In Las Vegas, when it comes to conventions, one of the changes that’s constant are the badges.
On Thursday, as I walked through the lobby of the Wynn, it was filled with lanyards indicating the wearers were attending the National Business Aviation Association’s annual Business and Aviation Conference, known as BACE.
By Friday, the name tags were for something else, from companies selling electronics to medical devices and chemicals.
These conventioneers had no idea that the over 20,000 folks attending BACE, most of whom had just left, play an important role in helping their industries succeed.
However, 10 business aviation groups hope a new campaign launched last week will start correcting some misinformation about private jets. Per Climbing.Fast, its goal is “setting the record straight on the industry’s many societal benefits, including its leadership role in sustainability.”
Its website points out, “Business aviation plays an essential role in creating economic opportunity, connecting communities and fostering innovation.”
It notes the industry has committed to being carbon neutral by 2050, and it highlights that business aviation is an incubator for sustainability advances such as winglets and composites that ended up being used for those big airplanes, we all jam into.
The group’s mission may not be impossible, but it’s certainly difficult.
Most of the news items I saw about private jets over the past few days were that Prince Harry and Meghan Markle had been spotted boarding a Dassault Falcon 7X heading to the Caribbean after roll of the drums, speaking at Project Healthy Minds, where, per the Daily Mail, part of the agenda was about how climate change is having an adverse effect on young people.
The connection of
private aviation to those conventioneers in Las Vegas from other industries is often missed, sometimes intentionally.
Business aviation supports over 1.2 million U.S. jobs and drives nearly $250 billion into the economy annually.
During BACE, Honda Aircraft Company noted it will spend over $50 million to expand its manufacturing facility in Greensboro, North Carolina, creating 280 new jobs, as it begins product of a new long-range light jet.
Earlier this year, NetJets, the largest operator of private jets in the world, said it would buy as many as 1,500 airplanes from Textron Aviation and another 500 from Embraer, supporting jobs from Wichita, Kansas, to Florida’s Space Coast.
On a smaller scale, Memphis-based charter operator AB Jets placed an order for three of Bombardier’s Challenger 3500s, with an option for a fourth. The deal supports jobs in facilities across Mexico, the United States and Canada.
Many of the flights by private jets – and turboprops – that detractors pan are, in fact, to rural communities and places without reliable airline service (there’s a joke in there somewhere), greasing the skids for hundreds of different industries and thousands of companies.
In defense of Harry and Meghan, they were flying to a place without scheduled airline flights.
Getting there would have necessitated flying commercially to Barbados and then chartering an aircraft to the airport on Canouan, where the economy that employs its 1,700 local residents is heavily dependent on high-net-worth visitors who stay at the resorts or own homes there.
Enough of them arrive privately that the runway there was extended 3,455 to 5,875 feet several years ago to accommodate larger aircraft that can reach the U.S. and Europe.
I’ve been to Canouan twice. At least three hotel groups I know of have failed to make a go of it, mainly due to a lack of regular airline flights.
Fact: 42% of private jets are flown to towns with little or no airline service.
One bit of news that won’t get much play outside of trade media was Tuesday’s announcement that the State of North Carolina is providing a $30 million grant to build a pilot training facility and headquarters for flyExclusive at Kinston Regional Jetport, an airport with a long runway and despite the inference of its name, has no scheduled airline flights.
flyExclusive is the fifth-largest private flight operator in the country.
It has already built two hangars to house an extensive MRO business that employs over 100 highly skilled technicians.
Because of flying rich folks and business executives to places like Palm Springs, Palm Beach and more often less notable destinations, it has created over 400 jobs in the community since being founded in 2014.
To demonstrate the challenges Climbing.Fast. faces, in one of the state’s most economically depressed counties, even local media isn’t appreciative.
Last December, after realizing it had hired too fast in several areas, the company eliminated some of the new positions. The local newspaper story read, “flyExclusive lays off at least 50 employees two weeks before Christmas.” The Grinch has an easier time with the media than business aviation.
I’ve been to Kinston twice. It’s not easy to reach. You fly to either Raleigh/Durham, which has a good number of airline flights, mostly hub connections, and then drive around 100 miles, or you can fly to New Bern, which only has a few flights, only via hubs, but is just 40 miles away.
On my last trip there, after my flight from New Bern, the opposite side of Kinston from Raleigh, was canceled; I had to Uber back to RDU, staying overnight before I could get back to Miami.
What would have been about 90 minutes nonstop on a private jet took more than 24 hours.
