Flight to Convenience

Commercial airline travel usually means one thing: lots of wasted time. For busy executives, that costs money. Apart from lengthy check-in procedures, there's a 30% chance that a scheduled European flight will be delayed at least 15 minutes. And since the Sept. 11 terror attacks, not only are some executives spooked by security concerns, but new airport procedures to allay those fears can add another hour to check-in times.

In response, a growing number of businesses are turning to private air charters to move key employees from point A to point B. At a time when the commercial aviation industry is stumbling, the private charter business is soaring. "Sept. 11 was a catalyst for actual change," says Patrick Margetson-Rushmore, CEO of London Executive Aviation, a private charter operator. "We were experiencing a downturn before then and assumed we'd be down for the year. Now we'll exceed our forecasts."

Air taxis aren't just for top brass. Much of the new business comes from small-to-medium-sized companies that need to move middle managers around several European cities within a few days. In a survey of European charter operators by the trade publication Air Charter Guide, 35% said traffic had increased since the attacks, while 40% reported no downturns since September. "That's a strong result" in recessionary times, says spokesperson Meara McLaughlin, especially considering that business for Europe's commercial carriers has fallen by 15% within Europe and transatlantic business by 33%. In the U.S., which has long led Europe in general aviation, domestic private charter flights have surged 30%, and business to Europe is booming too. World Air Pass, a U.S. broker between jet operators or owners and clients, says flights to Europe are up 30%.

Security worries may soon fade, but charter operators are convinced that they'll keep most of their new customers. "Once they've tried it, they don't go back to commercial airlines," claims Michael Hyde, president of World Air Pass. Why not? Convenience, flexibility and efficiency. "It all comes down to value in time," says David Savile, group managing director of Air Partner, Europe's largest broker. For example, charter planes can take off and land from 3,000 airports in Europe, 10 times the number available to commercial carriers. Forget about arriving hours ahead of your flight to check in and clear security points. Even for overseas journeys, most customers are onboard within 15 minutes of their airport arrival. And if you wrap up your work early, or need to stay late, the airplane is ready when you are. "Reducing the hassle factor is a very important consideration," says Daniel Solon, an analyst at Avmark International, an aviation consultancy in London.

Private aviation flights aren't cheap, but compared to first- or business-class tickets — especially those bought at the last minute — they're sometimes a bargain. World Air Pass can fly a 14-passenger jet non-stop from New York to London at $3,000 a seat, one way. Considering that a round-trip, first-class commercial ticket could cost about $11,500 (and business class up to $7,400), a private jet can still be cost-efficient. Even when the private fare is higher, time savings can more than compensate. Savile says that for $29,000, Air Partner can ram an eight-city Europe tour into four days — the same trip could take a week on commercial flights.

Of course, the slipstream of security fears hasn't lifted all charter operators. "Security managers at many Swedish companies have forbidden all types of flying," bemoans Trond Michaelsen, owner of Aircraft Charter World in Stockholm. "They see terrorists everywhere." Michaelsen expected a surge in business after the terror attacks; instead corporate security fiats have halved his trade. And some executives may worry that the smaller planes many charter firms use aren't as safe as commercial airliners, though the figures are equivocal. In any case, Michaelsen expects his business to rebound within six months.

Solon first noticed the trend toward private aviation in 1998, when congestion and delays at Europe's hub airports were angering "the passengers most important to [the commercial airlines'] revenues, first-class and full-fare economy flyers, the very people who are in a position to go elsewhere." Solon expects private charter services will continue to grab big chunks of the top-end commercial market, where margins are as comfortable as a first-class seat. Meanwhile, low-cost operators like easyJet and Ryanair will siphon off budget passengers. And that's a squeeze that could keep Europe's big airlines in a tailspin.