Discounts are widening the audience for private jets

Every summer, New Jersey-based real estate investor Brenda Marino takes an elaborate European vacation, flying first class on the most convenient commercial carrier to explore a new destination. "I always request the best options for my family's travel, whether it's car service, a guide, or hotel," she says. This year, however, her trip will remain domestic – and instead of flying commercial, she'll be private jetting.

"I had never really thought about private air, since we live conveniently between so many international airports," Marino adds, "but since the onset of pandemic, we have been presented with quotes for private air which have been irresistible." Recently, that's meant connecting from her home in New Jersey to a beachside property in South Florida and to upstate New York to gather her child's belongings from college, all on private flights booked through her travel planner at Avenue Two Travel, Meredith Broder.

Marino isn't the only recent convert to private jets. As strict quarantine conditions have devastated the global airline business over the past 10 weeks, Broder has seen a surge in demand for private air transfers among her quiver of clients-people who normally opt for seats at the front of commercial planes. "What does one do if the person beside them on a commercial flight tells the flight attendant that they get claustrophobic wearing a face mask?" Broder asks, echoing her clients' concerns. Flying private doesn't require waiting in line for airport securing or boarding, either – both situations in which proper social distancing is nearly impossible.

With jet fares running about 20 per cent lower than average thanks to sharp dips in business travel demand and a host of other factors, switching from first class to private has become a more reasonable investment in health and safety. In some cases, travellers can score far deeper discounts – but doing so takes luck and a well-connected agent.

"Since mid-March we've seen a 400-500 per cent increase in private jet requests," says Michael Holtz of SmartFlyer, whose clients have largely been booking short-haul, two-hour trips within the US for about $US20,000 ($30,230) to $US40,000 – that's about $US3300 a seat on the low end, assuming six passengers are on board.

Jack Ezon, founder of Embark Beyond, has registered a similar spike. "Every single trip being organised, farther than a three-hour drive, has come with an earnest request for a private jet quote," he says. Currently, 90 per cent of the trips on his company's planning roster have a private jet attached, up from 10 per cent in analogous bookings last year.

At a time when pleasure travel has been brought to a near-standstill, these bookings are an encouraging – and critical – lifeline, both for agents and for hotels that are desperate to expand their business beyond a reasonable driving radius. They also signal a broader shift within the private aviation industry, which has long been dominated by corporate travel.

Private jet matchmaking

As first-time private jet inquiries started to take off in the coronavirus pandemic's early weeks, Broder devised a strategy to put this indulgence well within her clients' reach. Not quite an UberPool of the skies, her model is simple: Two family units with similar flight plans are introduced to each other, paired together on a private vessel, interviewed about their recent exposure, and asked to sign medical disclaimers and consents before departure.

In this scenario, two couples might share a small aircraft from New York to South Florida and split the cost evenly, rather than shouldering the cost alone. Broder has booked the discounted one-way flight, which would have cost $US18,000 last year, for as little as $US10,000 in the current market; her co-private model means each pair contributes $US5000. The difference in cost is dramatic, amounting to $US2500 a flyer instead of $US9000.

Of course, that's still significantly more than a round-trip business-class ticket on American Airlines, which now costs about $US500. (It usually costs at least double that.)

"I'm just responding to a sharp increase in demand. It's a service, not an opportunity," says Broder, who's noticed prices starting to rise back up as more agents get in on the same idea. "The smartest travellers should be calling their agent right now to lock this in," she adds.

Like Black Friday for private jets

Decreased demand from business travellers is only one factor dampening prices; even if that goes up, airfares will remain discounted thanks to a confluence of favourable conditions otherwise. Among them, jet fuel costs have declined since the start of the year, and the Cares Act, which provides COVID-19-related emergency relief, has removed the 7.5 per cent federal excise tax on domestic flights through to the end of 2020.

Perhaps even more significantly, private jet owners are incentivised to operate their aircraft at minimal (or no) profit margins. That's because their dominant client demographic – business travellers – is grounded for the long haul, and leaving a plane to sit in a hangar can be more expensive than flying it. "I think private jet owners want to keep their staff occupied and their planes in the air," Broder theorises. "Long-lasting lags mean requisite, and expensive, recertification for both the pilots and the hardware."

In general, expect to save several thousand dollars on a wide array of domestic flights. Although the market is fluid and ever-changing, Brooke Lavery, co-founder of Local Foreigner, says prices from New York to Los Angeles have hovered at about $US27,000; last year they were closer to $US32,000. SmartFlyer's Holtz adds that he's booked trips from Southern California to Arizona for $US18,000 instead of the usual $US22,000, as well as flights from New York to coastal Georgia for $US28,000, down from the previous market rate of $US34,000.

The new sky highways

So where's everyone going?

Until recently, Broder says, her private jet business was dominated by 40- and 50-year-olds moving their elderly parents from Florida back to the greater New York metro area – a pattern that had been playing out almost daily since mid-March. Blade, the short-distance aviation broker operating helicopters, seaplanes, and private jets, confirms that the lion's share of its charter business over the past few weeks has followed a similar flight plan.

Now, with restrictions lifting, new "sky highways" are starting to emerge as passengers begin to think about vacations with a quasi-quarantining spirit. "We're tracking large-scale interest in remote domestic destinations where there's plenty of room to be socially distant," Lavery says. "Everyone's going to the American West," adds Broder; Montana, Wyoming, and Utah are particularly popular for their abundance of resorts featuring spaced-out, five-star accommodations. Holtz and Ezon have had similar experiences, booking travellers from Los Angeles, Chicago, and New York into luxury stays at places like Montana's Paws Up and Utah's Amangiri. "Hotel prices are bottoming out," says Broder, who's also secured room blocks to further drive down prices and offset the costs of a private flight.

Popular summer destinations with limited direct flights are another rising stream for private jet bookings. Think Nantucket, which often requires a stop in Boston, or small Colorado towns that are accessed via Denver or Salt Lake City. On a commercially booked itinerary, these trips require travellers to navigate an extra airport and wipe down another plane seat. That's if they're even still available: At present, the shorter legs of these trips have been largely cut from service, according to Ezon.

Long-term shifts

Lavery says she believes the new interest in private leisure aviation charters is here to stay, even when summer vacations end: "Once you experience the upgraded option of anything – be it a hamburger or a hotel or a flying experience – it's very easy to rationalise support for that newfound desire, especially when it's under the guise of safety."

And considering that corporate travel may not return to its pre-COVID-19 levels any time soon, it's in the private aviation industry's interest to continue incentivising leisure business, too. According to a recent survey of 1705 companies conducted by the Global Business Travel Association, 77 per cent expect their approach to corporate travel will shift in the long term because of the coronavirus.

Marino, for one, has been won over. "We are currently planning a great summer adventure, which would have been impossible to consider if we had to rely on scheduled air," she says. "Now the transportation has the potential to be as exciting as the destination."

Bloomberg