““[Bill Gates] has been historically one of my best supporters…One of my favorite e-mails he ever sent me…I proposed this crazy project. And he sent back this two-line response: ‘This has got to be the craziest thing you’ve ever suggested. Please proceed.’” ”
Booking business jet charter online
Expedia, Orbitz, Priceline, Travelocity and other Web sites have made booking airline flights online incredibly easy. By comparison, just finding legitimatebusiness jet charter Web sites can be tough. A recent Google search for "private jet charter," for example, listed 185,000 Web sites (in all of 0.22 seconds). With so many sites offering online charter, how can you possibly separate the good from the bad and the ugly?
First, understand that charter Web sites fall into three categories: some are directly associated with charter operators (about 2,500 in the U.S.); some represent air charter brokers, who then facilitate the connection between operators and users; and others are independent marketplaces, which may also function as brokers or step aside once a connection between user and operator is made. At least one charter operator's Web site and several marketplaces are now offering airline-style online booking of charter flights, although how popular this approach will become remains an open question.
Operator-owned Web sites allow you to submit flight requests directly to an operator that holds an approved air operating certificate and has authority from the government to manage every aspect of the operation, including flight crew designation and aircraft maintenance. In the U.S., that means an FAA Part 135 charter certificate. Also included in this category are Web sites of aircraft management and service companies, which may or may not hold their own Part 135 certificates.
If an aircraft management company doesn't hold a certificate, it must work directly with a Part 135 operator who does and state this fact prominently on its Web site. Look for wording like this: "Charter flights arranged by XYZ Company are operated by ABC Charters or other air carriers licensed to operate under FAR Part 135 and registered with the U.S. Department of Transportation. XYZ Company acts as an agent for ABC Charters unless ABC cannot provide the flight, in which case, XYZ will act as an agent to obtain the flight from another operator." Acting as an agent is similar to acting as one's broker.
Executive Jet Management is an example of an aircraft management company that has its own Part 135 certificate. Jet Aviation's U.S. arm is an example of one that does not. It arranges its charters through New World Jet Corp.
Air charter brokers work as middlemen, coordinating flight details between a Part 135 operator and the customer. Brokers don't manage the aircraft, and they often work with hundreds of operators. The customer arranges all aspects of the flight through the broker, including departure times, catering and special services, and has little or no contact with the airplane owner/operator. Brokers are not regulated and some are better, even much better, than others. Good brokers can benefit both their charter clients and the operators.
Marketplaces are not charter operators, though some provide limited services of brokers. These Web sites post information about Part 135 operators, including available flights and price estimates, and allow you-the customer-to contact the operators directly to arrange and book flights. Once you make that contact, the marketplace may remove itself completely from the process, or do some of the work of a broker.
Weighing Pros and Cons
Before choosing which type of Web site to use, you should evaluate the benefits and disadvantages of each.
If you want to avoid paying commissions, consider an operator-owned Web site. Because you're not booking the trip or finding an operator through a third party, you'll pay only for the flight itself and the services you request, such as catering. Brokers and marketplaces generally charge an average of 7 percent of the cost of the flight, according to Streamline Jets president and cofounder Peter Faller. (Streamline Jets is a marketplace.) It is up to the broker or marketplace to decide whether to bill the operator, the customer or both for the commission.
Another benefit of operator-owned Web sites is the ability to provide accurate price quotes. There are exceptions, but most brokers and marketplaces provide only price estimates, and you won't know the actual cost of the flight until the details are finalized with the operator. Here's a tip: After getting a quote from an operator, ask for the wholesale price, which is the price a broker would pay and does not include the commission.
Sentient Flight Group's Privatejets.com, an operator-owned site, provides real-time quotes and aircraft availability information. It is also the only operator-owned Web site to offer direct online booking, using a process that mirrors that of commercial airline and travel Web sites. Most operators have Web sites, but customers generally have to submit their contact information and speak with a company representative before booking the flight, according to Jim Betlyon, CEO of both aviation safety auditing firm Wyvern and its sister company CharterX.
Using Sentient's Web site, you can reserve a jet the same way you'd reserve a rental car online, making the process fast and easy. Privatejets.com was also the first charter Web site to introduce the concept of a "hold button." By selecting that option, you can reserve an aircraft for up to three hours. During that time, Sentient removes the jet from its inventory of available aircraft. "Unlike airline seats, each jet is unique," said Matt Sevick, Sentient's vice president of corporate development. "If we sell it to someone else, that jet is no longer available. The hold button allows customers to set a jet aside while they finalize details."
Other examples of operator-owned charter Web sites include Delta Air Elite, TWC Aviation, M&N Aviation and Sawyer Aviation. These companies use an online quoting system designed by CharterX, but like most charter Web sites, they require you to speak with a representative before booking the flight. You can't book it online, as you can with Privatejets.com.
