Private Jet Charter News

Everyone seems to have an opinion on this so I thought that I would share mine.  Admittedly, as the owner of Executive Charter Services, a private jet charter agent, I have a significant amount of bias when it comes to individuals and corporations making use of private jets such as Gulfstreams or LearJets.  But after you clear away the hyperbole and the pithy sound bites what remains is that the proposed recipients of the “Bailout” money are companies who find themselves in dire financial trouble.  I’m not arguing how they wound up in this position, nor past usage of the company jet, but now - RIGHT NOW, is when private aviation is going to be most crucial to the survival of these companies.

The ability to travel from meeting to meeting with efficiency and rapidity, hold high level discussions en-route, and minimize lost productivity while away from the office is precisely why private jets are utilized.  You don’t see President Obama schleping around on Southwest, do you?  No, the taxpayers foot the bill for Air Force One and we are happy to do it.  We know that AF1 provides speed, security, and safety, to the most important American during this important time in our history.  While the media enjoys proclaiming private jet usage as the ultimate in wasteful spending, it is often more cost effective to charter a private jet than to fly commercially.  When all of the factors are taken into account - lost productivity, lodging, meals, rental cars, etc - the private jet becomes a true business tool.  (SEE BELOW FOR A CASE STUDY) But the media isn’t interested in that, the close detailed comparison would take too long and besides, it’s much easier to jump on the bashing bandwagon.

I will be among the first to admit that there has been and most likely will continue to be misusage of corporate controlled private aviation, but let’s not force troubled companies to add to their difficulties by arbitrarily compelling them to travel via commercial airlines.  I haven’t even mentioned the economic impact that the aviation industry and the private aviation sector have on the US Economy.  Billions of dollars of lost revenue, taxes, and jobs will result from a massive curtailing of the industry.

Yes, I agree oversight is needed and a more careful approach to determining the right use for a private jet is appropriate, but I also maintain that stopping use of private aviation altogether will ultimately hinder the recovery process.

CASE STUDY
A senior partner and five attorneys from a large and well known law firm based in Manhattan needed to fly from New York to Macon, GA for a full day of depositions and dinner with the client. The earliest airline flight with connection to Macon departed at 8:30 a.m. wouldn’t arrive until close to noon, forcing the quintet to depart New York the previous evening. Additionally, there were no flights departing Macon connecting to New York after 7:00pm which meant that they would have to spend 2 nights in Macon and leave the following morning for arrival at 10:30am back in NY. They contacted Executive Charter Services for assistance in determining if using a private jet would be cost effective.  We quoted a charter flight price of $9,475 for a seven-passenger Hawker 400XP business jet. The lawyers departed from Teterboro, NJ, near their homes, at 7:15am and arrived at the client’s office by 9:30am.  Because the five polished the questions for the deposition and worked on other cases while in the air, they were productive and billing during the 2 hours that normally would have been lost to travel.  After a full day of work and early dinner with the client, they departed Macon at 8:00pm, summarized the deposition on the way home, and were back on the ground in New York by 9:45 p.m.  While the cost for last-minute commercial tickets was about $4000 less than the price of the charter, the firm was able to add back 15 hours of billable time, saved the cost of 5 hotel rooms for 2 nights, and had 5 well rested, fresh, and happy attorneys who spent the night at home with their families.  In the end the private jet was actually $685 less than the commercial airline, making it a clear choice that chartering was the right option.

from NBAA - No Plane No Gain campaign:

The people and companies that rely on Private Air Charter know that utilizing a private jet is a valuable strategic choice, particularly in an unforgiving economic and political climate.  However, those outside of the business aviation community are often unaware of the benefits that chartering a private jet can provide.  When reviewing your air travel choices, use this checklist to see why using private jet charter is the best option for your mission.

 This flight absolutely cannot be canceled or delayed significantly.
 The destination is not easily served by commercial airline service.
 Need the ability to work and communicate aboard the flight.
 Proprietary information will be discussed aboard the flight.
 Need the ability to visit several cities in one day.
 Need the flexibility to allow for changes in the itinerary.
 Carrying specialized parts/equipment

If you’ve found yourself agreeing with these statements, you will want to investigate chartering a private jet for your travel needs.  In many cases, particularly with several passengers going to the same destination, a private aircraft can be as cost-effective as utilizing commercial airlines.

