Business as Usual at 30,000 Feet
“There is a digital revolution taking place at 30,000 feet that has transformed the business-aircraft cabin into a flying office with capabilities rivaling those of offices on the ground. With innovative technology and new applications, companies like Rockwell Collins are turning airborne communications and information technology into a high art. The cabin is a sophisticated business center aloft, offering a profusion of enhancements for communications, which allow wireless information sharing much as the office network does.
For example, Rockwell Collins’ latest eXchange™ system integrates high-speed Internet capability with global satellite communications, so you are truly plugged in at speeds rivaling those of DSL. You can surf the Internet, place a trade, view data on a secure server or delight in images of your week-old granddaughter as readily as you would from your home or home office. The new satellite broadband capability brings with it Internet-based phone service so you can talk to anyone, anytime, anywhere via computer, BlackBerry or Wi-Fi-enabled cell phones and, in the not-too-distant future, video-conferencing.
Want to get the latest news, catch up on weather, sports and financial markets, or just relax and watch TV? Rockwell Collins’ Airshow 21 Cabin Management System brings it to you live on large screens and individual displays, seamlessly integrating CD, DVD and MP3 inputs with multiregional direct broadcast satellite television and real-time moving maps. Currently available in larger-cabin aircraft, the scalable technology will soon enable live TV coverage in even the smallest jets. Any aircraft, however, including small turboprops, can gain the benefit of Airshow® 3-D high-definition moving map displays, cabin temperature and lighting controlled from any seat, plus a host of live text-based news and information from CNN, Bloomberg, Intellicast, ESPN and others.
Up front on the flight deck, with Rockwell Collins’ Pro Line Fusion™, equally exciting things are happening, allowing pilots to land more easily and safely at night and in challenging terrain or weather conditions. The latest technology significantly enhances the overall utility of the company airplane by making more flights to more places more practical. Synthetic Vision, for example, provides real-time, photo-realistic 3-D graphics of the terrain, enabling pilots to land as if they had clear skies even in darkness and the worst weather. The Enhanced Vision System (EVS) adds infrared sensing so that objects on the runway are clearly defined, even while the world outside is completely obscured.
Now, Rockwell Collins is taking another giant leap forward with its head-up display (HUD), which gives pilots the ultimate in situational awareness and enhanced safety. With the HUD, pilots can look directly outside and combine their visual image with the same data presented on the instrument panel LCD screens without having to shift focus.
For the traveler, this means you’ll be able to get to where you want, when you want, without any compromise on safety. Most important, the time aloft will be a much richer, more useful experience than ever before.
“[Business aviation] puts you back in control. It means
you can go when and where you need to with the utmost
efficiency. You can meet eye to eye, and that builds trust.”
Marc Miller, Aviation Manager, Texas-based retailer
Fractional ownership, the brainchild of NetJets founder Richard Santulli, has changed the face of business aviation like nothing else. Through this innovative idea, Santulli revolutionized travel by making business jet benefits more available and affordable. The flexibility and convenience of being able to buy just as much capability as you need has introduced more people and companies to the advantages of private air travel than anyone ever imagined.
With fractional ownership, you essentially buy time. You invest in a fraction of the aircraft of your choice based on the number of annual flight hours desired. For example, if your preferred jet sells for $8 million, 50 annual hours of use would cost only $500,000, imparting extraordinary financial leverage.
After the initial investment, owners pay monthly management fees and a fixed per-flight-hour charge, but only when actually aboard. There are no repositioning or empty-leg costs. And, instead of being limited to a single aircraft, you gain access to an entire fleet and the freedom to exchange hours for larger or smaller aircraft or use multiple planes at any time. You also gain all the tax benefits of ownership, but with none of the management headaches. Wherever you find yourself at any of 5,000 locales across the nation or beyond, your plane is just a phone call away.
If your requirements are more modest, then a jet card, with many of the same benefits, might fit your budget and your needs with greater ease. Jet cards uniquely combine the no-commitment, pay-as-you-go benefits of charter with the one-way pricing, consistency and safety of fractional ownership. One card, one payment, one call and your plane is guaranteed anytime, anywhere.
