You wouldn’t believe the things that businessman Peter Agur has overheard on airplanes. Talk of pending deals. Private deals. Deals that could make a lot of people really rich. And a lot of people really mad.
Agur, an aviation consultant, flies regularly from his base in Atlanta to Newark, N.J., a route that’s also often flown by AT&T employees traveling between their company’s facilities.
“I’m amazed at the things said by people of strategic importance,” says Agur, president of The VanAllen Group Inc. “If I were MCI or Sprint, it might be worth my while to put an occasional person on board those airplanes just to listen.”
Doing business on board a commercial airplane is simply a bad idea, says Agur. Besides prying eyes of potential adversaries, you also have to deal with long check-in lines, connecting flights, crying babies and cramped tray tables that force you to do acrobatics with your laptop.
That’s why Agur, who’s logged more than 2.5 million frequent-flyer miles in the last few years, doesn’t open his briefcase on an airplane. It’s also why he’s preparing to purchase his own private business aircraft.
Private planes are a much more palatable and refreshingly affordable alternative to flying commercial. And surprisingly, business jets are no longer royal barges reserved just for the corner-office crowd. In fact, a 1997 Harris Poll shows that more than 85 percent of passengers on business jets are not top management. They’re ordinary employees of ordinary companies, out doing their jobs. And their reasons for flying corporate make good business sense.
Productivity is one big reason. Employees get a lot more work done on private planes than on commercial airliners. The Harris Poll shows that hour for hour you get 20 percent more work done in a private plane than you do in your own office. But when you fly commercial, you get 40 percent less done than if you were in your office.
You get so much more done on corporate planes because they are often configured to resemble an airborne office, with workspace, faxes and phones, and the flight itself becomes part of the business mission, explains Douglas Carr, a specialist with the National Air Transportation Association.
Time is another critical reason to fly corporate. There are no hubs to constrain your journey, no arriving at the airport an hour before the flight, no long security checks. And you don’t have to stick to an airline’s schedule. If your meeting is over at 1 p.m., you don’t have to wait for the next flight at 5 p.m. If your meeting is still going strong at 7:30 p.m., you can stay and clinch the deal instead of rushing out to make the 8 p.m. flight–the last one out that night. Flying corporate also means you don’t have to spend the night if you don’t want to and that translates to fewer hotel bills for your company. And it’s good news for you, too–less time spent traveling equals more time at home with your family.
Another factor that shaves precious time off trips: Private planes can fly in and out of 5,000 small airports nationwide–10 times as many as the big guys with the big planes. That means you don’t have to battle traffic to get where everyone else is going. Chances are there’s a smaller airport close to your home or office. In the Chicagoland area alone, there are 17 airports open to business aircraft and only two that serve scheduled airlines, according to Priester Charter, a plane charter company in Wheeling.
Now that you know the reasons to fly corporate, let’s talk about how–and how much it’ll cost.
Most people who fly corporate start by chartering a plane. Chartering makes sense for people who fly fewer than 50 or 100 hours a year. Depending on the plane, chartering costs a few hundred to a few thousand dollars per hour. (Look in the Yellow Pages under “Aircraft Charter, Rental and Leasing.”)
There may be a minimum hourly usage requirement and a day rate in addition to the hourly flight rate. You’ll also pay to ferry the plane to and from its home base. If you stay overnight, you’ll pay for the crew to stay overnight, too.
Surprisingly, it may sometimes be cheaper to charter than to fly commercial–particularly for a large group flying on short notice. Walkup fares are subject to airline whims. Charter rates usually don’t fluctuate and they’re the same whether you’ve got one passenger or five on board. Travel$ense, a computer program from the National Business Aircraft Association (202-783-9000; $495), can help you choose the most economical way to travel. It factors in your itinerary, the value of potential lost work time and hotel costs.
Another option is to buy your own plane. A used, five-passenger twin-engine plane will run you $100,000. A used Learjet that seats seven could cost $2 million. You’ll still have to pay hourly flying costs to keep the plane in the air, but they’re generally half of what you’d pay if you chartered. Offsetting those savings are management fees, insurance and crew salaries. Some owners let the plane pay partly for itself by chartering it out when they’re not using it. Industry consultants say buying your own plane starts to become cost-effective when you fly it more than 300 or 400 hours a year.
There’s a third option for people whose flying needs fall somewhere in the middle: fractional ownership. It’s the industry equivalent of a time-sharing. Companies that offer fractional ownership are Business Jet Solutions (800-353-9123), Executive Jet Inc. (800-821-2299) and Raytheon (888-824-6359). You buy a block of hours–generally 50 to 400 hours from an airplane’s annual allotment of 800 passenger-occupied flying hours. That means you own one-eighth to one-half of the plane, typically for a period of five years.
You pay three fees: a purchase fee, a monthly management fee and an hourly usage fee. At Business Jet Solutions, for example, the purchase price for a one-eighth share of a small Learjet is $738,000. Monthly management fees range from $6,980 to $60,800. Hourly usage fees, which also depend on the size of the plane, are $1,195 to $2,270.
The benefits of fractional ownership: You don’t have to worry about maintaining or staffing the plane. It’s always there when you need it. In most cases you need only give four hours’ notice to have a jet fueled and waiting at the closest airport–or a far-flung one if you’re having it pick up a client. Fractional ownership is useful for people who don’t fly round-trip the same day. Unlike a charter, you don’t have to pay for the plane to sit around and wait for you or to return to its base without you.
Engineered Machine Products Inc., in Escanaba, Mich. is a prime example of a company that benefits from corporate travel. The closest major airport is two hours away from headquarters. For years, employees tacked four hours of round-trip drive-time onto long connecting flights to visit work sites in Waterloo, Iowa, or Columbus, Ind. Since February, they’ve been flying in their one-eighth share of a Learjet 31, out of tiny Delta County Airport, half a mile from headquarters. Entire trips take an hour. They can visit three or four sites in a day, which was unthinkable in the past.
As a result, says president Brian Larche, more business gets done–business that’s worth more than the extra cost of flying private. He doesn’t tell a client he can’t be there, because he can. He doesn’t let a competitor get there faster than he does.
These resources can help you decide how or if you should join the jet set. National Aircraft Resale Association, 703-671-8273; National Air Transportation Association, 703-845-9000; and Air Charter Guide, 617-547-5811.
