Why corporate travelers and wealthy flyers look to partially owned private jets

“For most people who own their planes, I argue that it doesn’t really make any financial sense to them,” says Patrick Gallagher, president of Netjets.

To invite corporate clients flying privately and great travelers in Networth, NetJet sells fractional ownership and pools buyers to grant reliable access to private jets for travel while sharing costs for maintenance staff salaries, insurance, hangar rent and other expenses.

The business model was so appealing to investor Warren Buffett that he used the company’s services for three years and then he entered the multinational conglomerate. Berkshire Hathaway I bought an online jet 1998. Today, Netjets operates over 1,000 aircraft, becoming one of the world’s largest airlines and is now a fleet-sized airline.

Private jet travel experienced a significant increase in demand as the pandemic settled. Revenge trip.

“In my opinion, the airline has lost top-notch passengers, except for some of the international airlines,” says Janine K. Inarelli, founder and president of Palion, an aviation consulting firm. These passengers are now flying more and more privately, Inarelli adds, adding that they “were mostly on fractional shares.”

The industry has slowed down over the past two years, but private jet travel is still in place Beyond pre-pandemic levels. Fractional ownership continues to gain market share across the private jet market. Last year, international departures for fractional-owned aircraft increased by 11% since 2023, easily surpassing the industry’s overall 0.2% decline, according to WingX, the aviation industry’s data analytics provider.

“Company users are selling their planes and moving towards solutions like netjets,” says Gallagher, who includes more than 40 customers in the Fortune 100 business.

Gallagher and his industry buddies cite 2020, saying there are many gaps for private plane operators to chase study Published by Consulting Giant McKinsey It showed that 93% of individuals who could afford to fly privately do not.

With around 5,000 US airports serving civil aviation today, another advantage of civil aviation is that it is more convenient for travelers than commercial airlines that have access to nearly 500 airports in comparison. “If you find that civil aviation users save a tremendous amount of time, whether in the air or on the ground, they’re selling them individually,” Iannarelli says.

NetJets offers customers two different passes to fly privately. The price of fractional ownership depends on many variables, but always includes a one-off investment in the “share” of the aircraft. For example, if an individual or company buys one-tenth of a $16 million plane, it costs $1 million. Additionally, annual operating costs include a flight invoice of approximately $325,000, covering fuel and ground maintenance. NetJets fractional ownership package covers 50 hours of travel per year and offers the option to buy more if needed.

The company’s jet card program allows private travel to be more affordable, starting at around $215,000 a year for a 25-hour trip. Still, there are restrictions on the jet cards sold at NetJets and other places. Not all aircraft in the NetJet Fleet are available to jet card holders and private jet flights cannot be booked on busy holidays.

FlexJet, a fractional jet operator with a fleet of around 325 planes, has purchased 182 additional business jets from Brazilian aerospace manufacturer Embraer SA for $7 billion in response to rising demand. “I think our human nature is wired to embrace all business,” says FlexJet CEO Michael Silvestro of his growth strategy. “But in our case, we were very disciplined to ensure we could handle newcomers who wanted to fly with us.”

Flexjet says it sets it apart from its rivals by relying on non-unionized pilots. This is a strategy that allows the company to assign small crews to individual aircraft. The company also offers a more luxurious experience to train cabin crews to build hospitality skills, curate wine selections, local cuisine and create flower arrangements. “This provides a very enhanced level of more intimate service that we can provide to our clients,” Silvestro said. The interior of the plane itself comes with a bespoke theme decorated in the style of Bentley’s luxury cars and Ferretti’s Glue Yacht.

Some private operators of the space distinguish them by offering flights as well as a complete itinerary for leisure trips, including hotel bookings, book restaurant hotspots and excursions.

Capital One’s Velocity Black has been offering civil aviation since 2020 as part of its full suite of digital concierge services. “We see a lot of US members coming to Europe for their summer trips,” Steph says. WestlakeVice President and Civil Aviation Director at Velocity Black. She says it’s very strong for European destinations along the Mediterranean, especially cities that include Santorini, Cannes and Saint-Tropez.

According to Westlake, the company has an in-house team of experts to help customers book flights. She says the total transaction value of civil airline bookings using Velocity Black increased by 60% from 2023 to last year. “We’ve seen a significant increase across civil aviation overall, and it continues to grow strongly within the speed black range,” Westlake says.

Public wheel up has different innovative business models. With a $8,500 annual membership, flyers have access to a fleet of 150 civil aircraft companies, with discounts or dynamic fees on those planes. Another membership allows flyers to charter flights with a network of wheel-up private jet partners.

The third offer that allows clients to wheel up is collaboration with Delta Air Lines This will be on sale this summer. Passengers booking their first foot on a trip in one seat in the airline’s business cabin Delta can book a second private plane that is difficult to reach any of the five European cities of Eisen, Barcelona, ​​Napoli, Nice or Rome, then a destination like Mykonos or Ibiza.

“Looking back at the beginning of aviation, private and commercials have always been completely separate,” says CEO George Mattson. “No one ever tried to integrate them into one product.”

Mattson previously served on the Delta board for 11 years and was CEO of Wheels for the past 18 months. The companies are closely connected through 40% ownership in Delta’s private jet operators. Mattson says it fits the commercial airline’s strategy to create a more premium and convenient experience for travelers.

“Want to get out of the Delta, go down the stairs, get in your car, have clear security and get on the plane that you’re waiting for when you arrive, not six hours later?” I asked Mattson, explaining his pitch to my client. “What is the value? I think it has a lot of value for some people.”