Europe’s private jet market reaches for the skies
While more are traveling on private jets, some firms are offering alternatives to splashing out on buying them
The world of luxury travel is epitomised by the image of stepping off a private jet to some high power meeting or exclusive destination.
However the allure of actually owning your own private jet appears to be fading fast for many corporations and wealthy people as a range of other options hit the market.
VistaJet provides fixed price seat access on its fleet of more than 50 Bombardier private jets. The company was founded in 2004 by Swiss national Thomas Flohr.
He says revenues in his business are currently booming.
"Companies are presently reluctant to put a US$50 million plane on their own balance sheet. That's a pretty hard sell for any CFO walking in to boardroom at this time."
Flohr set up his business in the belief that the private jet market was being underserved by a handful of U.S. firms who offer different businesses a fractional stake in a plane, which they then share.
One of the better known who does this is NetJets, a subsidiary of Warren Buffet's Berkshire Hathaway.
NetJets clients sign contracts that choose an appropriate plane and then pay for the hours that they need it to fly, an arrangement which the company described as 'vastly less costly' than owning a plane.
Mark Wilson, President of NetJets Europe said while global growth is flat lining, Europe is picking up.
"To date 2016 has also been a strong period of growth for us and we continue to increase our market share; we have seen a 4.1 per cent increase in revenue flights for the first half of the year year-on-year and a 7.5 per cent increase in passengers flown during the same period," he says.
Wilson said he also sees a more 'cost savvy' customer who doesn't see value in owning a jet.
"NetJets manage every aspect, from ground transport to slot bookings and flight permits.
"Previously corporations would have had to employ an entire flight department or management company to take care of this," he said.
Victor is a private jet service based out of London. The company doesn't sell jets for full or fractual ownership but focuses solely on 'on demand' chartering of third party operators.
Clive Jackson, CEO & founder of Victor agrees that European private aviation is expanding.
"Private jet travel is up 2.8 per cent across Western Europe with private jet charter, specifically, on the up in 18 of Europe's top 20 airports.
"We have seen a significant upsurge in bookings this summer on a global scale – everywhere from Las Vegas and Miami through to Ibiza, Mallorca, Nice and Sardinia. Summer requests for Ibiza, in particular, are up 441 percent year-on-year," he says.
Jackson said European business no longer looks upon owning a private jet as a worthy investment, but they still see the value of using one.
"[Our] users are highly entrepreneurial and competing on both a European and global business stage – looking to gain competitive advantage from recent Brexit developments by getting things done – moving - more quickly than many of their institutional competitors," he said.
In terms of what is next for private aviation, Jackson sees limited scope for subscription-style charter models who demand an upfront fee for the promise of a future service.
The Victor founder is betting that business will opt instead for an app based 'on demand' service as businesses veer away from commercial flying.