“My budget went from $15 million annually to $2 million — yet senior management, our sales force, and engineering teams still needed a private jet at their beck and call. I had no idea how I was going to stretch that budget to meet the demand,” explained a frantic Elizabeth Vanderwall, travel manager for a San Francisco-based security consulting company. “I was forced to get very creative and consider all of the alternatives.”
Until July of last year, Vanderwall had a Lear 35 and a Challenger 601 in her flight department. Due to the current economic downturn and increasing pressure from the shareholders, the flight department was disbanded and the aircraft were sold off. Vanderwall was forced to turn to scheduled airlines to move her people. This led to unforeseen difficulties for her and the company. “The employees traveling were uncomfortable and unable to work enroute as they had become accustomed when on board our own jets.” Additionally, in order to keep expenses under control, a Saturday overnight was required. This led to low morale and lower productivity.
She’s not alone; many corporations once accustomed to a fleet of company jets and/or fractional leases have had to alter their flight plan. Ironically as mass layoffs, the tanking stock market and a presidential mandate to prepare for biological terror put a nation on edge, many US corporations are demanding increased production with fewer people, tighter budgets, and seemingly less time.
And if companies are looking to save time, it’s obvious commercial flights are not a travel option for their teams. A minute-by-minute analysis of passengers traveling weekly on private aircraft versus public alternatives reveals they can add a month annually to their lives—time previously just chalked up to the cost of doing business.
One saving grace for frazzled travel managers is the “on-demand” charter market. As the name suggests, the term on-demand implies that the aircraft is always available for whatever mission on that particular customer’s demand. “We use the term on-demand to differentiate from fractional and membership driven programs since we are not selling blocks of hours or fractions of aircraft, but chartering the whole aircraft on an as-needed basis, at a competitive price,” explains Kevin Godlewski, President of Boston-based Executive Charter Services (ECS).
Many flight departments and travel managers who operate their own fleets typically use on-demand for supplemental lift-when their planes are not available. However, with shrinking budgets and fleets, several are re-evaluating the benefits of having a strategic partner that is willing to do the leg-work to find the plane you want at the price you need. “Savvy travel managers are discovering the benefit of on-demand private air charter- the same benefits of other programs but with no up front cost or capital expenditures,” explains Godlewski. “Lately, we are the first and only call they need to make.”
With increasing levels of excess one-way inventory on the market, ECS is able to provide clients with competitive pricing comparable to membership programs. Whether it’s a turbo prop or a Gulfstream, the passenger can call ahead with as little as four hours’ notice and secure travel arrangements. It appears to be the best of all worlds in terms of private charter. In fact, a recent survey of those who fly 50 hours or less a year and have tried fractional and membership driven programs concluded that 63% now rely on the cost savings and efficiencies of on-demand charter.
“I just assumed it would be more expensive and to be honest I didn’t think we’d get the same level of service—-boy was I wrong,” confesses Vanderwall. “Now we use ECS to facilitate our bi-weekly trips from our Headquarters in San Francisco to our development plant in New Jersey. They handle everything from special requests and catering to ground transportation. They always make me look good.”
Vanderwall typically has a group of anywhere between 5 and 12 employees ranging from senior management to junior software engineers who need to travel from company HQ in San Francisco to the software development facility in Rockaway, NJ. Because they utilize a private aircraft, the senior managers can review the strategy for their meetings and the engineers can discuss the best way to solve the various developmental issues that invariably arise when creating cutting edge technology. The group is usually on the east coast for 2 days, sometimes 3, but always in the middle of the week so that the employees’ home lives are not adversely impacted.
Although Vanderwall does not have access to her own aircraft, she feels as though she has even more flexibility by utilizing on-demand Charter with ECS. “Before, I was forced to schedule trips to the east coast around the availability of our jets. Also, if only the Challenger was open and we just had 3 passengers, the Challenger went – not the most cost effective alternative. Now, I can make one phone call, give the details of my itinerary, and be assured that I will have the appropriate aircraft ready to go whenever I decide.”
While the short-term outlook for many companies can hardly be called upbeat, better times are on the horizon. Those who continue to use private charter will likely get there before the rest. Additionally, the combination of lower-costs, higher accessibility, and willingness to spend more time to make a trip happen, companies like Executive Charter Services offer a bright future for travel managers.