Sold in fixed-dollar or hourly denominations, jet cards work much like a prepaid phone card. One type is offered through the major fractional ownership providers and the other uses the nation’s premier charter aircraft. Because both card varieties are backed by the world’s most elite business aircraft providers, travelers are guaranteed the highest levels of safety, quality and consistency of service.
“The flexibility of having our own plane enables us to go whenever we need on short notice,
meet customers, deal with bankers or investigate potential opportunities.”
Bernt Bodal, Chairman and CEO, American Seafoods Inc.
Backed by Berkshire Hathaway, NetJets, which pioneered the fractional ownership idea, remains the largest provider with the broadest global coverage and the most diverse fleet of aircraft and owners. Its U.S. and international fleet boasts more than 700 jets representing 18 different aircraft types, from small-cabin Cessna jets to the 18-seat Boeing BBJ.
As the only fractional provider with independent fleets based in Europe and the Middle East, NetJets is uniquely equipped to accommodate today’s global businesses. That’s a distinct advantage for U.S. owners, who can step off a commercial flight in London or Dubai and continue their trip on a NetJets aircraft. The same is true for NetJets owners abroad who are coming to the U.S.
In addition, NetJets removed ferrying fees between the U.S. and Europe, so one can fly direct with greater ease. In Europe, the company also offers Private and Corporate Jet Cards similar to the Marquis Jet Card in the U.S.
A performance management consultant with some time-critical problems bought 50 hours of annual flight time with NetJets, and now he is making the most of every minute.
For important client meetings with major corporations or government entities, he can move as many as 12 people along with oversize presentation materials, make multiple stops in one day and still be home that evening. The benefits are far greater than just getting there, he says. Often, it’s the time on the plane that is most valuable. When traveling with key clients or prospects to meetings and conferences, he says, “the plane gives us face-to-face access to people we may not be able to spend time with normally.” Such opportunity is golden.
Marquis Jet created even easier access to NetJets benefits by offering 25-hour increments without any ownership commitment and with only a minimal up-front obligation. Marquis Jet Cards are available for single aircraft, while combo cards enable cardholders to split hours between two different jets. Marquis Jet Card holders also enjoy the same access to the NetJets Europe and Middle East fleet as fractional owners.
“Those guys sitting on that airliner are basically wasting time. If we did not have the plane,
our sales probably would have been 10% lower than they are today.”
Tom Klein, President, Klein Tools
Owned by global aerospace giant Bombardier, Flexjet offers exclusive fractional shares in Bombardier Learjet and Challenger aircraft. In addition, as part of the Bombardier family, Flexjet is well positioned to recommend a broad array of creative business travel options including on-demand charter, jet cards, fractional shares and whole aircraft ownership. Often, buyers need a combination solution because a single option may not fit their needs 100% of the time, says Flexjet President Fred Reid. Corporations with existing aircraft fleets and individual buyers alike are turning to Flexjet to fulfill unique needs with the array of mix-and-match possibilities. This customized holistic approach has become Flexjet’s hallmark.
Currently, fractional shares are available in six aircraft types ranging from the small-cabin Learjet 40XR and 45XR to the midsize Learjet 60XR, the larger Challenger 300 and the intercontinental-range Challenger 605. Flexjet is also the launch customer for Bombardier’s newest all-composite super-midsize Learjet 85, which will be available in 2013.
Numerous unique fractional ownership features underscore Flexjet’s inherent ability to tailor a program to suit individual owner needs, such as intermediate share sizes and contract terms ranging from two to seven years, says Reid. “Versatility Plus” allows owners to buy additional hours as needed in the same or other aircraft or sell unused hours at any time in order to precisely adjust their year-to-year requirements. Another special Flexjet feature is “Anytime Options,” which allows owners to purchase additional guaranteed use of larger or smaller aircraft or multiple aircraft per day and gain cost savings on flights under an hour long.
