{"id":140421,"date":"2021-10-01T13:42:33","date_gmt":"2021-10-01T13:42:33","guid":{"rendered":"https:\/\/precoinnews.com\/?p=140421"},"modified":"2021-10-01T13:42:33","modified_gmt":"2021-10-01T13:42:33","slug":"private-jet-market-grapples-with-surge-in-get-me-away-demand","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/private-jet-market-grapples-with-surge-in-get-me-away-demand\/","title":{"rendered":"Private Jet Market Grapples With Surge in Get-Me-Away Demand"},"content":{"rendered":"

Even people who can normally afford to charter a private jet at a moment\u2019s notice <\/strong>are being forced to be patient and, often, pay more.<\/p>\n

It\u2019s all because of the pandemic.<\/p>\n

Early on, few people were flying at all \u2014 or really had anywhere to go. Since then, demand for high-end travel, in particular, has increased exponentially, as more of the wealthy opt to avoid airport lines and crowded commercial flights. But so many are flocking to private jets, there are not enough planes and pilots to serve them.<\/p>\n

That has been coupled with the same supply chain problems that have plagued many other parts of the economy. Want a replacement tire for a jet and someone to swap it out? What could once be done in a few hours may now take a week or more, one jet company said.<\/p>\n

As a result, providers that used to be able to quickly send out a jet to members have been changing their terms. XO, for instance, now requires 72 hours\u2019 notice, up from 24. Ascension has gone to 24 hours from 10.<\/p>\n

And NetJets, the second-largest air carrier in the world by number of planes, has stopped selling new jet cards \u2014 the equivalent of prepaid Starbucks cards, loaded with jet hours to whisk the wealthy anywhere they want to go.<\/p>\n

\u201cRecord private travel is beyond the capacity of the system,\u201d said Doug Gollan, founder of Private Jet Card Comparisons, which monitors the industry. \u201cSome of this is beyond the control of the operators, like parts shortages or fueling delays \u2014 not because they forgot to order fuel but because there\u2019s a shortage of truck drivers.\u201d<\/p>\n

And that, Mr. Gollan said, is coming at a time of record demand for private jet travel around the country and, in some instances, the world. \u201cIf you\u2019re in New York, it\u2019s not an issue to go to Palm Beach,\u201d he said. \u201cBut these are national programs. If you\u2019re living in Idaho and want to go to Oklahoma, they have to get a plane in there, and these jet providers can\u2019t source the planes profitably in 12 hours or 24 hours anymore.\u201d<\/p>\n

He pointed out that most jet card programs, bound by contracts that go on for dozens of pages, require people to pay $200,000 or more upfront, so few fliers are pleased by the delays.<\/p>\n

Let\u2019s be clear: Flying private is still an incredible luxury that only some people can enjoy. But they are flooding the system.<\/p>\n

Before Covid-19, there were about 100,000 regular private jet fliers in the United States, out of some 1.5 million people who could afford to charter a plane, according to a 2020 report from the consulting firm McKinsey & Company. After last year\u2019s shutdown, the report found, many more of the people who could afford to fly private did.<\/p>\n

\u201cSome sizable portion of that group has been unlocked,\u201d said Pat Gallagher, president of sales, marketing and service at <\/strong>NetJets. \u201cBut the demographics aren\u2019t any different than our existing customers. No one is stretching to fly privately. It\u2019s people who didn\u2019t think they needed to fly privately before.\u201d<\/p>\n

The motivations for people with great wealth to switch from first-class commercial flights are not surprising. Convenience is one. Walking out to your plane is easier, safer and less stressful than dealing with airport lines. And there are no fights over wearing a mask on a private jet.<\/p>\n

\u201cWe have 85 jets, and if I had double or triple that number, I wouldn\u2019t have enough because of the demand,\u201d said Jim Segrave, owner and chairman of flyExclusive.<\/p>\n

\u201cEveryone is concerned about how we will deliver through the holidays,\u201d Mr. Segrave said. \u201cCome Thanksgiving, there aren\u2019t going to be any planes available. You may not be able to find a plane unless you\u2019ve already booked one, or it will be outrageously expensive.\u201d<\/p>\n

The industry was not prepared for this increase in demand. Short of buying your own jet, which can cost $60 million or more for a new, top-of-the-line model, there are several common options: Charter a plane when needed, buy a jet card with prepaid hours on it, or buy a fraction of a jet. Each is under strain right now.<\/p>\n

The charter market works like a beach rental. You go through a broker who sources the planes for you. Prices depend on where you're going and when.<\/p>\n

