Supply Chain

Business Travel Goes Private

Alternatives include jet-card programs and charter companies.
Laura DeMarsJanuary 1, 2006

With commercial airlines flying into bankruptcy more frequently than flights arrive at O’Hare International, business travelers are increasingly looking for alternatives — in particular, jet-card programs and charter companies.

Six-year-old Weymouth, Mass.-based Sentient Jet Inc. is proof. The company, which books flights on 900 private jets for its several thousand subscribers, has increased membership by 85 percent in the last year. Hampton, N.H.-based Private Jet Services Group Inc., a charter service that specializes in groups ranging from 15 to 1,500 people, has seen 100 percent growth in each of the past four years, according to CEO Greg Raiff.

With more than 3,000 private-jet carriers and some 6,000 private airports (including 600 commercial airports) in North America, private air travel is not only convenient but also cost-effective, says Sue Swenson, team lead, travel and aviation, for natural-gas producer Encana Corp. In the first three quarters of 2005, the Calgary-based company flew 21,000 employees, two-thirds of them by corporate jet or charter. Swenson estimates that flying on commercial airlines adds about four hours to any trip and can cost an extra $125 per hour per executive in nonproductive paid time.

To use the services of a jet-card company like Sentient, businesses place about $100,000 in a flight-time bank account, which is debited as jet hours are used. Most private-flight-card and private-jet companies do not charge for extra passengers, allow reservations up to 10 hours before flight time, offer broadband on the plane, and fly from point to point without transfers.

A key benefit of the jet-card approach, says Sentient CEO Steve Hankin, is that “you’re not tying up the capital you would if you bought a plane or invested in fractional air time.” Joseph Appelbe, executive vice president of Subaru New England, points out that the plush ambiance of charter services is an added bonus. He sends 50 of his best dealers to the Caribbean for vacation each year, and recently turned to Private Jet Services instead of commercial flights. Appelbe says chartering a plane for the group saved him the hassle of coordinating commercial flights, and his employees were happier.

“They work harder because they want to go again,” he says. “When you look at what you’re trying to accomplish, chartering is well worth it.”