After awarding a Dodge Viper to a top performer, management at IBM's Tivoli Systems division started looking for something even more spectacular to fire up the sales troops. An idea took flight: The Austin, Texas, software developer presented two outstanding team members with debit cards worth $50,000 in private jet time, which the winners were free to use as they pleased with their families, friends, and business associates.
“I went to one of the kickoffs, and people were just blown away because they hadn't heard of anything like it,” says Paul A. Svensen Jr., vice president of sales for Executive Business Jets, Norwell, Mass., on whose charter network the Tivoli incentive winners will fly.
Privately chartered jets, long a perk reserved for CEOs, entertainers, and other VIPs, haven't exactly become mainstream, but debit cards and fractional ownership have spawned a broader audience. Private flights have grown 25 percent annually for the past five years, according to the National Aviation Transportation Association. And, says Svensen, debit cards have become an increasingly popular way for companies to inspire and reward top performers.
The September 11 terrorist attacks only underscored the security and convenience advantages that private carriers offer over commercial airlines. Since September, “there has been a great increase in interest because of the secure nature of charter,” says Donna Clark, director of U.S. sales, meetings and incentives, for Flight Time International in Waltham, Mass. “Our requests and bookings have increased dramatically.”
One Los Angeles company has two board members living on the East Coast who must travel west for meetings four times a year. Before September 11, they flew on commercial airlines. “After September 11, they said, ‘If you want me at the meeting, you'll have to fly me in privately,’” says Alan Clingman, CEO of Marquis Jet Partners, which offers a jet card in conjunction with NetJets Inc.'s fractional plan. “The company just gave each of them a 25-hour card.”
Don't Make Me Wait
The most compelling reason for chartering a plane or jet is being able to get from point A to point B as easily as possible — on as little as two hours' notice. Charters make hard-to-reach destinations in small cities and the Caribbean, for example, more accessible. They also allow multiple stops that probably wouldn't be workable via scheduled service. “Suppose I wanted to do a trip with a stop in Cleveland, Chicago, and Lexington on the same day to do business. Could I do that commercially? Impossible. Privately? Yes,” says Kevin Russell, senior vice president with Woodbridge, N.J. — based NetJets Inc. Advance check-in alone — as much as two hours for scheduled flights — would eat up most of the day. Private aircraft customers can show up 15 minutes before a flight.
Similarly, charter flights can help facilitate convening a far-flung group in one location. Elaine Taylor, manager of transportation planning for Carlson Marketing Group Travel in Minneapolis, says charter is a natural choice for a company such as Cisco Systems. The San Jose, Calif. — based technology giant schedules a variety of regional programs, with participants traveling from nearby states.
Charters can also cut down on hotel costs. Taylor recently was mulling charter options for an incentive group traveling to St. Lucia in order to avoid an overnight stay in San Juan.
Costs for ground transportation can also be controlled. “If the group arrives and departs at the same time, it saves money on transportation because you don't have people straggling in,” says Suzanne Bailey, a senior planner with U.S. Motivation in Atlanta.
The Personal Touch
Unlike the cookie-cutter service of a scheduled flight, a charter offers clients the ability to customize the experience. All-first-class seating, special refreshments, and open bars are just the beginning. For the 100th anniversary of PepsiCo a few years ago, Flight Time made sure the four wide-body aircraft that carried 1,400 passengers to Kona, Hawaii, were stocked with only Pepsi products. For overnight flights, some carriers offer passengers their version of turndown service.
But charter in-flight service can be bumpy, too, so it pays to check out the carrier thoroughly. Bailey recalls some clients complaining about flights with no liquor aboard and too-few meals.
Generally, charter passengers know each other, so the atmosphere is more convivial than on a scheduled flight. Seat control isn't an issue, so spouses and chums can sit together, or if necessary, executives can get down to business. “Meetings can start on board the aircraft because it's theirs,” says Flight Time's Clark.
With CEOs and high-profile celebrities as clients, major charter providers have long understood the need for security. “You can literally control everybody and everything getting on that plane,” says Taylor. “You can even hire additional security to fly with the group,” something she has heard requested more frequently in recent months.
Svenson says clients traveling overseas can arrange for bomb-sniffing dogs and round-the-clock security for the plane. But he agrees with Taylor that tampering is much less likely with a business carrier because “not so many people are getting on and off the aircraft; even the catering people don't get on board.”
Companies have several options for hiring private business carriers, ranging from a simple, one-time charter, to fractional ownership, to membership or debit programs.
Clingman at Marquis Jet Partners compares one-time charters to standing on a street corner and hailing a cab. This is often the most expensive option, and the cost depends on the equipment, number of passengers, flight time, fuel, landing and ramp charges, waiting charges, and other factors. For example, a typical trip from New York City to The Greenbrier Resort in White Sulphur Springs, W.Va., would cost roughly $34,000 for 50 people traveling Monday through Thursday. The price includes a 24-hour duty officer, flight-support team, automatic additional insurance, flight delay coverage, standard food and beverage service, ramp-side check-in, and taxes.
Fractional ownership, credited with opening up private aviation to a larger audience, is comparable to a real estate time share. Owners purchase a 1/16th share of an aircraft, which guarantees them access within a few hours to a certain class of aircraft for 50 hours each year. But prices starting at around $400,000 per share are steep.
Enter membership programs, which allow purchasers to buy debit cards for smaller chunks of time but which still offer last-minute booking capability. The Marquis Private Jet Card and the Executive Business Jets' eBizJets Travel Card, for example, start at $100,000 for 25 or more hours.
Are You Covered?
It's best to read the fine print about corporate credit card coverage before assuming that insurance will kick in should there be an accident on a charter flight.
Until February, American Express covered corporate cardholders in such instances. But when that policy came up for renewal, “We started researching the cost of buying the coverage and found it had quadrupled since September 11,” says Melissa Abernathy, a spokeswoman for American Express Corporate Services, based in New York City. So, along with nuclear, biological, and chemical hazards, American Express now excludes charter flights.
The American Express decision may not affect your group: The Air Charter Guide estimates that only about 16 percent of all charter flights involve some form of credit card payment. But it does underscore the importance of asking questions about insurance up front.
“Some companies will only cover you for the cost of the charter, which means that if you have a flight that costs $15,000, you will have $15,000 of insurance,” says NetJets' Russell. He says that a reputable carrier should offer coverage at much higher levels.
A Charter Checklist
For the novice charter customer, a good place to start is The Air Charter Guide (www.aircharterguide.com), which covers pricing, booking, and other charter basics.
Check for an FAA certificate number, which shows an airline is authorized to offer charter flights.
Determine who owns the aircraft. A company that owns its own fleet can control maintenance, servicing, and pilot training.
Make sure an FAA-authorized facility or the manufacturer maintains the craft.
Ask how often planes are serviced. Typically, private jets are out of commission two to three months a year for servicing.
Find out what kind of training pilots have undergone; a typical minimum is 12 days. Also important: How many flight hours a pilot has in the specific type of aircraft — the more, the better.
What is the carrier's safety record? The FAA or Breiling and Associates (www.breilinginc.com) can provide information. Find out if the FAA has ever fined the carrier or suspended its license, and why.
Determine whether personnel have been adequately screened with drug tests, background checks, and other methods.
Check the company's insurance coverage.
American International Airways
American Trans Air
CSI Aviation Services
Delta Air Lines
Executive Business Jets
Flight Time International
Miami Air International
North American Airlines
Sun Country Airlines