Traditionally, fractional travel has been based on one-way flights, but Flexjet introduced Round-Trip Pricing, which provides a generous discount on one- or two-day round trips for owners committed to at least 100 flight hours per year. In addition, ferry fees are waived for flights between the U.S. and Latin America, Canada or the Caribbean, and on Challenger aircraft to or from Europe or Hawaii.
The “Walk Away Lease” program, with contract terms of two, three or four years, has been particularly popular during this period of financial uncertainty, notes Reid. It offers all the benefits of fractional ownership, plus it has an option to exit the program with only 90 days’ notice.
“Flexjet One” whole aircraft ownership and management is yet another distinctive option that allows an owner to buy a whole airplane, receive the full tax benefits of the purchase, have it completely managed by Flexjet and gain revenue when it is utilized as part of the Flexjet 25 Card fleet. The advantage is a dramatic reduction in ownership costs. In addition, the owner gains significant fractional ownership benefits such as larger or smaller aircraft as needed.
The Flexjet 25 Card is equally unique. It is offered in any of five Flexjet aircraft in 25-, 30- and 35-hour increments. Three different pricing options apply to each card based on the number of peak travel days desired per year. Buyers can also combine hours in two aircraft types for greater flexibility, and a split payment plan is available where one pays half the total up front and the balance later.
FLIGHT LOG >> Domaine Serene Vineyards
On the rolling Dundee hillsides of Oregon’s Northern Willamette Valley are the Domaine Serene Vineyards, an award-winning winery specializing in Pinot Noirs and Chardonnays.
While Domaine Serene is a two-hour drive from the nearest commercial airport in Portland, owners Ken and Grace Evenstad feel no isolation. Access to the winery’s U.S. and international markets is but ten minutes down the road at McMinnville Airport, where Ken Evenstad can board his fractionally owned Flexjet Challenger 300 and fly nonstop to meet with any of hundreds of wine distributors, buyers and business contacts nationwide, or supervise his other business and personal interests in Maple Grove, Minn., or Naples, Fla. The tremendous time savings and scheduling flexibility help him be more productive than he ever imagined possible.
Evenstad’s introduction to the world of business aviation was aboard a friend’s aircraft. He realized that it was a perfect formula for creating time—something that’s in short supply when you’re building a winery in Oregon and at the same time running a pharmaceutical company in Minnesota. While he thought having a jet was a great idea, “I didn’t want the operational overhead of full ownership including crews and maintenance,” he recalls. Flexjet offered the perfect prescription.
Evenstad initially purchased a share in a midsize Learjet 60 and quickly added a share in a Challenger 300 for its wide-body comfort and extended range, an important benefit on the “corner-to-corner” flights from Florida to Oregon. On those legs, he points out, cabin spaciousness gains significance, particularly with many passengers aboard. Impressed with the Challenger’s excellent field performance, speed and economy, he decided to upgrade to a second Challenger 300.
While his travel needs ebb and flow, he gained the ultimate in flexibility with Flexjet’s Versatility Plus program, so now he can purchase extra hours in any aircraft if he needs to or sell back time if he doesn’t. “Not only do I save many, many hours of valuable time, but there are important health benefits,” he says. “It’s hassle free.” That means he can continue to work and still enjoy it, he says. “How do you put a price on that?”
Arguably one of the most unique fractional ownership companies, Avantair is the exclusive provider of fractional shares in the Piaggio Avanti twin turboprop. The company rocketed to success with Chief Executive Officer and Founder Steven Santo’s maverick approach. With its avant-garde design, the Avanti features a stand-up cabin as large as that of a midsize jet, speeds faster than those of many light jets, and the ability to climb well above weather to 41,000 feet, all with fuel-sipping efficiency. Add to that short-field performance enabling access to hundreds of airfields that are inaccessible to larger jets, plus ample range to fly halfway across the nation, and it’s no wonder the Avanti is a big hit.
It all adds up to high performance at low cost, which has been fundamental to Avantair’s success so far in this challenging year. “We’ve had record sales, and we’re adding airplanes,” says Santo.
