Perception versus reality

The public image of the private jet has taken a hit over recent months. Commerce seeks out the true costs of flying privately.

While doom, gloom and public outrage seems to colour recent reportage over corporate seniors and their use of private aviation, key players in the private aviation sector remain decidedly upbeat. Blind faith? Blinkered naivety? Not at all, according to Royal Jet, the international luxury flight services company headquartered in Abu Dhabi; there is, in fact, real value to be found in executive travel and the outlook for the industry is bright.

Life in the Middle East can be a little different to life elsewhere. True, there has been a slow down in activity within the private jet market, but nothing like to the same levels as found in Europe. This is, in part, due to the high levels of liquidity sloshing around the region; but also because of the realisation that private aviation is more than just a luxury perk for the rich or company elite – it’s often a necessity which makes absolute business sense.

Productivity is a critical factor in determining the success of virtually all profit generating organisations and private aviation can enhance the productivity of a company's two most valuable assets: people and time. In the age of rationalisation, senior executives’ expensive time is being optimised and companies are starting to attach more value to the time their senior employees spend travelling.

Say, for instance, an executive fails to arrive in time for a crucial meeting, this will disrupt the work of a large number of people and perhaps even the outcome of an important deal. What may look like a simple trip can rapidly become a very costly exercise in frustration. “People are finding it more and more treacherous to get from A to B, not least because the hub-and-spoke system breaks down very quickly,” says  Royal Jet’s President and CEO, Shane O’Hare.

For many, private aviation is simply a way of getting from A to B in a manner which amplifies one’s efficiency, with a high degree of privacy and personal security. By the same token it's not without its fair share of luxury. "Perhaps the largest appeal of private aviation is that it’s not commercial aviation; it avoids the drudgery, rigidity, inefficiency, inconvenience and even humiliation of modern commercial carriers and airports,” O’Hare adds.

The consensus amongst many company seniors (and their accounting departments) is that private aviation is a cost-effective and frequently necessary business tool. Just as a computer is used in business to improve productivity, so too is a private jet. This could simply be company employees commuting to remote work locations in the most economical way possible; or strategic trips that could include closing a last minute deal on a contract or making an important sales call on a customer. It could even include a medical evacuation flight to transport an injured employee to a location for better medical treatment. 

So, we sat down and looked at the maths behind it all using a private banker as an example. A fairly senior private banker earns as much as $276,500.00 per year. The bonus for a wealth manager can surpass their basic salary package but we won’t include a possible bonus here and, while we’re at it, let’s further conservatively assume that this number includes the total of all the items listed above as part of the pay package.

We then broke that cost of $276,500.00 per year down to a cost per hour and again we must make some assumptions. Out of a 12 month calendar year the employee probably only works ten months when you account for vacation time and all holidays throughout the year. (This is negotiable in your own computations.)

Ten months out of the year, four weeks per month, at 40 hours per week, equals 1600 hours worked over the entire year.$276,500.00 divided by 1600 hours equals $173.00 per hour in Executive Time Cost (ETC).

We must now estimate what the individual company determines to be Executive Time Value (ETV). ETV can be viewed as a mathematical function similar to ROI. Unless there was a unique, underlying reason, you probably wouldn’t invest in a piece of capital equipment that only generated the return of its cost. If that piece of machinery does not generate increased value, why bother with it? If our sample employee only generates $173.00 per hour worth of value back to the company that employee is not productive and should perhaps consider career counselling. Remember though that value is not just determined by cash generated by that employee. The function of an employee might be to generate ideas or expedite the flow of administrative functions to conserve costs.

Executive time value varies with the level of all employees within a company. Ratios of value range from 1.5 x 1 for low level employees up to, perhaps 10 x 1, or even more, for Chief Executives. A Human Resources Department should be able to rank the levels of employees in a matter that is reasonable for your specific calculations.

Assume our $276,500.00 employee has a value ratio of five, meaning that his value per hour to the company is 5 times his cost to the company. ($173.00 x 5 = $864.00 per hour.)

Now that we have a dollar figure to use in computing travel costs let’s look at what might be a typical business trip requirement here in the Gulf.

Abu Dhabi to Riyadh for a 2:00 hour meeting at 10:00 AM.

* Because of the privacy available on a private airplane this time can be as productive as normal office hours. Last minute tactical planning can be considered prior to a meeting and summations of the meeting can be assembled on the way back to Abu Dhabi. These are issues that are impossible to address on a crowded airline but can be on an executive jet because of the confidentiality of travelling “in private”.

Next, we randomly selected a meeting in Riyadh and asked a travel agent to determine what sort of travel schedule would be required. On current airline schedules our executive would have to leave on one of two early morning flights; one o’clock or two o’clock in the morning. A prudent company would send the executive the afternoon or evening before. In that case here are additional expenses:

Royal Jet’s company travel department information offers the following:
- A round trip, point to point on a Lear 60 Abu Dhabi - Riyadh with a maximum four hour wait = US $10,300
- Maximum 6 passengers on Lear 35  
- To compare Etihad Airways Abu Dhabi - Riyadh = $800 (Business Class)

The above sample trip from Abu Dhabi to Riyadh and return is quite basic. Now consider the time savings that would be involved on a business trip to multiple cities in one day or perhaps to cities in countries where the airline schedules are not as convenient, or the airlines themselves are questionable in regard to the safety of one’s personnel.

