VistaJet, a unit of Dubai-based Vista Global Holding, this morning announced plans to add a billion dollars in new private jets over the next 24 months. It said the move reflects increased demand from corporate executives. The additional aircraft are all from Bombardier. Plans call for accepting a dozen ultra-long-haul Global 7500s, plus a new order for 10 super-midsize Challenger 350s.
While the global private jet charter market has recovered to near pre-COVID-19 levels, it has done so mainly on the back of new flyers and UHNW leisure travelers flying between second homes.
By crediting its decision to increased interest from the C-suite, the move could signal concerns that CEOs might eschew in-person meetings for Zoom are unfounded. Across the business travel sector – from hotel companies to airlines – there have been questions if a “new normal’ would cut the wings from road warriors going forward.
Thomas Flohr, founder and chairman of VistaJet and parent Vista Global Holding, said, “We continue to see a rapid acceleration in new members, which is driven by corporate and executive demand for our business mobility offerings. Global private aviation networks will be even more vital to support businesses and the economy.”
After long focusing on UHNWs globetrotters seeking an uber-luxury experience, VistaJet pivoted last year amid the pandemic to add a short-term lease program targeting businesses and a new corporate travel plan. The latter includes implanting a VistaJet flight coordinator in the client’s office and an option to have a backup aircraft ready at the departure airport in case the primary airplane isn’t able to operate the flight.
VistaJet also said it will upgrade all of its current fleet of 74 super-midsize, large cabin, and ultra-long-haul private jets with high-speed KU-band technology by the end 0f 2022.
It’s thought as CEOs return to the road and skies, there will be a trickle-down effect as executives and teams at lowers levels will need to get out in advance of and to follow-up from the C-suite meetings.
The announcement marks a significant expansion for Vista Global, which has acquired all or parts of JetSmarter, XOJET Aviation, and Red Wing Aviation over the past couple of years. Last month it agreed to acquire charter broker Apollo Jets and a stake in Talon Air, 14th largest U.S. charter operator. Laws restricting foreign ownership prohibit Vista Global from having a majority interest in U.S. operators.
The additions will boost the fleet Vista Global’s consumer brands – VistaJet and XO – can offer to companies and individual travelers via on-demand charter and jet card-style programs to around 190 aircraft. That represents a nearly three-fold increase since the end of 2018.
Executives from NetJets, the largest operator of private jets in the world, and Wheels Up, now second biggest, have both said they expect business travel to bounce back later this year.
Patrick Gallagher, president of NetJets, a unit of Berkshire Hathaway, said unlike the 2008 financial crisis, corporate accounts didn’t seek to sell back their fractional ownership shares during the pandemic. Instead, there have been inquiries about expanding access to more company executives. He previously said plans call for adding 40 new private jets per year for the next decade. It will take delivery of its first Global 7500 next year.
Flexjet, a unit of Directional Aviation’s OneSky Flight and the second-largest fractional fleet operator in the U.S., quietly moved ahead with European expansion plans last year after initially delaying them due to the pandemic. In 2018, it placed billion-dollar orders with Embraer Executive Jets and Gulfstream Aerospace, the latter for its new Gulfstream G700 ultra-long-haul jets.
This year, NetJets joined Flexjet in placing an order for 20 of Aerion’s supersonic AS2 private jets that carry a price tag of $120 million per unit.
VistaJet said it had seen a surge of nearly 50% in corporate interest globally since July 2020. It also reported a 23% increase year-over-year of flight hours sold during the first quarter of 2021. New customers in its Program membership grew 90%. The plan typically requires purchasing at least 50 flight hours per year and a three-year commitment. While VistaJet doesn’t publish rates, 50 hours would equate to between $600,000 and $1 million, based on aircraft type. Customers get fixed-one-way rates with guaranteed availability on as little as 24 hours’ notice. The one-way rates mean that customers don’t have to pay for repositioning legs before or after their flights.