After a months long free fall, it feels like the business jet market is starting to stabilize, said Jack Pelton, head of Cessna Aircraft.

As reported by Molly McMillan for CharterX

After a months long free fall, it feels like the business jet market is starting to stabilize, said Jack Pelton, head of Cessna Aircraft.

“At some point there, we’ll be able to call the bottom,” Pelton, the company’s chairman, president and CEO, said of the drop in the market. “The negatives, like (order) cancellations are slowing down; we’re starting to see orders start to rise again.”

Aircraft deliveries are expected to hit their low next year, which will be followed by a steady climb, he said.

“The slope of that rise will be dependent on what the economy does,” he said.

Pelton’s boss, meanwhile, said Cessna’s parent company is not interested in selling the Wichita company.

“I don’t know where all the rumors come from,” said Scott Donnelly, president and chief operating officer of Textron. “I think I can be clear that no one is interested in any way, shape or form in divesting Cessna out of Textron. It’s a central asset of what Textron is.”

Pelton spoke last week in a broad-ranging interview on the eve of the world’s largest gathering of general aviation airplanes and airplane buffs at AirVenture in Oshkosh, Wis.

Cessna has cut half of its work force — about 8,200 people — since November. The company has had to cut production, and employees, as order cancellations and deferrals have stacked up during the economic downturn.

The layoffs include last month’s announcement of 1,300 cuts, including 500 employees who will receive 60-day notices by mid-August. Those cuts, Pelton said, will put Cessna at the right employment level for 2010’s planned lower production rates.

Pelton said he also has heard the rumors about Textron looking for buyers for Cessna.

“I work closely with the Textron board of directors,” he said. “I’ve never felt better than knowing in this difficult time, they are really committed to Cessna.”

Donnelly said there is no question Cessna and the entire general aviation industry are going through a tough time.

“We’ll come out of this an even stronger company,” he said. “We have a great brand, a great franchise and one, I know, will drive a lot of value going forward.”

Even in a business that is as cyclical as general aviation, Pelton said watching the business jet market continue to deteriorate has been difficult.

“When we saw the indicators continue to deteriorate past what we saw in the last recessionary period ... it became very clear we were in uncharted territory with circumstances that we’ve never seen in the past,” Pelton said. “That was very startling.”

Pelton said downturn has been a personally distressing time, forcing the company to dismantle what employees have built over the past five years. 

“Every time we have to reduce production and lay people off, it is a recurring nightmare,” he said. “I’ve had more of those days than I would ever like to relieve in my life again.”

Pelton also touched on a variety of other topics:

He said the biggest surprise of the downturn has been the amount of negativity and stigma surrounding the use of business jets.

Leaders of the Big Three automakers were criticized by members of Congress when they arrived on private jets to ask for a federal bailout. Early legislation, later changed, would have required companies receiving federal bailout funds to divest their corporate aircraft fleet or their jet leases.

It’s been a “constant haranguing — almost as if you’re involved in something that’s evil,’’ Pelton said. “It hasn’t stopped.”

Earlier this year, Cessna Aircraft unveiled an ad campaign to showcase the value of business aviation.

The company may have canceled the long-range, large Citation Columbus program, but long-term, the fundamentals for the aircraft remain.

Last year, the state, county and city approved more than $70 million in cash assistance and tax breaks to entice Cessna to develop the new jet in Wichita. The project was to have created 1,000 jobs with an annual payroll of $74 million. Cessna returned $10 million to the city and Sedgwick County earlier this month.

As reported by Molly McMillan for CharterX “We have an enormously faithful group of installed customers that are flying everything from 172s to Citation Xs,” Pelton said. “Long term, we’ll need to have products that will satisfy their needs as they grow and expand.”

Cessna continues to make significant investments in new product development in the light and medium planes, he said.

None will be announced, though, until the market improves, Pelton said. 

“If we were to go out today and hold a major press conference… everybody would say, ‘That’s great! I’ll call you when things get better.”