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MohawkWeekend
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"Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 11:40 am

Just finished reading an interview with the President of "Wheels Up" on the CNBC website. If his projections are correct, his company and others like it will continue to siphon more and more high value traffic away from US airliners. He mentions his company's relationship with Delta. I'm not sure how Delta management sees them as a partner vs a threat.
https://www.cnbc.com/2021/07/14/wheels- ... -spac.html
 
orlandocfi
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 12:06 pm

MohawkWeekend wrote:
Just finished reading an interview with the President of "Wheels Up" on the CNBC website. If his projections are correct, his company and others like it will continue to siphon more and more high value traffic away from US airliners. He mentions his company's relationship with Delta. I'm not sure how Delta management sees them as a partner vs a threat.
https://www.cnbc.com/2021/07/14/wheels- ... -spac.html


I think this partnership is a very good move for both companies. The premium customer seeking on-demand service on a little king air or citation to a small airport that is not served by a major airline will still likely prefer the first class cabin experience when going to a larger metro airport. This is a good way for Delta to capture revenue that might otherwise go to a competitor.
 
KCaviator
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 12:23 pm

Delta just sold Delta Private Jets to Wheels Up, so I doubt they see them as much of a threat.
 
FlyingElvii
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 1:44 pm

orlandocfi wrote:
MohawkWeekend wrote:
Just finished reading an interview with the President of "Wheels Up" on the CNBC website. If his projections are correct, his company and others like it will continue to siphon more and more high value traffic away from US airliners. He mentions his company's relationship with Delta. I'm not sure how Delta management sees them as a partner vs a threat.
https://www.cnbc.com/2021/07/14/wheels- ... -spac.html


I think this partnership is a very good move for both companies. The premium customer seeking on-demand service on a little king air or citation to a small airport that is not served by a major airline will still likely prefer the first class cabin experience when going to a larger metro airport. This is a good way for Delta to capture revenue that might otherwise go to a competitor.

The DPJ Jet Card was a sales dept perk to help with securing corporate contracts. Not all the jets were Delta-pend, they used many “associated” management companies planes, if they could meet Delta’s standards, such as extra inspections, service level, etc.

They also used it as a perk for top level decision making execs. They would note that a fortune 500 executive was flying soon, compare that to available empty segments, and offer that segment to the decision maker.
 
MO11
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 1:46 pm

MohawkWeekend wrote:
He mentions his company's relationship with Delta. I'm not sure how Delta management sees them as a partner vs a threat.


The sale closed 18 months ago. From Forbes article December 2019:

Terms were not disclosed, however, Wheels Up CEO Kenny Dichter said Delta will become his largest shareholder. Delta CEO Ed Bastian described the transaction as a merger, and said moving its private jet business alongside the parent company instead of as a wholly owned subsidiary will unleash potential.

At closure, Delta owned 27%. Following this transaction, Wheels Up! acquired Gama Aviation.

One big difference between this and other membership-based charters is that WheelUp! members can earn and redeem SkyMiles, receive discounted fares on DL, and earn Medallion status while traveling on WheelsUp!
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 1:54 pm

The Russians probably thought training the Germans in the 30's was a good idea too.
It's ok right now for Delta the company and and it's shareholders. But I struggle to see where it's such a good deal for DL employees. Maybe this is where some of the premium passengers are going. If Wheels Up and it's competitors get really efficient, now the bar is lowered to use a biz jet vs buying for example 3 or 4 F tickets for a executive team or a rich guy's family.

Since they use other companies planes too, having more jets that companies have on the books might mean they'd be more tempted to use them when not being used by the brokers.

Time will tell.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 2:04 pm

I think this partnership is a very good move for both companies. The premium customer seeking on-demand service on a little king air or citation to a small airport that is not served by a major airline will still likely prefer the first class cabin experience when going to a larger metro airport. This is a good way for Delta to capture revenue that might otherwise go to a competitor.[/quote]

I've flown both - including sitting in the back of a Lear 35 on the hump seat during a full flight. FYI you hit your head on the ceiling during bumpy flights.

But you can't beat the FBO experience of no TSA, no packed waiting areas and certainly not mingling with some of the passengers that are flying today. Unless airlines pull out the Concorde model - separate check-in, concierge service and upgrading all F class service (not just LA-NYC), I would take GA all day long.
 
MIflyer12
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 2:10 pm

People have been talking about how personal jets are going to hollow out scheduled service for decades. Seriously - I attended a presentation where automotive interior suppliers were encouraged to develop small jet interiors as the next big thing, probably about 1993. There are advantages for people with big money, who just don't care that BOS-OKC is a $20,000 trip. There may be advantages for firms in certain industries that are high consumers of last-minute travel to less well-served airports. But losing tens of millions of business passengers a year to these outfits? Not in my lifetime.
 
strangeplanes
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 2:13 pm

I work for a company that does probably $10 billion in revenue a year. The work involves a lot of travel. No one flies private between cities. Top Execs visiting multiple cities in a single day take standard flights.

The only time a PJ is used is when there is a need to get to a remote site asap. Then they will charter a plane for the employees or execs to take. I see Delta owning Wheels Up as a win-win for Delta and staff.

Shower Thought: If Delta majority owns wheels up, then can we not consider wheels up staff, delta staff.
 
Cubsrule
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 2:31 pm

MohawkWeekend wrote:
But you can't beat the FBO experience of no TSA, no packed waiting areas and certainly not mingling with some of the passengers that are flying today. Unless airlines pull out the Concorde model - separate check-in, concierge service and upgrading all F class service (not just LA-NYC), I would take GA all day long.


The question is really whether that's enough of a value add that it makes sense to fly private. You can't beat the experience of riding around in a Rolls Royce either, but you don't see many of those in the driveways of even folks who can afford them easily.

On short-ish segments with a lot of commercial service, the service pattern certainly suggests that very few people value the FBO experience enough to fly private. Chicago-New York has thousands of daily seats on scheduled carriers and it looks like 8-10 private aircraft scheduled today across all airport pairs.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 2:49 pm

The last 3 comments are interesting. Delta management must be making a huge mistake investing in a product no one will use.

Delta knows how many passengers it losing to corporate flying. Otherwise why the investment? The point is if you can get trip costs down to 4 FC tickets, why wouldn't you go corporate?
To StrangePlanes - has your company returned to unlimited business travel? Wait till one of your C-suites is sitting in coach and an anti-masker (or any number of recent passenger misbehaviours) goes zonkers and the Captain asks for volunteers to restrain the individual. 10 years ago - did you hear as many stories about this? Ask any FA.
 
GalaxyFlyer
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 3:08 pm

strangeplanes wrote:
I work for a company that does probably $10 billion in revenue a year. The work involves a lot of travel. No one flies private between cities. Top Execs visiting multiple cities in a single day take standard flights.

The only time a PJ is used is when there is a need to get to a remote site asap. Then they will charter a plane for the employees or execs to take. I see Delta owning Wheels Up as a win-win for Delta and staff.

Shower Thought: If Delta majority owns wheels up, then can we not consider wheels up staff, delta staff.


Quick question, if they needed to visit, say Cedar Rapids, Spokane and Pensacola, how would they do that in “one day”? Bizjets are not about the cost, but about saving time whether it’s for a technical repair team that needs to move now or execs visiting three remote cities in two days versus spending two additional days on connecting airline flights.

Wal-Mart, Eaton and Southern Company for a few examples don’t have large private fleets because they like throwing away money.
 
Cubsrule
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 3:13 pm

MohawkWeekend wrote:
The last 3 comments are interesting. Delta management must be making a huge mistake investing in a product no one will use.

Delta knows how many passengers it losing to corporate flying. Otherwise why the investment? The point is if you can get trip costs down to 4 FC tickets, why wouldn't you go corporate?
To StrangePlanes - has your company returned to unlimited business travel? Wait till one of your C-suites is sitting in coach and an anti-masker (or any number of recent passenger misbehaviours) goes zonkers and the Captain asks for volunteers to restrain the individual. 10 years ago - did you hear as many stories about this? Ask any FA.


The point isn't that "no one will use" the product. As pointed out in this comment, flying private has a definite advantage in certain niches:

GalaxyFlyer wrote:
strangeplanes wrote:
I work for a company that does probably $10 billion in revenue a year. The work involves a lot of travel. No one flies private between cities. Top Execs visiting multiple cities in a single day take standard flights.

The only time a PJ is used is when there is a need to get to a remote site asap. Then they will charter a plane for the employees or execs to take. I see Delta owning Wheels Up as a win-win for Delta and staff.

Shower Thought: If Delta majority owns wheels up, then can we not consider wheels up staff, delta staff.


Quick question, if they needed to visit, say Cedar Rapids, Spokane and Pensacola, how would they do that in “one day”? Bizjets are not about the cost, but about saving time whether it’s for a technical repair team that needs to move now or execs visiting three remote cities in two days versus spending two additional days on connecting airline flights.


Those niches are not infinitely large, nor do they represent the majority of business travel. For one thing, many of us travel alone or with one other person most of the time. And in addition, a large volume of travel has adequate options on scheduled carriers. On the other end of the spectrum, there are some companies whose "travel force" spends so much time in out-of-the-way places that the most economical solution for them is ownership and operation of their own aircraft, which they can keep busy. There's a space for operations like Wheels Up, it's just naturally limited in size and does not have unlimited growth potential.
 
GalaxyFlyer
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 3:39 pm

Agreed small niche, but as a percentage of full fare F class passengers, perhaps important enough not to lose. I used fly for a large NY newspaper who owned at the time an extensive group of local radio stations and newspapers across the South. Quarterly, we’d spend a week with the V-P in Atlanta or NY, visiting 2 or 3 cities a day, just checking in. Fun trips and must have been useful to give up the Citation.

Much later I was asked about fitting out a normally luxurious large bizjet with vinyl and rudder mats. Seems the buyer needed a move tech repair teams around with their tools. A well known NE glass manufacturer wanted a Global fitted as a shuttle because of the planes runway performance esp in winter in places like Elmira, Erie, and the like.
 
2eng2efficient
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 3:44 pm

Costco used to have a deal where you could get a basic WheelsUp membership for ~$2k, about $1k less than the typical price. At that point you’d have access to a handful of private flights a year, at the typical run rate of $5k per hour on a King Air or perhaps a small jet.

For an affluent (but not obscenely wealthy) family of four living in a major East Coast metro and within two hours flying time of desirable vacation spot, I can see that sort of offer starting to look attractive, especially if you value the point-to-point, FBO experience.

WheelsUp is smart to continue partnering with big names in the “mass affluent” space (a real marketing term). Chubb personal insurance, JPM Private Client, etc. would all make sense as they continue to penetrate this market.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 3:53 pm

So what the majors are facing is "WheelsUP" on the top end and ULCC on the bottom. United is going to thread the needle going up "class". There was a time UAL and others operated "businessman" flights - now to be call "businessperson" . The problem with that is you still have to go thru TSA and the crowds at airports. Recall too that the airlines are trying to not give away so many upgrades and put paying passengers in those seats.

As GalaxyFlyer notes it won't be all business travelers but enough to make a difference to the bottom line.
 
GalaxyFlyer
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 3:59 pm

Tradewind, Planesense and SurfAir are also in this “mass affluent” space. Net Jets was first and has a huge fleet from Phenom 100 to Global 7500 flying internationally. Vista Jet also has card programs. It might be a niche but it’s pretty big, fully back to or larger than 2019.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 5:09 pm

As if on cue - Fed up with being cursed out and attacked, flight attendants speak out about unruly passengers
Here is a quote - "Amirzadeh has worked in the industry for six years, including through the pandemic, and said she’s never seen passengers behave this badly."

https://www.cnbc.com/2021/07/15/fed-up- ... ngers.html
 
Babyshark
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 5:26 pm

MohawkWeekend wrote:
The Russians probably thought training the Germans in the 30's was a good idea too.
It's ok right now for Delta the company and and it's shareholders. But I struggle to see where it's such a good deal for DL employees. Maybe this is where some of the premium passengers are going. If Wheels Up and it's competitors get really efficient, now the bar is lowered to use a biz jet vs buying for example 3 or 4 F tickets for a executive team or a rich guy's family.

Since they use other companies planes too, having more jets that companies have on the books might mean they'd be more tempted to use them when not being used by the brokers.

Time will tell.


there is a limited number of people with the net worth and income to afford $5000 per hour charters or card memberships.

The guy making $400-500k traveling multiple times a month, there’s more of those and that’s good money.
 
11C
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 5:46 pm

MohawkWeekend wrote:
As if on cue - Fed up with being cursed out and attacked, flight attendants speak out about unruly passengers
Here is a quote - "Amirzadeh has worked in the industry for six years, including through the pandemic, and said she’s never seen passengers behave this badly."

https://www.cnbc.com/2021/07/15/fed-up- ... ngers.html


Yes, these are bad times, but the economic realities don’t change because people are naughty cretins. It is apparent that you think this signals a major change in how people travel. Others don’t agree. I don’t think this changes anything either, but I guess we will have to wait for this to unfold, and adapt as necessary. Honestly, we had this discussion in the aftermath of 9/11, and yet, here we are.
 
Cubsrule
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 7:07 pm

Babyshark wrote:
MohawkWeekend wrote:
The Russians probably thought training the Germans in the 30's was a good idea too.
It's ok right now for Delta the company and and it's shareholders. But I struggle to see where it's such a good deal for DL employees. Maybe this is where some of the premium passengers are going. If Wheels Up and it's competitors get really efficient, now the bar is lowered to use a biz jet vs buying for example 3 or 4 F tickets for a executive team or a rich guy's family.

Since they use other companies planes too, having more jets that companies have on the books might mean they'd be more tempted to use them when not being used by the brokers.

Time will tell.


there is a limited number of people with the net worth and income to afford $5000 per hour charters or card memberships.

The guy making $400-500k traveling multiple times a month, there’s more of those and that’s good money.


Yeah, but the fact that folks can afford $5,000 per hour doesn't mean that they will. I'm right now at my in-laws' beach house in north Florida. We're about 45 minutes from JAX and 10 or 15 minutes from the local GA field. The "cost of admission" in this development is around $1MM and virtually all of the owners have multiple homes. I don't know a single person who charters in and out of here on a regular basis.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 8:30 pm

It would be interesting to see how many of these folks fly 1st class to their 2nd homes. Probably not many.

But somebody is using these types of outfits and those numbers are growing. And the more efficient these outfits get and the crazier passengers act on airliners the more customers will come over. DELTA thinks so. My point is - if 4 people were buying first class tickets and a "Wheels Up" flight is in the ball park cost wise - why would you ever fly commercial? The more in your group, the better the economics become for Wheels Up.

Wheels Up revenue surges 68% amid robust demand for private jet travel
Published Thu, May 20 20211:08 PM EDTUpdated Thu, May 20 20211:51 PM EDT
https://www.cnbc.com/2021/05/20/wheels- ... avel-.html

Private jet company Wheels Up reported a 68% jump in first-quarter revenue.

Active members grew 56% from a year ago, as growing wealth creation and pandemic fears continue to drive demand for flying private.
Private jet travel has recovered far more quickly than commercial airlines, as the wealthy flocked to private planes to avoid the health risks of airports and commercial flights.
 
dstblj52
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Re: "Wheels Up" Challenge to US Airline model

Thu Jul 15, 2021 10:34 pm

MohawkWeekend wrote:
It would be interesting to see how many of these folks fly 1st class to their 2nd homes. Probably not many.

But somebody is using these types of outfits and those numbers are growing. And the more efficient these outfits get and the crazier passengers act on airliners the more customers will come over. DELTA thinks so. My point is - if 4 people were buying first class tickets and a "Wheels Up" flight is in the ball park cost wise - why would you ever fly commercial? The more in your group, the better the economics become for Wheels Up.

Wheels Up revenue surges 68% amid robust demand for private jet travel
Published Thu, May 20 20211:08 PM EDTUpdated Thu, May 20 20211:51 PM EDT
https://www.cnbc.com/2021/05/20/wheels- ... avel-.html

Private jet company Wheels Up reported a 68% jump in first-quarter revenue.

Active members grew 56% from a year ago, as growing wealth creation and pandemic fears continue to drive demand for flying private.
Private jet travel has recovered far more quickly than commercial airlines, as the wealthy flocked to private planes to avoid the health risks of airports and commercial flights.

the health risk are a part of it but a lot of it is the less dense schedules are adding delays
 
IPFreely
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Re: "Wheels Up" Challenge to US Airline model

Fri Jul 16, 2021 12:21 am

strangeplanes wrote:
Shower Thought: If Delta majority owns wheels up, then can we not consider wheels up staff, delta staff.


Delta has been part-owner of many subsidiaries over the years. DGS, Argenbright, AirCo, and many others. Their employees were generally not "Delta staff" at least when it came to pay scales, profit sharing, insurance, pensions, and flight benefits.
 
DiamondFlyer
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Re: "Wheels Up" Challenge to US Airline model

Fri Jul 16, 2021 2:31 am

IPFreely wrote:

Delta has been part-owner of many subsidiaries over the years. DGS, Argenbright, AirCo, and many others. Their employees were generally not "Delta staff" at least when it came to pay scales, profit sharing, insurance, pensions, and flight benefits.

And that list doesn’t include the 121 carriers they have previously or currently own
 
packcheer
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Re: "Wheels Up" Challenge to US Airline model

Fri Jul 16, 2021 1:49 pm

I get why most of us are thinking about this from the Delta side of things...

Lets look at this from the Private Jet / GA travel side of things. There is a market for WheelsUp/NetJets/etc. Delta is expanding into a market segment they haven't previously been dominate in. If they succeed and are able to make this work, they don't need to move passengers back and forth between First/Business type seats and the private jet seats. It will certainly be a bonus they have, that many of the other charter groups won't have, but they should be able to succeed at it. The added bonus for Delta can be moving passengers back and forth and creating flexibility for customer, which, if successful, can help drive loyalty, which can be one way to help drive revenue/profits.
 
ScottB
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Re: "Wheels Up" Challenge to US Airline model

Fri Jul 16, 2021 3:11 pm

MohawkWeekend wrote:
"Amirzadeh has worked in the industry for six years, including through the pandemic, and said she’s never seen passengers behave this badly."


People are behaving in antisocial ways because they have been forced by governments to avoid socialization for over a year. When people aren't spending time around other human beings, some forget how to act in ways that are considerate of others. It doesn't help that people have gotten used to saying all manner of horrible things online -- and again, the lack of a visible human being across the table/room reduces the empathy which a decent person ought to feel.

MohawkWeekend wrote:
So what the majors are facing is "WheelsUP" on the top end and ULCC on the bottom. United is going to thread the needle going up "class". There was a time UAL and others operated "businessman" flights - now to be call "businessperson" . The problem with that is you still have to go thru TSA and the crowds at airports. Recall too that the airlines are trying to not give away so many upgrades and put paying passengers in those seats.


Fractional/on-demand private jets aren't going to ever be a large enough segment to threaten the major carriers. Pre-Check and a Delta Reserve Card (for the Sky Club membership) will get you around those hassles for $550/year. And most companies just aren't going to pay $5,000/hr to fly their employees around unless the mission is absolutely time-critical or those employees are in the C-Suite. Unless you are a CXO, your time just isn't that valuable.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Fri Jul 16, 2021 9:45 pm

I agree that the cost is still very high. But someone is using those fractional/on-demand jets because those companies are reporting a much quicker return to normal loads than the airlines are.

What happens if only 1 to 5% of high revenue passengers (business and rich folks) now go fractional because of the weirdness of today's airline travel experience? The Big 3 need those dollars badly - why else are they spending so much money to up grade that product?

I believe we'll know by the 4Q results (when government aid is gone) if those high rev passengers came back or are gone for good.
 
dstblj52
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Re: "Wheels Up" Challenge to US Airline model

Sat Jul 17, 2021 2:24 pm

MohawkWeekend wrote:
I agree that the cost is still very high. But someone is using those fractional/on-demand jets because those companies are reporting a much quicker return to normal loads than the airlines are.

What happens if only 1 to 5% of high revenue passengers (business and rich folks) now go fractional because of the weirdness of today's airline travel experience? The Big 3 need those dollars badly - why else are they spending so much money to up grade that product?

I believe we'll know by the 4Q results (when government aid is gone) if those high rev passengers came back or are gone for good.

their schedule advantage is still much bigger right now then it was in pre covid times with much denser schedules, some of that won't be coming back but i think much of it will as schedules fill back up, and the schedule advantage shrinks, although its become a option to compare in a lot of corporate pricing portals
 
FlyingElvii
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Re: "Wheels Up" Challenge to US Airline model

Sat Jul 17, 2021 4:44 pm

dstblj52 wrote:
MohawkWeekend wrote:
I agree that the cost is still very high. But someone is using those fractional/on-demand jets because those companies are reporting a much quicker return to normal loads than the airlines are.

What happens if only 1 to 5% of high revenue passengers (business and rich folks) now go fractional because of the weirdness of today's airline travel experience? The Big 3 need those dollars badly - why else are they spending so much money to up grade that product?

I believe we'll know by the 4Q results (when government aid is gone) if those high rev passengers came back or are gone for good.

their schedule advantage is still much bigger right now then it was in pre covid times with much denser schedules, some of that won't be coming back but i think much of it will as schedules fill back up, and the schedule advantage shrinks, although its become a option to compare in a lot of corporate pricing portals

That is the key, offering GA as an option along with airlines. They will certainly find that GA is a better fit in some instances, even if it costs more, to save a connection over ORD or ATL, etc, and get closer to the actual destination.

Don’t forget, without yet another subsidy extension, the payroll program ends in September. This will force a good amount of “right-sizing” among the big 4, further cutting travel options for critical staff.
 
FlyingElvii
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Re: "Wheels Up" Challenge to US Airline model

Sat Jul 17, 2021 4:56 pm

MohawkWeekend wrote:
I agree that the cost is still very high. But someone is using those fractional/on-demand jets because those companies are reporting a much quicker return to normal loads than the airlines are.

What happens if only 1 to 5% of high revenue passengers (business and rich folks) now go fractional because of the weirdness of today's airline travel experience? The Big 3 need those dollars badly - why else are they spending so much money to up grade that product?

I believe we'll know by the 4Q results (when government aid is gone) if those high rev passengers came back or are gone for good.

Movement to GA has gone in waves, starting with the introduction of fractional ownership in the mid 90’s. Remember that the loss of premium pax to GA was considered one of the primary factors in United’s 2002 bankruptcy.

Now, another generation of decision makers has been introduced to GA, and like before, many will find the convenience beats the price. Go to any big-city airport FBO on a Friday, and you can see it for yourself. Anecdotally, I know of at least one small company locally that still traveled in the last year, has found it so convenient that they purchased a TBM for company use. The reasons why are starkly obvious, and they are in a city, Nashville, that has numerous commercial options.

Given the ongoing and seemingly endless political and liability issues, I can see this growing exponentially as corporate travel resumes.
 
FlyingElvii
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Re: "Wheels Up" Challenge to US Airline model

Sat Jul 17, 2021 5:05 pm

ScottB wrote:
MohawkWeekend wrote:
"Amirzadeh has worked in the industry for six years, including through the pandemic, and said she’s never seen passengers behave this badly."


People are behaving in antisocial ways because they have been forced by governments to avoid socialization for over a year. When people aren't spending time around other human beings, some forget how to act in ways that are considerate of others. It doesn't help that people have gotten used to saying all manner of horrible things online -- and again, the lack of a visible human being across the table/room reduces the empathy which a decent person ought to feel.

MohawkWeekend wrote:
So what the majors are facing is "WheelsUP" on the top end and ULCC on the bottom. United is going to thread the needle going up "class". There was a time UAL and others operated "businessman" flights - now to be call "businessperson" . The problem with that is you still have to go thru TSA and the crowds at airports. Recall too that the airlines are trying to not give away so many upgrades and put paying passengers in those seats.


Fractional/on-demand private jets aren't going to ever be a large enough segment to threaten the major carriers.


It doesn’t have to be a huge move. Remember, it is far easier to find 1 person who will pay $1,500 for a trip, that it is to find 10 people paying $150. Now add in all of the associated costs.

For most people in the upper income strata, in places that don’t have thirty daily flights with premium to peak destinations, once they have experienced the convenience of GA they will always look at it as an option from then on. Even if they have to pay the difference out of pocket.

The biggest failing on A.net, imho, is the ongoing belief that things are just going to magically and instantly snap back to normal. It isn’t, not for a LONG time. And you must take that into account.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Sun Jul 18, 2021 2:02 am

COVID-19 may have been the event that sets in motion the real bifurcation of the market that people have been expecting when fractionals first appeared . With increasing COVID cases, this just reinforces their business case again.
 
blooc350
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Re: "Wheels Up" Challenge to US Airline model

Sun Jul 18, 2021 5:31 am

GalaxyFlyer wrote:
Tradewind, Planesense and SurfAir are also in this “mass affluent” space. Net Jets was first and has a huge fleet from Phenom 100 to Global 7500 flying internationally. Vista Jet also has card programs. It might be a niche but it’s pretty big, fully back to or larger than 2019.


NJA doesn’t have the Phenom 100. They have the Phenom 300.
 
commpilot
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Re: "Wheels Up" Challenge to US Airline model

Mon Jul 19, 2021 12:27 pm

WheelsUp was founded to pick up the void in the fractional market left by the fraud company Avantair when it finally collapsed. WheelsUp was heavily backed with money and continues to snatch up companies to fill their own backlog like Netjets has with EJM. WheelsUp is abusing their King Air pilots and basically hiring a warm body for the right seat to just be legal. The days are super long and no real prospect from the King Air to the jets.
 
flipdewaf
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Re: "Wheels Up" Challenge to US Airline model

Mon Jul 19, 2021 1:18 pm

I have only scanned this thread but its certainly a very interesting concept to me. Whilst the c-suite guys may already have a handle on the corporate flying gig Covid-19 has put a different dynamic to flying for the "boots on the ground" like me. The person flying on their own dime may well be looking for that added piece of mind to not have to spend time in a crowded airport and arrive closer to their destination/leave from closer to home but for the person flying on the dime of the corporate multinational has different priorities as does the multinational. Covid-19 has brought about the real need and expectation for corporate travel to not only be assessed from a straight cost perspective but also needs to be assessed from a health and safety risk assessment safety perspective (certainly in the UK where I'm based). I have never had to weight up the pros and cons of making a trip and weighted that up against the costs, the trip is always decided its needed then reasonable fares sought from the booking engine we use. The success of the enterprise for me is how well it is integrated with existing booking systems such that when I book travel to a specific destination the fares for the shorter time and private charter segment are brought up together with the standard, the day when the 'dedicated employee' gets ill from waiting in an airport or crashes a hire car when tired when the corporate entity wouldn't spend an extra 3k from their 2b profit is a day too late to let their employees/safety folks have a say.

-Make it easily integrate on corporate booking systems so that the lowly employee can see the price and justify it.

Fred
 
Ahmad310x
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Re: "Wheels Up" Challenge to US Airline model

Mon Jul 19, 2021 2:14 pm

Last summer when things first started to ease with travel restrictions, all the major fractional/charter operators said they were seeing record demand from first time private aviation clients. I think this would have been the people that had historically only used airlines and were your first class buyers. Time will tell if they stick to private for the long term but in the near term there is plenty of data that shows private flying is through the roof right now. Take a look at the stats from FlightAware in the link below, "Business aviation traffic" up 45% over 2019 levels. That quite a jump, and its backed up by news last week that Netjets cannot support demand for their smaller, entry level aircraft in their fleet, so they have stopped selling shares in those aircraft. How long this will continue, who knows but its clear the high net worth individuals are traveling and it seems more than ever.

Stats (Biz Av at bottom): https://blog.flightaware.com/aviation-s ... e-7-7-2021
Netjets article: https://www.corporatejetinvestor.com/ou ... sales-123/
 
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FlyingJhawk
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Re: "Wheels Up" Challenge to US Airline model

Mon Jul 19, 2021 2:16 pm

MohawkWeekend wrote:

I've flown both - including sitting in the back of a Lear 35 on the hump seat during a full flight. FYI you hit your head on the ceiling during bumpy flights.

But you can't beat the FBO experience of no TSA, no packed waiting areas and certainly not mingling with some of the passengers that are flying today. Unless airlines pull out the Concorde model - separate check-in, concierge service and upgrading all F class service (not just LA-NYC), I would take GA all day long.


Same here at previous company. Once one starts to fly corporate jets the best F service on a commercial carrier doesn't come close in terms of convenience and the overall hassle-free nature of this kind of flying.
 
FlyingElvii
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Re: "Wheels Up" Challenge to US Airline model

Mon Jul 19, 2021 2:39 pm

Delta is giving Skymiles for WheelsUp spending, and it counts toward Medallion status. That is a huge deal, as well.
No, this isn’t for the single traveler, but the benefits begin to outweigh risk when you start talking about multiple travelers, and hub avoidance.
 
FlapOperator
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Re: "Wheels Up" Challenge to US Airline model

Mon Jul 19, 2021 4:28 pm

FlyingJhawk wrote:
MohawkWeekend wrote:

I've flown both - including sitting in the back of a Lear 35 on the hump seat during a full flight. FYI you hit your head on the ceiling during bumpy flights.

But you can't beat the FBO experience of no TSA, no packed waiting areas and certainly not mingling with some of the passengers that are flying today. Unless airlines pull out the Concorde model - separate check-in, concierge service and upgrading all F class service (not just LA-NYC), I would take GA all day long.


Same here at previous company. Once one starts to fly corporate jets the best F service on a commercial carrier doesn't come close in terms of convenience and the overall hassle-free nature of this kind of flying.


Honestly, a 500-1bn revenue company that doesn't at least have a good relationship with a local charter provider, let alone its own aircraft and any kind of distributed production/revenue stream likely doesn't account for the time value of their C suite at the least.
 
ScottB
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Re: "Wheels Up" Challenge to US Airline model

Mon Jul 19, 2021 4:57 pm

FlyingElvii wrote:
It doesn’t have to be a huge move. Remember, it is far easier to find 1 person who will pay $1,500 for a trip, that it is to find 10 people paying $150. Now add in all of the associated costs.


It's not really the difference between $150 and $1,500, though, is it? It's the difference between $150 and $15,000. Moreover, I don't agree that it's easier to find one person paying $1,500 vs. ten paying $150, and legacy carrier seat layouts bear that out. On mainline domestic aircraft, the F section is typically 8-10% of total capacity, and typically there are several loyalty upgrades sitting in F. So demand for paid domestic F (outside of a handful of routes at peak times) is well under 10% of total seats, although it does punch higher in a revenue basis as prices are higher.

Ahmad310x wrote:
Time will tell if they stick to private for the long term but in the near term there is plenty of data that shows private flying is through the roof right now. Take a look at the stats from FlightAware in the link below, "Business aviation traffic" up 45% over 2019 levels.


I would expect that's partly tied to the fact that very few people are traveling internationally right now. If you would ordinarily drop 20 grand on business class tickets to the French Riviera, but you're heading to the Vineyard or Aspen this summer instead, maybe you spend that money to go private this year.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 2:26 am

Every new variant of COVID-19 strengthens the GA model and hurts the airlines.
Now if someone could figure a way to put a bathroom on a Cirrus Jet then ........
 
GalaxyFlyer
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 1:52 pm

For the price of a Cirrus Jet, one could buy quarter share of a Challenger at NTT and have all the speed, range and lav service they needed. By the way, plenty of private Jets are flying internationally.
 
FlapOperator
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 2:48 pm

GalaxyFlyer wrote:
For the price of a Cirrus Jet, one could buy quarter share of a Challenger at NTT and have all the speed, range and lav service they needed. By the way, plenty of private Jets are flying internationally.


Interestingly, in my hometown, the Fortune 500 company has its own flight department for company operation, and lots of the c-suite/ex officio board and major shareholders maintain their own aircraft next door to the corporate flight department.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 2:51 pm

I was thinking fractional ownership/on demand of a Cirrus Jet. At $2 mil with a single pilot and a parachute. Hardly burns any fuel. Way cheaper than PC-12 and Denali. Better ride than those and the Meridian. Uber for the near rich and business types!
 
GalaxyFlyer
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 2:57 pm

MohawkWeekend wrote:
I was thinking fractional ownership/on demand of a Cirrus Jet. At $2 mil with a single pilot and a parachute. Hardly burns any fuel. Way cheaper than PC-12 and Denali. Better ride than those and the Meridian. Uber for the near rich and business types!


For $2 million, I’d much rather fly in a Part 25 plane operated by two ATP pilots.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 2:58 pm

Well there goes my business plan.......

While true, as a commenter mention up thread some of the co-pilots flying King Air's are pretty green. Maybe go with the parachute in the Cirrus?
 
GalaxyFlyer
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 3:08 pm

Compare the safety record of King Airs to, say, the Citation Latitude or Challenger 300. The Latitude has one hull loss (Earnhardt) and with coming on 900 deliveries the Challenger hasn’t yet had a hull loss. VLJ’s record isn’t anything to write home about, either.
 
MohawkWeekend
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Re: "Wheels Up" Challenge to US Airline model

Tue Jul 20, 2021 3:24 pm

Interesting article in the "Robb Report" - the mag and web site for rich folks

"The Cirrus G2 Vision, the World’s Most Popular Jet, Can Fly You Home With the Push of a Button"

https://robbreport.com/motors/aviation/ ... 234602832/

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