally money for them.”

Gania Mahmoud, an executive assistant at an investment bank that uses private jets, says: “With private aviation, you have the flexibility to choose the time of departure and return, in contrast to commercial flights.”

Adam Twidell, chief executive of digital charter platform PrivateFly, confirms the trend: “We have seen a growth in bookings from business travellers over the past 12 months. The time from airport arrival to aircraft departure is often as short as 15 minutes.”

For some large corporates, it’s still a sensitive issue

Office in the sky
As well as time savings, continuous productivity is also cited as an advantage – private jets usually offer wifi from take-off to landing, effectively turning the aircraft into an office in the sky.

Most private jets also have video conferencing installed but, according to an international travel manager for a London-based private equity firm who wished to remain anonymous, this does not replace in-person meetings. “Our executives travel for face-to-face meetings. It’s a traditional approach to business that our team says you can’t beat. The expense of private charter, from a commercial perspective, is worth it.”

Meanwhile, aircraft manufacturers are paying more attention to creating environments that better support wellbeing. Bombardier Aviation, for example, has introduced a Dynamic Daylight System that helps synchronise passengers’ circadian body rhythms to combat jet lag. Meanwhile, On Air Dining, an in-flight catering company, has created menus to suit 18 specific dietary requirements including vegan, halal and gluten-free menus as standard.

Where to start
For those unfamiliar with chartering business aviation, it can seem a confusing process. “It’s not quite like searching on the web to find the next commercial flight that suits your needs,” warns Bottomley. “Unlike commercial operations, the itinerary is built around the executives’ needs. Flights can depart from any number of smaller airports, leaving at a nominated time and waiting at the destination for the passenger’s next leg. Any delay will be dictated by the passengers, not the airport or airline. Should a meeting overrun, private aviation supports the changing schedule.”

For travel arrangers, there are two ways to charter aircraft: work directly with an operator, which requires a good basic understanding of the industry, or book through a broker.

For the latter, BACA – The Air Charter Association is a useful starting point, as it lists brokers which, as members, adhere to the organisation’s best practice guidelines. Brokers can also hold Argus or Wyvern status – industry approvals that indicate the business has been independently audited for high-quality operational standards.

Brokers will be fully cognisant with what is required. Part of their role is to liaise with the aircraft operator to ensure regulations are met and steer a path through the complexities of compliance, if necessary.

Operators and owners who offer illegal charter flights, sometimes referred to as grey charter, do not adhere to the same standards and are, therefore, unlikely to be as safe as their legal counterparts. It’s also possible they may not be insured for the flights they undertake, by either the operator’s policy or their own. If in doubt, booking using a broker is always recommended.

Pricing up
In reality, there are numerous moving parts of each and every aircraft charter, making it difficult to quote a single rate or compare fees directly with commercial travel. The value is related to time saved along with convenience, discretion and higher productivity.

An average C-Suite executive’s time is worth around £4,000 an hour by Fortune 500 standards. A two-hour flight could arguably “cost” a minimum of £16,000worth of their time, if you factor in one hour either side for travel, including check-in. Flying privately gives executives more of their valuable time to spend on their work.

PrivateFly’s Twidell cites the example of a client who works with several partners in France. In a single day the senior executive had three meetings in different locations; a 7.30am breakfast in Paris, an 11.30am site visit in Reims, then a meeting with a manufacturer in Strasbourg at 2pm before heading home to Amsterdam for 5pm. By flying from dedicated business aviation airports, eating during the flight and holding a 2pm meeting in Strasbourg, the executive was back home by dinner time.

“The cost of the flight was £10,500 in a small cabin aircraft. Using commercial airline services would have required at least one overnight stay and another whole day out of the office,” says Twidell.

“While the cost of a private charter is higher than airline travel, when you factor in the costs of overnight stays and a day away from the office plus the stress and disruption of commercial travel as well as time away from family life, many clients will see this as a justifiable expense.”

Breaking barriers
While clients may see private aviation as justifiable, how many travel buyers would confidently advocate its use?

ACC’s Smith says his company recently exhibited at the ITM Conference, and there is now a focus “on long-term engagement to get networked in, to show what ACC is”.

ACC is growing its business with office expansion planned in New York, Kuala Lumpur and Addis Ababa.

“We do try to engage with people… but it’s either accepted as a mode of transport or it’s not. We’re there to support those who have the need, not convert them,” he says.

“For some large corporates, it’s still a sensitive issue. Culture comes into it – everyone needs to see it as a powerful business tool, something that makes teams effective. There are some cultural blocks in some organisations,” he adds.

Whatever the perception of private jet charter, there’s a growing demand for this niche service from top executives and that will, no doubt, continue.

How to work with a broker

Do your homework, think about all your requirements so your broker can find the best possible option for you.

Work with an accredited charter broker company for peace of mind and a stress-free experience.

Build trust and a good rapport with your charter broker – relationships matter.

Search and book as early as you can – this will give you the best options at the best price.

Seek explanation from your charter company – ask them why this is the best option for your business.

Check the required documents are available; at a minimum ask to see the operator’s AOC.

Always ask questions. A good broker will be happy to provide you with all the information and answers you need.

Don’t search far and wide; you will just waste your own, and the broker’s time, as operators see the same request from multiple sources. They may then freeze the price, blocking your broker from negotiations.

Read the charter agreement, terms and conditions and invoice thoroughly – additional charges may apply so check, eg, de-icing fees in winter, wifi and connectivity charges.

Seek transparency in the charter process – ask if you don’t understand the charges.

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