Santo’s pioneering approach introduced a single-price monthly billing plan, which simplified budgeting and eliminated some of the annoying complexities of fractional ownership. Avantair also launched its “Axis Club Membership,” which bridges the gap between its “Edge” card—available in 15- or 25-hour versions—and fractional ownership.
For a one-time fee, Axis Club Members gain the opportunity to purchase 25-hour blocks of Avanti flight time at hourly rates significantly lower than those of the Edge card, and actually approaching the cost of fractional pricing. Depending on which of the three plans are chosen, members can buy a specific number of blocks over a three-year membership term. According to Santo, the program is enormously popular.
“People are searching for value,” says Santo. “They can get everything they want and they don’t have to pay an arm and a leg to get it. That’s not going to change for a long time.”
“The real value of business aviation is that it’s very much
a tool that forces efficiencies and generates productivity.”
Ed Bolen, President and CEO, National Business Aviation Association
FLIGHT LOG >> VideoPropulsion Interactive Television, Inc.
Switch on the digital TV in nearly any hotel room across North America and chances are Slinger, Wis.-based VideoPropulsion Interactive Television, Inc., supplies the equipment that made that HD image possible.
As VideoPropulsion’s chairman, chief executive officer and chief scientist, Carl Pick’s specialty is coming up with great ideas. “We’re able to sell very high-value products because we solve problems for which there aren’t solutions,” says Pick. Accomplishing this task has meant meeting with customers directly. Pick’s problem was that his customers weren’t nearby, and most, like LodgeNet in Sioux Falls, S.D., were very hard to reach. “A lot of those places will be five minutes from a 4,000-foot runway, but they’re an hour and a half from a commercial airport,” he notes.
His face-to-face strategy eventually led to a fractional share in an Avantair Piaggio Avanti, which he uses regularly when it makes the most sense, landing at all those once-hard-to-reach places in only an hour or two. “I was face-to-face with this guy, and as a result I sold him a piece of equipment that cost more than the trip,” he says. “I decided the more I can be in front of the customer, the better.” Pick’s hunch is paying off. “We have just had what amounts to unprecedented growth in North America. I bought a 50-hour share and decided it wasn’t enough, so I’m adding another 50 hours. Financially, it is terrific.”
Pick rattles off weeklong itineraries at the speed of streaming video, and Avantair handles them with ease, sometimes covering 12 destinations in five days. Pick particularly likes the Avanti’s large cabin, which he compares to that of a midsize jet. For Pick, who is 6'3", cabin height and comfort were key deciding factors, since he typically travels with four or five others. Not only does the Avanti fit the need, it also provides access to places many jets can’t reach. “That makes a big difference to me,” he says. “I don’t know how I could physically take the amount of commercial travel that we are talking about. I’m just able to do a lot more.“
By blending the safety and guaranteed availability of fractional ownership together with no long-term investment and the no-financial-risk simplicity of charter, jet card pioneer Sentient made business jet travel more accessible and affordable than ever before.
Sentient Members prepay for future travel and are charged only for the hours they fly. Each trip is debited from their account based on fixed hourly rates for one-way travel. Unlike charter, there are no empty-leg or repositioning charges. Funds on deposit never expire and unused balances are fully refundable. In addition, discounts apply for qualifying round trips.
With as little as ten hours’ notice, Members can book guaranteed flights in four specific aircraft categories ranging from small-cabin and midsize to super-midsize and large-cabin jets. In addition, members can choose from “preferred category” newer aircraft at slightly higher prices or “select category” value-priced, slightly older aircraft.
“In any type of financial turmoil, opportunities emerge, and that’s when companies
with vision, foresight and agility can change their fortunes dramatically for the better.”
Fred Reid, CEO, Flexjet
For those who prefer specific aircraft types and have well-defined requirements, Sentient recently launched the “Membership Plus” program, which allows Members to select from three popular, individually priced models for any trip, including the Hawker 400XP, Cessna Citation Excel or Citation X. “Plus” Members can also select aircraft by size category, in which case a 10% discount applies to published hourly rates. “Plus Memberships” carry a $150,000 purchase price, the balance is nonrefundable, and cards expire in two years. The price equates to about 15 annual hours depending on the aircraft flown, and on average, Members use their card balance within nine months or less.
