Flying in a private jet isn’t just for the elite anymore.
For
that, you can thank a new class of companies that are trying to bridge
the gap between premium commercial flights and private jets.
Such
membership-based services pitch themselves as both less expensive than
other private jet options and a better alternative to commercial
airlines. Most follow a business model of flying smaller planes smaller
distances.
Dallas has become one of the hottest battlegrounds for the services.
Rise,
Dallas’ first home-grown private jet club, is offering all-you-can-fly
service for a monthly fee. It plans to start scheduled flights on Jan.
12 from Dallas Love Field.
This month, New York-based startup Wheels Up began on-demand regional flights from Dallas.
California-based
Surf Air, led by former Frontier Airlines chief executive Jeff Potter,
is looking to expand to Dallas as soon as next year. Other companies
promise to fly members anywhere.
They all agree Dallas is the
perfect market: It has long distances between cities that make driving
tough, an affluent population, and oil and ranching executives who
travel a lot to out-of-the-way places.
Travelers can reserve a
seat on a private plane for as low as $1,650 a month with no long-term
contract vs. paying thousands of dollars to charter a jet or buy a share
of a jet (called fractional ownership) for six figures up to millions
of dollars.
Think head of a family-owned business, not Microsoft founder Bill Gates.
Room to grow
The
private jet business suffered during the last recession through 2011 as
consumers — even wealthy ones — cut back on luxury items. As business
rebounds, more affordable options are taking off. Experts say there’s
plenty of room for growth.
Private jet clubs claim to cut in half
commercial airline travel time while offering VIP-type treatment such
as catering, Wi-Fi and valet car services. Members can fly on their own
schedule without airport congestion and long security lines.
Two of the newest players in the Texas market — Rise and Wheels Up — say demand has exceeded expectations.
“We’re going like gangbusters,” said Luke Thigpen, vice president of sales for 1-year-old Wheels Up.
By
year’s end, Wheels Up CEO Kenny Dichter expects to have more than 1,000
members, with 10 percent of those in Texas. Dichter created the 25-hour
fractional jet card — like a prepaid debit card for private flying
hours — at Marquis Jet.
The company charges a one-time initiation
fee of $15,750 and annual dues of $7,250 for an individual or family.
Corporate membership costs more. Fliers also must pay thousands of
dollars for each hour flown.
Wheels Up has two employees and two
planes in Dallas to focus on trips up to four hours. The company has big
growth plans, with an exclusive order for 35 Beechcraft King Air 350i
planes and an option for 70 more.
A nine-seat Cessna Citation
560XL jet used by Wheels Up in Dallas still has that new plane smell. It
has a plush taupe carpet, creamy leather seats that swivel, and glossy
wood veneer cabinets.
Much of the jet membership demand in Texas
is from business people and is mostly related to the energy industry.
But jet clubs also see corporations supplementing their corporate
fleets, small businesses and families.
Earlier this month,
Charlie McKinney of Dallas used Wheels Up to fly himself and five
friends to a Pearl Jam concert in Memphis, Tenn.
“I love their service,” he said. “The planes are brand new and they have their own inventory. The seats are really nice.”
McKinney,
who has chartered planes and had a fractional jet card, thinks Wheels
Up is more affordable. The big Dallas Mavericks fan expects to use
Wheels Up once a month, mainly to attend away games.
“This is the
next-generation country club,” said Rise CEO Nick Kennedy, a Dallas
serial entrepreneur in the medical technology industry.
Rise is selling 100 “founding memberships” in Dallas and Houston; Kennedy said those will be sold out by year’s end.
The
startup initially will fly weekdays between Dallas and Houston with
plans to expand to Austin, Midland, Oklahoma City and other regional
spots. It also will offer “Fun Flights” on weekends starting with Las
Vegas and Vail, Colo.
Members will fly at scheduled times just
like on a commercial airline on two refurbished eight-seat Beechcraft
King Air 350 turboprops. Rise has retained Addison-based Monarch Air to
provide and manage the planes and crews, but all of the travel
arrangements will be made through Rise’s mobile app or website.
Like a shared taxi
Scott
Liston, executive vice president of business development for aviation
research group Argus International, likens the latest business model to a
shared taxi concept. Success depends on a competitive price, quality
product, safety and service, he said.
Rise aims to be the
low-cost leader in this niche market. Its members pay an initiation fee
of $750 and one of three membership options ranging from $1,650 to
$2,650 a month for private flying rights.
As a flier who logged 2
million airline miles in the last decade, Rise’s Kennedy has
experienced hassles, delays and cramped seating on commercial flights.
After flying on someone’s private jet, he thought there must be a way to
share the swank experience at a more modest price.
“It costs
less than a jet or fractional card, but it’s still a couple of thousand
dollars,” Kennedy said. But “if you fly four times on Southwest
Airlines, you’ve paid for our lowest-cost membership.”
Rise will
compete on price with two California-based companies — Surf Air and
JetSuite. (Rise’s executive chairman, Wade Eyerly, is co-founder and
former CEO of Surf Air.)
JetSuite, which expanded to Texas in
2011, offers several on-demand flying options to more than 2,000
airports coast to coast. It owns 20 planes and employs its own pilots.
The
company’s website recently offered a flight from Dallas Love Field to
Midland with a week’s notice for $5,000 with no upfront fees or
membership. It also offers discounted hourly fees for members who
deposit from $50,000 to $400,000 into an account and it promotes daily
online deals to fill seats.
“We doubled business every year for
the first four years,” said JetSuite CEO Alex Wilcox, who helped start
low-cost commercial airline JetBlue Airways. “People are voting with
their pocketbooks. We think our service holds up in terms of value and
overall bang for the buck.”
JetSuite has thousands of customers and nearly 1,000 members, with 100 to 200 members in Texas, Wilcox said.
Surf Air’s more than 1,000 members pay a one-time initiation fee of $1,000 and monthly dues of $1,750.
The
company began flying last year to seven California cities and Las Vegas
and could expand to Texas next spring, Potter said. He’s already taken
several scouting trips to Dallas.
Industry churn
Dallas
aviation consultant Mike Chase isn’t sure where jet clubs are getting
their members. Clubs may be getting some airline first-class and
business-class fliers, but he attributes much of it to churn within the
broader private jet industry.
“If you’re a millionaire or a
billionaire, it makes sense,” Chase said. Private flying still is
largely an exclusive club, he said.
For Jason Boso, owner of Dallas-based Twisted Root Burger Co., it’s all about saving time.
He
travels to restaurants in Austin, Lubbock and Shreveport, La., at least
once a month and often for just a day, so commercial flight delays can
be costly. His said his Rise membership offers more scheduling
flexibility and eliminates delays and other inconveniences on commercial
flights.
“I need to fly much more often to local cities in Texas
and surrounding places, and Nick’s talking about growing his flights,”
Boso said. “If I could save an hour or so, that’s great.”
Story and photos: http://www.dallasnews.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment