Private Jets gain Altitude

by Stan Luxenberg

Higher profits, lines at airports, marketing boost use of charters.

Executives at Turner Broadcasting System, a unit of Manhattan based Time Warner, faced a dilemma this spring.

They needed to fly to Michigan to see the final game of the National Basketball Association championship and to talk to Commissioner David Stern, an important business partner of the broadcaster. But they also needed to be back in the office the next morning.

There was only one way to go. When the game ended at 11p.m., the executives boarded a chartered jet and flew home to Atlanta in about two hours. "If they flew commercially, they would have had to stay overnight in a hotel," says Robert McGurk, Turner's Vice President of corporate services.

Such convenience is just one of several factors persuading more companies to take their air travel business private. Swelling corporate profits, lengthening lines at airports, and clever marketing are also contributing to the strong growth in the use of corporate planes.

"The demand is going up as people come to understand how much time they save", says Adam Weisenberg, U.S. managing partner of tourism, hospitality and leisure practice at Deloitte & Touche USA. "If you fly into Newark, you have a good chance of hitting delays. It is much simpler to take a corporate jet out of a small airport in a place like Teterboro."

Last year, 33% of the members of the National Business Travel Association, a group that includes the corporate travel departments of most Fortune 1000 companies, reported that they used some from of private aviation. That figure was up from 26% in 2002 and is expected to jump again this year.

"More managers now think of private aviation as a routine part of travel programs", says Caleb Tiller, the association's senior manager of public relations.

Evidence also shows up in figures for sales of business jets. In the first six months of this year, those figures jumped 37% from the same period last year, according to the General Aviation Manufacturers Association. The price, however is steep. Jets cost from about $4 million for a small plane to more than $40 million for a deluxe model that can carry 18 executives nonstop to Europe.

Rather than buying jets outright, more companies are chartering planes or joining fractional programs. A one-sixteenth stake in a Raytheon Hawker 400XP, which seats four, costs about $400,000 from Flight Options, based in Cleveland. Meanwhile, Manhattan-based Blue Star Jets charters large business jets for about $5,000 an hour.

"Corporate flying is not all that expensive if you pile a group onto a plane," says R. Randall Padfield, editor in chief of Aviation International News.

COST COMPARISONS

Round trip airfare for five between N.Y. and Chicago

GOING COMMERCIAL = $7,435 - First class unrestricted fare.

GOING PRIVATE = $11,390 - Price of chartered plane