Fact: S&P 500 companies that use business aviation outperform those that don’t by 70%
Climbing.Fast. points out aviation globally accounts for just over 2% of carbon emissions, and private jets are just 2% of that 2%.
Nevertheless, the industry is a lightning rod for environmental activists.
At the European version of BACE held in May, protestors vandalized a display of private jets, shutting down the airport in Geneva for several hours and causing a number of flights to be diverted. The climate protestors have recently been giving private jets free paint jobs.
The point climate activists make is that while the carbon emissions of private jet travelers are minuscule, on a per-person basis, they are exponentially higher.
The part they leave out is how much economic impact the occupants of private aircraft have.
Research I have been involved with shows that the average private jet arrival brings about $90,000 in spending to the places they land, excluding fuel and airport services.
Back during the Great Recession, I was editor of a magazine distributed aboard private jets. I wrote a column supporting Steve Schwarzman’s decision to go forward with a multi-million-dollar birthday party despite masses of layoffs.
My point was if rich people keep their money in the bank, it doesn’t help anyone except the bankers.
Specifically, the people who benefit most from such lavish spending are less the guests than the caterers, the florists, the black car drivers, the folks who provision the caterers, the off-duty cops who pay their kids’ college tuition by doing security, and so forth.
I was subsequently interviewed by NPR, where the host made light of the fact I was “working hard” in Acapulco. I happened to be attending a conference, and I happened to be working. However, taking vacations is, in fact, an industry called travel and tourism that, prior to the pandemic, supported about 10% of all jobs worldwide.
It’s the same challenge private aviation faces. Detractors, when confronted with facts, prefer ad hominem attacks.
Luckily for them, private aviation is still very much a niche. It’s estimated there were only around 100,000 regular private flyers in the U.S. before Covid.
At the start of the pandemic, McKinsey estimated that less than 10% of individuals who could afford to privately were doing so.
The good news is of those who started flying privately after the start of Covid, 95% are continuing, including 40% on a regular basis.
On Tuesday, I had a chance to sit down with George Mattson. He’s the new CEO of Wheels Up. The former Goldman Sachs banker and IBM executive left his seat on Delta Air Lines board to take the job. He is tasked with bringing the private jet flight provider to profitability. Last year, it was losing over $1.5 million per day. In Q2, excluding a one-time external charge, it had cut those losses to $1 million per day.
He comes along with $500 million from a Delta-led investor group that saved it from a likely bankruptcy and probable shutdown that would have left many of its 12,000 members as unsecured creditors. It would have also meant pink slips for some 3,000 employees.
Mattson brings the directive from Ed Bastian to make it work. The Delta CEO believes that having private aviation in a post-Covid world is critical to the Atlanta-based airline’s premium offerings.
A key piece of the strategy is selling Wheels Up flights to Delta’s extensive roster of corporate accounts. For Wheels Up (and its investors), the hope is by generating more flights on Tuesdays, Wednesdays and Fridays; it will balance the current 90/10 mix of leisure flyers who travel primarily Fridays, Sundays and Mondays.
It could also be a gift for the industry. Even before the rescue financing deal closed, Delta and Wheels Up launched a collaboration of sponsorships on Monday Night Football and college football on ESPN and CBS.
While Wheels Up was often criticized in the industry for its celebrity-laden marketing, in 10 years, it built the largest membership of any private aviation flight provider with consideration only equal to entrenched market leader NetJets.
Those marketing activities are likely no longer in the budget. However, new Chief Customer and Marketing Officer Kristen Lauria says the door is open to tapping into Delta’s even more robust marketing platforms. That ranges from access to VIP suites at major sports stadiums to its sponsorship of the Olympics.
Mattson says a portion of the companies Delta’s sales force is setting meetings with are not current users of private aviation.
In other words, Delta, with over 100 million SkyMiles members, could be helpful in recruiting new users.
That doesn’t necessarily mean there will be a flood of converts like those first months of the pandemic when private aviation filled the gap left by the airlines and served a vital role in transporting masks and other medical supplies.
Fact: Private jets are used for around 15,000 relief flights each year.
On Friday at the Wynn pool (where I was not working) I chatted with a pair of real estate developers from Chicago. Private aviation is always a good conversation starter, and I showed them my Vaunt subscription that enables me to fly on empty-leg repositioning flights for free.
When they asked how much it would cost to fly on a confirmed basis to Las Vegas, and I told them $30,000, it was clear they weren’t ready to climb aboard.