This presents an interesting result – the private jet not only transports our executive in a more cost effective, private and confidential manner but there is also the option of adding passengers on the same flight at no additional cost. This benefit opens the door for other employees to make important, personal contacts with their peers within the company that is being visited.

None of this comes as any surprise to Royal Jet. The company’s expansion plans over the next few years are quite remarkable and the down turn – and market correction within the industry – has presented an opportunity for even more rapid expansion. The company has identified a five-year expansion strategy created to find the best solutions to address the Middle East’s business aviation boom. The expansion spans fleet acquisition, interiors upgrades and a strengthening of its sales structure with a fleet of more than 26 aircraft and expansion centred mainly on large-to-mid-range capacity airliners.

Typical missions flown by Royal Jet BBJs are mid to long range, intercontinental hauls such as UAE - London/Singapore/Germany with the three most popular destinations in Europe being London, Geneva and Paris. That said, As part of its existing fleet, Royal Jet has five Boeing Business Jets (737-700s) – making it the world’s largest operator of BBJs, which are considered to be the ultimate in VIP private jet travel. BBJs can cross continents, with a typical range of 5000 nautical miles - enough to fly non stop from Abu Dhabi to the west coast of Australia.

Royal Jet’s product offering spans several operations including luxury air charter services, medical evacuation service, an aircraft management and acquisition consultancy, a brokerage service and its award-winning Fixed Base Operations (FBO) /VIP terminal, at Abu Dhabi International Airport. The company has recently received a string of international awards, such as winning World’s Leading Private Jet Charter by the World Travel Awards for the last two consecutive years and Business Jet Provider of the Year at last year’s Aviation Business Awards.

In part, much of Royal Jet’s success has been achieved through continually addressing the rapidly changing market conditions. Last year it adopted a policy of increasing diversification of its business across all possible arenas, including its FBO, an emphasis on aircraft management, an increase in Royal Jet Medical Evacuation Services and, of course, its core aircraft charter business. It is still looking to maintain, and even grow,  market share just as some of its competitors must cut back on their growth plans.

It has a number of developments lined up to address the home (GCC) market and is expanding regionally with a second FBO in the region, it is even expanding its operations within one of the GCC countries as this is seen as an important area of growth within the Middle East as a whole.

So, despite the downturn in the worldwide private aviation industry, the outlook for Royal Jet continues to look good. Not only is the cost effectiveness and security to consider, with quality, comfort and unequalled service; why choose a private jet when you can have a Royal Jet. 

About Royal Jet

Royal Jet is the pioneer of luxury executive flight services in the Middle East. Since our inception in 2003, the company has achieved phenomenal success and growth, and today is the market leader in the region with a significant and growing international presence.

Our vision is to be the most admired private aviation brand in the world by providing a service that exceeds the superior expectations of our discerning clientele, be they Royalty, Heads of State and other VIP’s, and delivers the ultimate in safety, efficiency and luxury.

Royal Jet’s success derives from its ability to provide a consistently exceptional and completely bespoke service that is highly personalised to the differing needs of our clients. This requires meticulous attention to detail throughout the entire Royal Jet experience, before, during and after their flight, and a commitment to adapt and tailor our service to each individual client’s requirements.

Royal Jet has already established itself at the pinnacle of private aviation, having been voted the world’s leading private jet service for two years running at the prestigious World Travel Awards. If reaching the pinnacle is difficult, staying there is an even bigger challenge, therefore we continue to invest and innovate, with a major re-furbishment plan in place for our fleet of Boeing Business Jet’s and new enhancements such as the introduction of a personal chef to help provide a truly unique and luxurious inflight service.

Our approach extends beyond VIP aircraft charter operations, as we have our own FBO (Fixed Base Operation), which includes a VIP Terminal, at Abu Dhabi International Airport and operate the Middle East’s leading Medical Evacuation service. For private jet owners, we provide consulting services in the areas of aircraft management and acquisition while our new Charter Brokerage offers worldwide charter services with carefully selected and fully audited operators.

We offer a bespoke range of premier executive travel solutions in the UAE, Saudi Arabia through our partnership with Arabasco, the Middle East and beyond, aiming to continually enhance our excellent standards of customer service and satisfaction.

• VIP Aircraft Charter - with our own modern fleet of aircraft including the world’s largest fleet of Boeing Business Jets, luxurious Gulfstreams and other VIP aircraft.
• Medical Evacuation Services - the first, and recognised as the best, Aeromedical Evacuation and Repatriation operator in the Gulf, specialising in medical air transfer worldwide
• FBO (Fixed Base Operations) - ground handling services to all executive aircraft flying into/through Abu Dhabi International Airport
• Aircraft Management, Acquisition & Consultancy - for private jet owners
• Charter Brokerage - a worldwide ‘from anywhere/to anywhere’ aircraft charter service

VIP AIRCRAFT CHARTER
In an age where time is the ultimate luxury, more valued than ever, Royal Jet enables you to take off when you want to and fly to any destination in the world in unsurpassed comfort and privacy.

The Royal Jet experience begins long before your flight. Designed with our clients’ needs in mind, our VIP Terminal and Lounge at Abu Dhabi International Airport exceeds the definitions of luxury and comfort, eliminating the hassle of queues and time wasting formalities. We can arrange for a limousine or helicopter to escort you from your home or business to our VIP Terminal and you can be airborne as little as 15 minutes after your arrival.

No two flights are ever the same. The flight you arrange with us is your flight, with everything tailored to your requirements. From 52 guests to just one, we can provide an aircraft suited to your needs, with a choice of cabin configurations, including meeting or dining areas and even a private bedroom for the ultimate in luxury.

Our in flight service is equally tailormade; from your preferred cuisine to your favourite film, we customise all aspects of your flight. We can even provide you with your own personal chef to accompany you on your trip to manage and oversee your culinary and dietary requirements. The limit is your imagination, no request is too grand and no detail too small, you only need to ask.

When travelling with Royal Jet, safety, security, confidentiality, privacy and unsurpassed comfort are our staff’s top priorities. Our cabin crew are carefully selected to be at the pinnacle of their profession, offering you a discrete, but attentive service and it will be their pleasure to welcome you on board your next flight.

FIXED BASED OPERATIONS (FBO) & VIP TERMINAL
Located at Abu Dhabi International Airport, 25 minutes from the city centre and 50 minutes from Dubai, Royal Jet’s FBO is positioned at the heart of Middle East private aviation and is perfectly placed for technical stopovers for flights between Europe and Asia and the Far East. We offer a full suite of services including refuelling, catering, aircraft interior cleaning and dressing. Conference rooms, dining venues and VIP lounges are available for you and your cabin crew to enjoy while your aircraft is being prepared for its onward journey. We provide a customer focused service combined with the exceptional operational expertise you would expect from the Middle East’s market leader in luxury executive flight services. Our FBO also offers line maintenance, including defect rectification, on selected aircraft for owners and operators, carried out by our team of experienced engineers, who hold the required GCAA licences.

The excellence of our Fixed Base Operation is reflected in the facility recently being nominated as one of the world’s top ten FBO’s by Aviation International News.

AIRCRAFT MANAGEMENT
Professional aircraft management is the most efficient way for aircraft owners to reduce costs, through consolidating various flight operations such as maintenance, flight planning and pilot and cabin crew schedules, along with the added benefit of pooled discounts on fuel and heavy maintenance and the option to generate charter revenue when your aircraft is not being utilised. Essentially, every aspect of running a private jet is handled for you, from hangarage to certification, from compliance to catering. You simply tell us when you want to travel and your flight will be ready to take off when you are. Our service extends to aircraft acquisition and purchase completion including cabin design and configuration, taking advantage of our excellent long-term relationships with manufacturers.

As the Middle East’s leader in private aviation, we are perfectly positioned to provide you with this bespoke, ‘one stop shop’ aircraft management consultancy.

MEDICAL EVACUATION SERVICES
Royal Jet is the market leading licensed aeromedical evacuation service operating in the Middle East with over 650 successfully completed missions. Our specialist medical flight team of doctors and nurses provide caring and professional expertise including a detailed pre-flight assessment to ensure the patient is fit to travel. The service is available to any individual, corporate or government entity that has a patient in need of immediate transfer to any regional or international medical destination.

Our highly trained medical team has specific expertise in cardiology, pediatric, neo-natal and intensive care. We are equipped with the most advanced technology, including the latest neo-natal ventilators and defibrillators and have a large inventory of modern critical care mobile ICU equipment for any situation. Whenever possible, we allow accompanying family members and our fleet includes dedicated Learjets as well as Gulfstreams and Boeing Business Jets, capable of reaching even the most distant medical destinations.

CHARTER BROKERAGE
Royal Jet Charter Brokerage provides clients with bespoke private jet charter for any mission type, anywhere in the world. We have access to a worldwide database of carefully selected aircraft operators who share the same impeccable standards as Royal Jet itself. All aircraft we charter on your behalf are audited and accredited to ensure you receive an exceptional level of service, safety and security.

We can source aircraft that precisely match your requirements, from light private jets to the largest VIP aircraft. We can help with aircraft configuration to meet the needs of your party, along with ground handling and catering using Royal Jet’s own renowned operations centre. We provide 24 / 7 availability to clients and operators, with a personalised service provided by our dedicated Account Managers. Our team has years of experience working in an operator environment where attention to detail is paramount and an understanding of how to find solutions in the best interest of the client is second nature.