Flights of fancy

Private jets swoop down on unreliable airlines

Interior of private jet
Window and aisle? Source: Getty

After the financial crisis of 2008, the use of private jets nosedived. The media portrayed the preserve of the lucky few as an expensive and excessive luxury, one that cast the world’s executives and billionaires in a bad light. The heads of Detroit’s automakers flying to Washington to secure taxpayer-funded bailouts for their struggling firms was the last straw.

But 10 years after those turbulent days, private jets are back. With scheduled flight delays and cancellations now all too common and long lines at airport security checks a safe bet, businesses are increasingly seeing the advantages.

“It provides a tremendous flexibility, especially for business trips, where you don’t always know exactly how long you need to stay,” said Simon Ebert, of Air Hamburg Private Jets, which has a fleet of 24 business jets. “Airlines are not always reliable in this respect.”

Private jets have always been useful for reaching out-of-the-way places without the need for long transfers. This is one reason why many large firms used to maintain their own fleets. Nowadays, the number of such companies has dwindled. In Germany, only the likes of VW, BMW and the privately held Bosch still own their own aircraft.

Instead, charter services have boomed, especially when it comes to demand for short-haul high-traffic routes, for example those from German business centers to European capitals.

High class, not cattle class

For businesses, the math often stacks up. As bottlenecks and a lack of competition push up airfares, a chartered flight within Europe can almost compete with business-class air fares if a small group is travelling. Airfares for the short trip from Germany to Brussels or Geneva, for instance, can run to €500 per person, or €2,000 for four. This compares with €1,800 an hour for the smallest category of private jet. Other costs, such as airport fees, come on top of that.

“The market driver currently is the growth in the charter market,” said Christoph Kohler, managing director of WINGX Advance, a business aviation consultant. Flights in this category accounted for nearly 60 percent of departures in Europe in the year to June.

Europe-wide, private plane departures were up 3.3 percent in the 12 months to June, and in Germany, 4.1 percent. Flights within Europe were up 3.5 percent in the year to June, while private flights to North America were down 7.8 percent.

Air Hamburg Private Jets registered an increase of nearly 20 percent in departures in the first half, as well as an increase in flight hours. That has enabled the Hamburg-based company to order seven brand-new Embraer Legacy 650E jets so far this year.

Another factor in the boom is the recent introduction to the market of shared business flights. Under this model, broker companies charge a subscription fee that entitles members to a certain number of trips on already scheduled business flights. Members of US-based JetSmarter, for example, pay from $15,000 a year to gain access to its list of more than 150 US-domestic and international flights every day. Flights under three hours are free, while a seat on those over three hours costs $300. The firm recently started operating in Europe, where Air Hamburg Private Jets is a partner.

Even though growth in the sector has been healthy, the German Business Aviation Association had actually expected a bigger increase given the booming economy. “Companies are still cautious, though,” chief Andreas Mundsinger recently told the trade site Airliner.de.

Perhaps, though, the industry is yet to fully shed its elitist image. Mr. Mundsinger said many companies understand the advantages of a private plane, yet refrain from using them because it looks decadent.

Jens Koenen covers companies and markets for Handelsblatt in Frankfurt. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the author: koenen@handelsblatt.com.

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