What\u2019s causing problems are jet cancellations. \u201cMost of these jet cards, if the operator cancels it because of a mechanical issue, they guarantee you a replacement aircraft at no cost,\u201d Mr. Gollan said. But if the jet operator cancels because it doesn\u2019t have a jet, he said, \u201cyour broker could say, \u2018Sorry we lost this plane, but we have three new quotes.\u2019 Instead of paying $18,000 to go up to New York, you could pay $28,000.\u201d<\/p>\n

Your choice at that point? Get a refund and fly commercial or pay the extra and go.<\/p>\n

\u201cJet operators have been inundated with requests,\u201d said Gregg Brunson-Pitts, founder and president of Advanced Aviation, a boutique jet broker. \u201cWe have had to be creative.\u201d<\/p>\n

Since the lockdown was loosened last year, charter prices are up 15 percent, but customers are not balking, Mr. Brunson-Pitts said. Yet in the rush to fly private, he said, would-be fliers needed to ensure that their broker is working with reputable jet owners who properly maintain the planes and train the pilots.<\/p>\n

Jet cards are supposed to provide more of a guarantee. Fliers have already paid hundreds of thousands of dollars for the hours and want the plane when they want it, usually on relatively short notice.<\/p>\n

But those, too, have been in high demand. Even higher prices didn\u2019t cool interest.<\/p>\n

\u201cAfter a couple of price increases that didn\u2019t slow down sales to a pace that we were comfortable with, we halted jet card sales altogether and went to a wait list,\u201d Mr. Gallagher of NetJets said. \u201cWe could have tested that price elasticity further, but I didn\u2019t want the perception of a money grab in a hot market. We saw how the demand was building in the summer.\u201d<\/p>\n

Kenny Dichter, chairman and chief executive of Wheels Up, another provider, said he didn\u2019t see the jet card market cooling. \u201cPeople are putting money down for travel into 2022,\u201d he said. \u201cThe demand we\u2019re seeing now is the result of the stubbornness of this Covid crisis.\u201d<\/p>\n

Even those who own fractions of a plane are under pressure because of delays in the production of new jets and the training of pilots and crew to fly them. NetJets has 100 planes on order now.<\/p>\n

And given the jet card demand, some of those fractionally owned jets are being used to service the jet card holders, said Peder von Harten, vice president of sales and marketing at Nicholas Air, which operates 35 jets.<\/p>\n

\u201cIt stinks for the consumer,\u201d he said. \u201cThat $1.4 million you spent upfront for that fraction is now going to have a residual value or $800,000. Or the company really used it more than you wanted to and that value is $500,000.\u201d<\/p>\n

Throwing another wrench into private jet travel are countries\u2019 different Covid rules. \u201cIf you want to fly from Hong Kong to Dubai, you have to take into account different government restrictions,\u201d said Ian Moore, chief commercial officer of VistaJet, which runs an international fleet. \u201cIt\u2019s very complex in normal times. Covid has made it triply difficult.\u201d<\/p>\n

Plane maintenance, too, has been affected. Since the planes are being flown more, they\u2019re being serviced more often. But there aren\u2019t always enough parts or people to do the work because of how Covid has disrupted the global supply chain.<\/p>\n

\u201cIf you needed to get a replacement wheel to Cairo, you used to be able to get it in a couple of hours,\u201d Mr. Moore said. \u201cNow it takes seven to 10 days. So servicing that customer has become a lot more difficult.\u201d<\/p>\n

Even small delays can be a problem, Mr. Segrave of flyExclusive said. \u201cIt\u2019s not that we can\u2019t get the service,\u201d he said. \u201cIt\u2019s \u2018We can get to you, but it\u2019s going to be three to four days.\u2019 Three to four days on an aircraft that flies 100 hours a month is an eternity.\u201d<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Even people who can normally afford to<\/p>\n","protected":false},"author":3,"featured_media":140420,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"\nPrivate Jet Market Grapples With Surge in Get-Me-Away Demand - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/business\/private-jet-market-grapples-with-surge-in-get-me-away-demand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Private Jet Market Grapples With Surge in Get-Me-Away Demand - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"Even people who can normally afford to\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/business\/private-jet-market-grapples-with-surge-in-get-me-away-demand\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-10-01T13:42:33+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/10\/Private-Jet-Market-Grapples-With-Surge-in-Get-Me-Away-Demand.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/business\/private-jet-market-grapples-with-surge-in-get-me-away-demand\/\",\"url\":\"https:\/\/precoinnews.com\/business\/private-jet-market-grapples-with-surge-in-get-me-away-demand\/\",\"name\":\"Private Jet Market Grapples With Surge in Get-Me-Away Demand - 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