Safety has been the cornerstone and primary focus of Sentient’s flight plan from the onset. As a charter “super broker,” Sentient took an unprecedented step forward in appointing an in-house chief safety officer and an independent safety advisory board, which is comprised of aviation safety experts and former top officials from the Federal Aviation Administration (FAA) and National Transportation Safety Board (NTSB). Their job is to review safety policies and procedures, as well as pilot standards, and develop rigorous requirements for selecting certified charter operators. Fewer than 25% of the more than 550 charter jet operators in the U.S. have passed the certification process. Those that have represent the most highly qualified operators in the country.
“We want to be certain that we are working with people who represent the highest commitment to safety,” says Sentient Chief Executive Officer Steven Hankin. In doing so, he brings uniformity to the charter market, together with incomparable safety standards and professional service.
FLIGHT LOG >> A Retired Oil and Gas Company Executive
Retirement means many things. For some it’s time to wind down, and for others, like this retired Texas oil and gas company executive and active investor, it means frequent travel both nationwide and abroad in pursuit of investment opportunities. Although he has full-time access to a Dassault Falcon 50EX, which he uses primarily for long-range and international trips, he turned to Sentient’s Jet Membership program for much-needed flexibility, depending on how many people would be traveling and where they would be going, to choose the perfect aircraft for frequent one-way flights. By eliminating the need for a major capital investment in a fractional share or another aircraft, he can stay focused on business opportunities and simply pay for jet travel with the ease of using a prepaid gift card.
As a sophisticated buyer, he liked the fact that Sentient worked exclusively through a cadre of the nation’s top charter companies that subscribe to the industry’s most stringent safety and performance standards. Now he’s flying with Sentient 50 to 75 hours annually. “The card allows me to pick up the phone and book the most suitable Sentient aircraft easily,” he says. Travel for him no longer includes unproductive days on either end of an airline flight. “With Sentient, a three-day trip is just that, and that value is really what we’re looking for today,” he says. “The card allows us to downsize when we want to do it, and that’s really what fills our needs.”
From industry giants to independent firms, companies and individuals are realizing there is a real cost in not having access to a business aircraft. “How do you measure the efficiency of your people?” asks one company executive. “Do you congratulate yourself for saving $3,000 in travel costs after you’ve lost a $5 million contract?”
In an era where deals can be made or lost in the instant it takes to hit the send button, your time is increasingly not your own. As the mandates for doing global business at Internet speed intensify, so will the emphasis on fast, efficient travel, whether across the state or around the world.
“The real value of business aviation is that it’s very much a tool that forces efficiencies and generates productivity. Those are traits that are enormously valued in a challenging economic environment,” says Ed Bolen, president and chief executive officer of the National Business Aviation Association.
“In any type of financial turmoil, opportunities emerge, and that’s when companies with vision, foresight and agility can change their fortunes dramatically for the better,” adds Flexjet’s Fred Reid.
As the financial winds calm and the world reemerges to face a new economic landscape, business aircraft are again poised to present a completely new set of metrics. Distance will be measured in terms of productivity instead of miles. Cost will be calculated in efficiency rather than dollars. And time will be kept according to new opportunities instead of old airline schedules.
The sky is no longer the limit. The bottom line is no longer the bottom line, and as new aircraft models create unprecedented choice for both price point and performance, and new ways to access them continue to evolve, the future of business has nowhere to go but up. So fasten your seatbelts and prepare for takeoff to the tomorrow you have only begun to imagine.
Written and Produced by Mark Patiky - firstname.lastname@example.org | Associate Writer: David Wright | Principal Photography: Paul Bowen
Editor: Allison Lurker | Designers: Jon Prinsky, Taryn Sefecka
Forbes Custom is a custom publishing site that features
special advertising sections from Forbes magazine
as well as industry articles and videos from our partners.
The editors at Forbes were not involved in the creation of this content.
Site Developed by SmartMark Communications, LLC
© Forbes Magazine, All Rights Reserved