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| Feature |
Aerial Combat
Michelle Seaton
08/01/06
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Adam Bold, founder of the Mutual Fund Store is, by any measure, a frequent
flier. He spends most of his days traveling to or from the 42 cities in which
his investment advisory company maintains offices. Bold estimates that in the
past two months he has spent no more than four consecutive nights at his home in
Kansas City.
Bold considered buying a jet, but did not feel that the
benefits would outweigh the hassles. He also rejected fractional
ownership, put off by the Byzantine fee structures and five-year
commitments. Instead, two years ago Bold bought his first Marquis Jet Card,
which provides flight time on jets owned and maintained by NetJets, the
fractional jet company, for a straightforward hourly rate.
TOP VIEW
Once considered the bland, utilitarian stepsister of the more exciting fractional aircraft industry, the private aircraft charter sector has stepped into the limelight with competitive pricing, flexibility and an improved reputation for safety. Meanwhile, the fractional industry has lost some of its former luster as it struggles to meet growing customer expectations and fend off competitors. |
Although he
enjoyed traveling with Marquis Jet, he discovered that his per-hour flight rate
was substantially higher than it would have been on chartered flights. Bold
decided to sign on with Manhattan-based charter broker Blue Star Jets with whom
he now books about 80 percent of his flights. “Charter is substantially less
expensive,” Bold explains. “I can get the same jet for 20 percent less or a
bigger jet for the same cost as Marquis.”
Several years ago, that might not
have swayed a traveler such as Bold away from the safety and convenience offered
by jet card programs. The process of finding a reputable charter company,
vetting that business for safety and then booking the individual flights
consumed too much time. But ongoing consolidation and the emergence of new
charter brokerage firms have made charter more attractive, both in terms of
pricing and service. This is forcing fractional companies to change the way they
run their jet card programs.
The charter industry’s growing sophistication
is reflected in companies like Blue Star, which maintains a network of regional
charter brokers who manage all the details of finding and scheduling flights,
ordering catering and arranging ground transportation for clients. “If I wanted
a rare Spanish wine on the plane, it would be there,” says Bold, describing the
service provided by Kimberly Small, a Chicago-based broker who handles his
independent flight arrangements through Blue Star Jets.
In addition to
competitive pricing, charter companies can offer certain perks their fractional
competitors cannot match. “Adam has had the same jet all week, and now it’s
sitting on the ground waiting for him all weekend,” Small says. “And he’s still
going to save $8,000 over what this would have cost through a fractional
program.”
Bold retains his Marquis Jet Card and uses that service about 20
percent of the time, usually on short-leg flights that begin in cities far from
his home. But on longer flights with higher per-hour fees, Bold would rather
charter.
When he first began to use Blue Star Jets, he was chartering a light
jet from an operator in Chicago and paying the repositioning fees between
Chicago and Kansas City on either end of the flight, which made each trip cost
roughly as much as a flight with Marquis Jet.
Then Small found a charter
company in Kansas City that was managing a Citation III for a small firm.
Because the company was eager for the charter business Blue Star could bring, it
made the plane available at an attractive hourly rate. Bold no longer has to pay
for repositioning fees because the plane is based near his home in Kansas City.
The net result is that Bold can fly on a larger jet at a lower hourly rate than
he could on a trip arranged through Marquis Jet. He also flies on the same
aircraft every time and is on a first-name basis with the pilots. “Whenever he
wants to fly anywhere, I call the company and say, ‘Tell them to cancel whatever
they’re doing because Adam wants to fly,’” Small says. “And they do it.”
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