The all-too-brief experience came courtesy of San Francisco's XOJet, the third largest private jet company in the nation, which, like its competitors at SFO, was having an especially busy week with top executives flying in for the JPMorgan health conference in town, and deep-pocketed locals heading to the 49ers-Seahawks game in Seattle in comfort and privacy.
"It's just nuts," said an XO Jet pilot, surveying the dozens of private jets on the tarmac at SFO's Signature Aviation Terminal the day the JPMorgan conference opened at the Westin St. Francis.
Business in the $14 billion market is certainly a whole lot better than the dark days of what XOJet CEO Bradford Stewart called "the Lehman bust," referring to the collapse of Lehman Bros. in 2008, after which numerous private carriers went under or fell into the hands of better-financed players. XO Jet, then a small, 2-year-old startup, escaped that fate largely thanks to infusions from TPG Capital and IPIC, an Abu Dhabi sovereign wealth fund. "Our business really started, or restarted, in 2010," said Stewart.
Last year, the Brisbane company recorded $350 million in revenue, and has tripled its net profit over the past two years (the private company wouldn't disclose the figure). Over 5,000 clients, many of them heavy users, have flown one of XOJet's approximately 50 owned and operated jets from its hubs at SFO, Van Nuys Airport in Los Angeles, and Teterboro Airport in New Jersey.
Respecting privacy
No names disclosed - "we need to respect our clients' desire for a private experience," the company said - but increasing numbers come from the San Francisco-Silicon Valley corridor, and they all have at least one thing in common.
"They need to have at least $40-$50 million in assets before consuming our product," said Stewart, 37, a former McKinsey & Co. consultant and a senior investment executive at Parthenon Capital Partners, a private equity firm with offices in San Francisco and Boston.
There are more than 17,000 private jets worldwide, 70 percent of them in North America, according to a 2012 report by Corporate Jet Investor. Business customers account for close to half of the industry's revenue, mostly from U.S. routes. XOJet's clients are 70 percent business customers, said Stewart. The six- to eight-seat jets ferry at high speeds "CEOs and his or her team," entertainers and their entourages - who aren't always on their best behavior - and families wealthy enough to fly by private plane to vacation destinations.
It goes without saying, it's not for everyone.
"To be honest, you have to be ultra-high-net worth to consistently fly private," Stewart said.
Not so, say recent entrants who are pitching private jet travel for the price of standard first class. Like BlackJet, which offered individual seats purchased via mobile app for $3,500, in addition to a $2,500 membership fee. Lead investor: Uber co-founder Garrett Camp, out to do for private aviation what he's done for private taxis. Unfortunately BlackJet, whose other investors include A-list Hollywood celebs such as Jay Z and Ashton Kutcher, fired most of its staff late last year. No mention of BlackJet on Camp's LinkedIn page when I checked Thursday.
Other would-be "jet sharing" enterprises haven't done much better breaking out of the box. "You can't fly somebody for $3,500 coast-to-coast and guarantee them a seat when it costs you $20,000 to fly the plane, which were often empty, an anonymous former BlackJet employee told Valleywag. "And if you had eight people on the flight, nobody was happy and it was crowded."
Source: http://www.sfgate.com
XOJet CEO Brad Stewart walks to one of his company's Citation X jets at San Francisco International Airport.
Photo: Sarah Rice
The Chronicle
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