BY Andrew Gellatly in Profiles | 09 SEP 02
Featured in
Issue 69

Jetset Junta

Private Planes

BY Andrew Gellatly in Profiles | 09 SEP 02

New security hassles and airport delays are driving not just moguls but also the merely well-off to personal jets in record numbers. As the New York Times noted, first-class or not, 'the pay-off for long waits at security is to have your $42 Tweezerman cuticle nippers taken away from you'. Small wonder then that airports servicing private aircraft have seen their business grow more than 25% in the past six months, and that part-ownership companies selling shares in jets are booming.

'A lot of people have a great deal of money and last year's events forced a focus on what is important in life, particularly privacy and family', observes Rob Hersov, CEO of Marquis Jets Europe. His company represents NetJets (owned by Nebraska billionaire Warren Buffet), the world's largest fleet of 460 private aircraft, which employs a staff of meteorologists as well as 1,600 pilots, and operates its own flight-simulator training centre.

After private aviation's wilderness years in the early 1990s, NetJets has been growing fast. There are now over 3,500 part-owners worldwide, up from fewer than 1,000 in 1997, according to the US National Business Aviation Association. Increasingly NetJets' clients are groups of friends getting together to hire planes for skiing or to take a holiday. The fact that Hersov, former CEO of sports internet site, drooled over by the Sunday Times as Britain's best internet company before its demise last year, should be selling jets testifies to the sector's oh-so-now-ness. 'These aren't corporates,' says Hersov, 'these are private individuals changing their lives, spending more time with the family, getting home at night from meetings.'

Here's how it works. You purchase a share in a plane, but that doesn't mean you always get to fly on that specific aircraft. The company guarantees a plane of your make or better, then delivers the nearest one to your location. NetJets, for example, already schedules enough flights every day to qualify as the United States' eighth-largest commercial carrier.

>At entry level, a European customer paying £60,000 will get 25 occupied flying hours in an eight-seater jet, enough for six trips to Geneva and back. And after a flick though the brochure ('think of a shared Hamptons beach house but with flight attendants ...') with its glowing endorsements from Run DMC and sweatered PGA types, the logic seduces you like a mantra. The eight busiest US airports, with 24% of traffic, already have more flights scheduled than they can possibly handle in bad weather, and four of them have more flights scheduled than they can handle even in perfect conditions. But with a jet you can fly where you want to go, not just to the 500 US airports used by major airlines, but also to another 5,000 smaller airports.

Passengers do not have to walk through metal detectors checking for guns. Nor do they face an airport check-in clerk asking whether they packed their own bags. Prada pumps go unmolested, laptops unscrutinized. Passengers generally board directly off the tarmac. 'We know all our customers,' purrs Hersov, 'and if it's your aeroplane, you know who's on it.' But the much craved discretion has a darker side. According to one aviation specialist who raised the issue on the condition of anonymity, 'I can be Osama bin Laden under an alias. All I have to do is pony up the money and I've got a new missile.'

>It's true there have been some well-publicized accidents. First a plane chartered by golfer Payne Stewart crashed in South Dakota in October 1999. Then a Gulfstream III went down in Aspen trying to land on a notoriously difficult airstrip at night, killing all 18 on board. But in the jet business smaller doesn't necessarily mean more dangerous. According to figures kept by consultants Robert E. Breiling Associates, in the past five years there have been an average of 0.296 accidents per 100,000 flight hours for all commercial carriers; in comparison, jets flown by part-ownership companies have had just 0.27 accidents. The Payne Stewart crash was the first fatal charter jet accident since 1993.

Owning a plane outright is still the biggest statement of all; aviation consultants say that 350-400 hours of flight time a year is about right to justify personal ownership of a jet. It doesn't have to be decorated like Hugh Hefner's flying purple bunny, but once on board it's all yours: the silverware, the DVDs, the Krug fizzing in your own crystal. And in gizmo terms small jets can rival anything else flying. Video cameras with frontal views of the plane, local area networks for laptops and three-dimensional imaging systems that show the jet on take-off and landing are all commonplace.

For the paranoid traveller the new Gulfstream V-SP now has the option of a $3 million anti-missile system in the tail of the jet, designed to confuse heat-seeking missiles. But ownership, like any interior decoration project, also brings with it a uniquely expensive set of problems. The average time for completing the interior of a jet is between a year and 18 months, at a price of $7.5 million. For refurbishing older planes it's closer to six months and $2 million, and completion centres are snowed under with orders. Every major builder of new jets is sold out for several years.

At the very top end of the market, Boeing outfits special 737 jetliners, which would typically hold 130-140 people. They are reconfigured for 10-30 people, with a gym and plenty of office and dining space. Even at a $50 million refurbishment price, sales have exceeded expectations. Paul Allen, co-founder of Microsoft, regularly travels in his own Boeing 757 - the type of plane that crashed into the Pentagon.