Charter Broker Web Sites
Using a broker also has advantages. Brokers generally have access to a much larger fleet of aircraft, for example. "A small Part 135 operator might have very high quality aircraft and crewmembers and service, but the aircraft might not be available enough or available nationwide," said Jets.com CEO and founder Nate McKelvey. Jordan Brown, COO of Charter Logic, added, "An operator who owns only a couple of aircraft might not have the right aircraft for a specific mission." Brokers, on the other hand, work with hundreds of operators and can arrange a flight at any time in any location.
Brokers might also be able to provide services that operators can't. For example, JetCombo.com uses proprietary software that merges airline computer reservation systems with data from private jet providers to offer a combination of airline and private jet flights, which can save thousands of dollars. A private jet trip from Newark, N.J., to Santa Barbara, Calif., would cost about $64,000, whereas a first-class airline jaunt to Orange County, Calif., followed by a business jet flight to Santa Barbara would run $7,000. "We are the only Web site that can combine airline and charter in a single itinerary," said JetCombo.com president George Khairallah.
A downside to using a charter broker is that you don't always know the quality of the operators it uses. For example, a broker may claim to contract only with "ARG/US-rated" operators," but as McKelvey explained, "ARG/US has so many levels-DNQ, Silver, Gold, Gold Plus, Platinum-it causes a lot of confusion. Just because an operator is using ARG/US doesn't mean that it has a good quality standard."
It's best to choose a broker whose operators are highly rated by ARG/US or Wyvern. Jets.com and A-List Jets work only with ARG/US Gold- and Platinum-rated operators, for example. "I [use] the 80/20 rule," said Air Royale president Wayne Rizzi, "meaning that 80 percent of our business goes to roughly 20 percent of the top audited charter operators. In the 14 years we've been doing business, we've found that these first-rate 20 percent of operators have the newest aircraft, the most experienced crews and adhere to the highest safety standards- way above what the government requires." Air Royale uses only ARG/US Platinum-rated operators and is a Wyvern Authorized Broker.
Virgin Charter was among the first online charter Web sites to heavily promote the term "marketplace." However, it does not have the category to itself; other marketplaces include Streamline Jets, CharterX and CharterMatrix.com. "We don't do the bookings; we just connect the buyer and seller," CharterX's Betlyon explained. Likewise, CharterMatrix president and CEO Terry Cooper said, "We don't broker the flights or get involved in the selling of the flight. We let the charter company and the customers do that."
Using a marketplace is a great way to save money. In addition to letting you request price quotes from numerous operators without having to involve a middleman, make multiple phone calls or do Internet searches, many marketplaces promote online bidding, where operators compete to offer you the best deal. Virgin Charter and Streamline Jets both offer online bidding.
Virgin Charter recently introduced a "hold button" and a real-time quoting system to its Web site, similar to that of Privatejets.com. "This will give customers the ability to purchase the flight immediately or place the aircraft on hold," CEO Scott Duffy said. You can also choose the online auction in order to save money, however. "You'll get the best of both worlds," Duffy added. "You'll have the real-time nature of the service, and you'll have the operators who continue to compete for your business." [BJT interviewed Scott Duffy in its April/May 2008 issue.-Ed.]
CharterX just launched a similar program-RealQuote-that provides direct, electronic quoting and booking ability with launch partners Segrave Aviation and Pegasus Elite. "There have been a variety of roadblocks that have prevented the air charter industry from realizing the time and cost efficiencies that e-commerce has provided commercial travelers for the past decade," CharterX's Betlyon said. "It's been a pleasure working with Segrave to overcome these obstacles and deliver e-commerce capability to our joint customers."
Streamline Jets' Faller said the company will introduce an online booking option at the end of the year, and it recently launched the Ready Five program, a desktop pop-up feature that runs continuously and notifies customers when an operator posts a flight on the Streamline Web site that matches the criteria submitted by the customer. A customer can enter as many as five airport combinations. For example, if you routinely fly from Teterboro, N.J., to Fort Lauderdale, Fla., the pop-up can notify you when an operator posts a flight between those cities or within a certain radius. The program is free for customers, but the company charges a flat $100 to actually book a flight.
CharterMatrix is a little different from other marketplaces because it makes money from advertising on its Web site and by designing online quote systems for other aviation companies. "I think we're one of the only companies that does not charge a commission," Cooper said. CharterX does not charge a commission either, but a user must become an Industry XChange or XChange Premium member to use the Web site.
The Charter Matrix Web site offers several innovative ways to search for and select flights, using a map-search function and request board. The color-coded map-search function allows you to select a region and view all charter flights available in that area, or you can request specific destinations using the request board. Operators also post information, including aircraft availability and flight schedules, and then wait for customers to contact them.
Now that you have an idea of the differences among the Web sites, don't be afraid to ask questions if you find a site that looks promising. Ask what type of company it is-a Part 135 operator, a broker or a marketplace-and how it evaluates the safety of the aircraft. Does it use only highly rated operators, for instance? You can also ask about commissions, since every broker and marketplace is likely to charge something different. And always ask for references and verify the information you receive with either Wyvern or ARG/US.