Boeing B777 client spent $200mn on VVIP refurb
Fabrizio Poli and Geoff Andrews, both managing partners Tyrus Wings, also say they see more people flying privately because of fear of terrorism.
Do UHNW individuals still buy jets or is chartering taking over?
UHNWs are buying and chartering jets. We have one client with a Boeing B777 when he already has a Boeing 767 VVIP, a Boeing Business Jet and a couple of Gulfstreams.
Tell us about fixed fee plans for jet hire?
Surf Air are doing well in California and the other advantage their ‘club members’ have is interacting with other like-minded people during the flight. Even though the aircraft leave from private jet terminals, this cannot be compared to a private jet service. This is a niche that sits between business class and jet charter. Surf Air use the Pilatus PC12 single-engine turboprop, and this works well for short one-hour hops around California. This aircraft can work in Europe too, but I also see a market for using eight or ten-seater jets on set destinations. In this case an app can help the operator communicate with the clients better and deliver improved service.
How much money do your UHNW clients spend?
We deal in mid-size to large cabin aircraft so typically the cost is north of $20m. A pre-owned Boeing B757 can be bought for around $10m, but you can then spend substantial sums on a new interior and having the engines refurbished. Our Boeing B777 client would have spent close to $200m once the aircraft has been completed into VVIP configuration.
What trends do you see?
I see more people flying privately because of fear of terrorism. Business models like Surf Air where you pay a flat fee a month and get unlimited flights, sharing the aircraft with other members of the club, will continue to do well.
From a business point of view being able to visit multiple cities in one day at short notice and also sending your jet out to pick clients up are all ways of using your aircraft as a business tool, just like you use your smartphone or iPad.
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Why is chartering becoming increasingly popular?
Although owning an aircraft gives you freedom and flexibility, financially it’s rarely worth considering for someone who flies less than 100 hours per year. There are over 7,000 aircraft available for charter worldwide, including large luxury jets.
Tell us about all-you-can-fly private jet service for a fixed monthly fee.
These business models fulfil a different, and more limited, need. For customers who fly on the same route each time, they can be an attractive alternative to an airline ticket. But if your meeting overruns, the aircraft won’t wait for you and, of course, you will be sharing the cabin with other travellers, which many people don’t like. Most customers choose private aviation because it has the flexibility of having their own itinerary, using smaller airports and taking multi-leg flights in a day.
How much money do clients spend on jets?
The purchase price of an aircraft goes from $400K for a small second-hand jet with several thousand miles on the clock to $65m for a new Gulfstream G650, to $100M+ for a large, customised VIP airliner conversion, such as a Boeing Business Jet. Then there’s annual maintenance, crew, management, insurance and other running costs. In comparison, chartering prices range from £3,800 a day to charter a small jet from London to Paris and back to £200-£300K+ for a long range flight such as London to Las Vegas, in a large, luxury VIP aircraft.
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