Harriet Edelson NEW YORK TIMES
Travel to Far-Flung Places Spurs Private Jet Growth
December 16, 2013
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  • The destinations read like the world map in the game Risk — Irkutsk, Mongolia, Madagascar.

    Business travelers are increasingly flying to hard-to-reach places, helping fuel a revival in the private jet industry. And nowhere is the demand greater than in the longest flights to the most exotic locales, requiring planes that can fly up to 13 hours without refueling.

    “The segment of business aviation that has grown the fastest in the last five years is the ultra-long-range jets that are capable of flying halfway around the world,” said Ed Bolen, president and chief executive of the Washington-based National Business Aviation Association.

    The number of long-range flights rose 18.7 percent through October this year compared with the same period last year, while the total number of business aviation flights was down 0.7 percent, according to Argus International, which tracks the total flights that begin or end in North America. As for the jets themselves, the manufacture of ultra-long-range planes grew 29 percent for the year through September, compared with the same period last year, while business jet manufacturing as a whole shrank by 2.1 percent, according to the General Aviation Manufacturers Association.

    Behind the growth is a more connected world, where businesses are “truly operating in a global marketplace,” Mr. Bolen said. Not only multinational corporations but also companies of all sizes are doing business beyond the American borders, he said.

    “The Internet has helped shrink the world, and to do business in far-flung places there is still a need for face-to-face communication,” he said.

    Oil and mining company executives are among the most frequent users of long-range service, but now they are being joined by asset managers and technology executives.

    A host of companies are serving this growing breed of business traveler, including NetJets, VistaJet and a private service owned by Delta.

    Thomas Flohr, the owner of VistaJet, bought his first aircraft more than 10 years ago and began leasing it when he was not using it. The routes, he said, have changed considerably, “mainly due to globalization.”

    When he was flying his own plane, “the majority of my travel at the time consisted of connecting major U.S. cities with London, Zurich and Paris,” he said.

    Today, his company flies point-to-point routes between Zurich and Maputo, Mozambique; China and Lagos, Nigeria; China and Ghana in West Africa; and Russia and Mozambique.

    As global business has shifted, the growth of markets like China, Nigeria, Uganda, Angola and Brazil has been staggering, he said.

    Any destination is within reach — as long as the runway is long enough. “When you see a jet parked, business is being done in that remote region,” Mr. Flohr said.

    “These are not routes that people fly for vacation,” said Joshua Marks, chief executive of masFlight, an aviation operations data and analytics company based in Bethesda, Md.

    Beyond convenience, there are competitive reasons to use private jets. “You want to get in as quickly and stealthily as you can,” Mr. Marks said. “Private jets don’t market routes. They respond when clients ask.”

    Also, in some places, scheduled airline service may be limited or nonexistent. Africa and the former Soviet republics of Central Asia “are two examples of places where there is not great scheduled air service,” said John Vawter, vice president for the Americas region of CWT Energy, Resources & Marine, a travel services provider. “There has to be a specific need, a specific reason” for companies to use private aviation, he said.

    Business jets also can be used, he said, for medical or emergency evacuations from countries such as Egypt and Libya, or during travel disruptions in Europe such as those caused by the ash cloud from an Icelandic volcano in 2010.

    The growth of the long-range routes has helped the industry recover from the recession.

    “Five years ago, private aviation was at its apex,” said Jordan Hansell, chairman and chief executive of NetJets, a company owned by Warren E. Buffett’s Berkshire Hathaway. The industry suffered in the fourth quarter of 2008 and the first quarter of 2009. Since 2010, it has been “steadily and slowly coming back,” Mr. Hansell said.

    With NetJets’ fractional ownership model, which it started in 1986, a customer owns an interest in a specific aircraft. With four to six hours’ notice, that jet or another, identical one can be available to the fractional owner. NetJets did not cite an hourly cost of flying.

    At VistaJet, companies typically book a jet 24 hours in advance, but sometimes it is even closer to the flight time, according to Danielle Boudreau, the company’s vice president for marketing. If someone needs to travel within six hours, VistaJet can arrange it if an aircraft is available, but it’s better if travelers plan at least a day ahead, she said.

    Businesses usually sign a three-year contract for a certain number of flights, but if a business wants a plane by the hour, the cost to charter a Global 5000 is about $16,000 an hour in the American market or 15,000 euros an hour, about $20,650, to charter a Global 6000 in Europe.

    It’s not only VistaJet and NetJets that have capitalized on the growing demand. Delta Private Jets, a subsidiary of Delta Air Lines, operates a fleet of 42 jets including long-range, midsize, supermidsize and light aircraft. Delta Private Jets flies to Europe and other international destinations.

    In general, private jets are “not designed to pamper,” said Michael J. Dyment, managing partner at NEXA Advisors, an investment company specializing in the aerospace and transportation fields. “They are designed to get these executives to critical meetings fast and get them home.”