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In the last 24 hours, two of the key players on the consumer solutions side of private aviation each made significant moves, both of which may change the way you buy private jet travel in the future.
Yesterday, PrivateFly, part of Kenn Ricci’s Directional Aviation group since last September, announced it was rolling out fixed-rates during the summer for one-way flights between New York and airports serving Los Angeles and the San Francisco Bay Air for a flat $29,000 each way.
It follows a test last winter between London and Geneva and then a more extensive offering of 16 routes mainly from London and Paris to key summer destinations, but also between Rome and Milan as well as from Moscow to Geneva and Nice.
For Ricci, who also controls Flexjet, which ranks second behind NetJets in the space of fractional shares and leases, and Sentient Jet, a leader in jet card segment, it marks the expansion of a new product that fits somewhere between on-demand charter and jet cards. Earlier this month, it also launched a new program selling shares on its Gulfstream G650 fleet by days instead of hours, converting a traditional 200 hours per quarter share to an increment of 75 days.
Flohr’s next move
Early this morning, Thomas Flohr’s Dubai-based VistaGlobal said it was combining its newly acquired JetSmarter and XOJET brands into a new entity, XO, carrying the tagline “powered by JetSmarter technology.”
Flohr, who says the worldwide charter market drives $11 billion in annual sales, plans to use the new FlyXO.com platform alongside VistaJet to pitch his portfolio of asset light solutions, including customers onto partner fleets.
The new website enables users to book single seats on shared flights, book flights and then sell off seats they don’t need, get quotes for on-demand, full aircraft charters and also buy Instant Booking flights, the latter being sold much like many jet cards, on a cabin category basis, instead of a specific aircraft type. PrivateFly’s City Pairs product provides specific aircraft types.
Back to XO, much of the new site is a combination of content that previously existed on the JetSmarter and XOJET websites. For example, there is a detailed overview of the three XO jet card programs: Select Access, Signature Access, and Elite Access.
Top tier XO program members now get benefits previously associated with JetSmarter products, including a rate cap of $600 per seat per hour on crowdsourced flights, the ability to select seats in advance as well as the ability to book seats on shared flights for non-members.
XO jet card members can share seats they don’t need
What’s new…and a big deal is XO program members can use their deposits to buy both single seats on shared flights as well as for Instant Booking flights. In other words, they can price shop against their jet card rates, using the rates and program that provides the most advantages for each trip. For example, while a jet card rate may be higher on a per hour basis for some trips, it might include deicing, better cancelation terms, and guaranteed recovery from mechanicals, still making it a better fit.
In terms of what aircraft are available to book, Vista Global says it includes 116 super midsize, large cabin and ultra-long-haul jets from the VistaJet fleet and the former XOJET fleet, which is now operated by XOJET Aviation, LLC. Vista Global as a foreign-company can only hold a minority stake in its U.S. operator, not to be confused with the brand, now XO, which encompasses sales, marketing and technology.
According to its website, XO says it can offer over 3,000 private jets for on-demand charter, apparently mainly from the former XOJET’s inventory of aircraft operated by preferred partners who meet its sourcing criteria.
At the time of its sale to Vista Global, XOJET was believed to be generating over $100 million in off-fleet charter sales. While JetSmarter was largely known for its memberships that provided single seats on shared private flights, in June 2017 information it was showing to potential investors indicated it had generated $44 million in full charter sales in 2016, a jump from $24 million in 2015. At the time, it was projecting $83 million for 2017 increasing to $606 million for 2019.
That was before its stunning fall from billion dollar valuation to acquisition target, dogged by complaints about sales tactics and how it handled member complaints which led to my article on Forbes.com “Trying to make sense of the troubles at JetSmarter“ in August 2018 and CNBC’s January 2019 report titled “Tailspin.”
An agreement that would see it pay over $6 million as part of a class arbitration settlement is pending.
In moving the JetSmarter brand to the side, Vista Global can take the online broker’s technology and apply it across its assets, increasing booking and utilization of the VistaJet fleet.
At the same time, by parking the JET part of XOJET, it loses a brand that was highly regarded for both safety and service. Each website had also developed a significant presence with online search engines, which today have become the storefront of private aviation providers.
For Ricci, taking the fixed flight rates to the U.S. possibly foreshadows what could be a hot aviation product. Virtually all on-demand charter, even if it includes getting quotes via an app, still requires a delay of hours to days to confirm the flight and final pricing, making sure aircraft and crews will be both be available and handling numerous logistics.
Being able to know the exact cost of your flight in advance provides jet card-like one-way pricing which eliminates ferry fees while eschewing the need to deposit hundreds of thousands of dollars in advance. Alas, for now, it’s just two routes and only through the summer.
While JetSmarter’s and now XO’s Instant Booking prices guarantee the rate when you click to buy, they are based on dynamic pricing, so it varies by day, meaning you don’t know what the cost will be until you search and buy. Enabling XO jet card members to choose the best solution for each flight is a possible game changer.
While it’s at the beginning, both the new PrivateFly and XO products provide a possible glimpse into the future of what some of the new options for private aviation solutions might look like.
What’s next? Expect more moves. Earlier this month, Wheels Up, another player vying to stay in the top tier of the players said it acquired TMC Jets, bringing over 20 light jets to its existing King Air 350is, a turboprop, and Citation XLSs, a midsize jet, and its super-midsize Citation Xs.
June 27, 2019 at 02:26PM
Forbes – Entrepreneurs