“This is an important year for us,” says Air Partner’s Director of Private Jets David Macdonald. Air Partner, one of the world’s leading charter providers, is approaching its 50th anniversary, having experienced significant restructuring on the back of what has been a difficult market over the past two years. Today, Air Partner, is very much forward facing and experience has given it plenty of insights into the new shape of the business aviation market. Jo Murray speaks to him
“Of course, 50 years ago the world was a different place,” says Macdonald. In fact, for Air Partner the same could be said of two years ago when it was also a business aircraft operator. But this part of its business, which it ventured into in 2006, was closed in March this year to enable the group to concentrate on its core business expertise. This centres on its aircraft broking business supplying passenger and freight charters, and its private JetCard membership scheme, to industry, governments, corporates and high net worth clients worldwide.
Air Partner pioneered private aviation broking in the UK. It is a business that is so much more complex than simply matching demand with supply. The secret of charter broking success, says Macdonald, is the provision of independent advice.
“This has allowed us to go from being a small operation to a much larger organisation altogether. It relieves us of the shackles of being tied to particular aircraft types, particular industry sectors and particular geographies,” he says. Air Partner has experienced significant growth through expanding internationally. In fact it now has 20 international sales offices – and has proved there is a big broking market outside the UK. Expansion is under way in Russia and is being eyed in Latin America and Asia under the stewardship of new Chief Executive Officer Mark Briffa (former Chief Operating Officer) who took the reins earlier this year.
“Beyond the geographic expansion, we have continued to diversify. We have built a very large freight charter broking operation. We have a very large flight operations service, Air Planner, that emerged from our in-house flight ops experience and provides flight planning and overflight services to third parties. We have also diversified into offering fuel supplies worldwide and the uptake has been extremely good.” Air Partner has historically been a customer of the charter operators (hiring aircraft on behalf of Air Partner’s own clients) but now, in many cases, the broker is not just the customer but also the supplier of services to the operators too.
When it comes to the business aviation part of the group, Air Partner has seen its client base shift from initially 90% business to a 70/30 business/leisure split today. The launch of Air Partner’s JetCard six years ago has been instrumental in making private travel more accessible and transparent, importantly offering guaranteed aircraft availability at fixed prices. “A lot of that has gone hand-in-hand with our JetCard product launched specifically to provide fractional owners or other card members an alternative to existing providers in Europe,” says Macdonald. “It has been extremely successful for us because we offer a personal flexible service and the widest range of aircraft. JetCard is now available in six categories in UK/Europe and is the only jet card to offer VLJs such as the Cessna Citation Mustang and Citation CJ1.
Macdonald points out that many customers are now using private aircraft to go skiing, for their summer holidays and for all other types of leisure travel. He maintains this is due more to accessibility than affordability. “Before, people may have looked at aircraft charter and viewed it as a big, complicated industry, with lots of aircraft choice, lots of providers; they may have had difficulty in determining whether good value was being had. Many people were reluctant to get into private aviation because of the lack of transparency in pricing in our industry,” he says. “With our JetCard we show pricing on our website and in our membership agreements so that the client can see exactly what rate they are getting – and that it is a market tested price.”
Macdonald says that the role of a broker like Air Partner (he prefers to call Air Partner a charter provider), is to deliver comfort to the customer in that they know they are paying the right price for the right aircraft. This is how a broker adds value. But before there is pricing comes safety – and it is also the role of the broker to ensure that only the best quality equipment flies its clients.
“Safety has to be a given. Those who charter a jet should not even have to think about safety,” says Macdonald. “There are people out there offering unlicensed aircraft. There has always been a grey market but, during the recession, this has actually become bigger because there are a so many aircraft owners who cannot sell their jets. So they put them out on the charter market, unlicensed. The most important thing for someone who wishes to charter an aircraft is to be sure that the aircraft is being fully commercially operated with insurance for commercial use. That is the first and most important level of protection we provide to our clients.”
Of course, the grey market does not pertain to particular aircraft types or even to particular regions, but some markets – especially Russia, for example – are black spots for the offer for hire of unlicensed and uninsured aircraft.
“We have our own in-house quality procedures; we have our own quality management teams. In America we only use Wyvern-approved or Argus Gold approved carriers. In Europe there is less demand for such accreditation services but there are fewer operators and the standards are generally monitored extremely well and we do our own monitoring too.”
As a former aircraft management company, Macdonald says Air Partner has the utmost respect for companies in this sector. “It showed us how difficult aircraft management is and how hard a lot of our suppliers are working to stay in business,” he comments, adding that for a broker to have its own aircraft on tap is nice but it is not de rigueur.
“When the market is hot and there is high demand, more aircraft come to the market, more suppliers emerge and the industry responds quite quickly to the demand. There is a lot of capacity in the supply base to meet peaks of demand. We have had a JetCard now for nearly six years and this guarantees clients the availability of aircraft at 24 hours’ notice in Europe and in North America, and we have never had a problem fulfilling that.”
He points out that the European market for air charter has been replenished nicely over the last five years, especially during the height of the market during 2005-2008. As the market recovers in the wake of the current economic downturn, Macdonald says that a good broker will continue to have a good supply base with a plethora of appropriate and modern aircraft to offer. “That is when it will be especially good to have independent advice,” he says.
Just ahead of the forthcoming MEBA Show in Dubai, Air Partner launched its Middle East JetCard and a third service area to its card scheme. The launch of the new 25 hour Air Partner Middle East JetCard follows last year’s successful introduction of the company’s European and Continental US service area cards to GCC-originating travellers flying within these continents. The Middle East JetCard is aimed at local business and leisure travellers wishing to fly within their home region (many have already purchased one of Air Partner’s other jet cards) and at overseas visitors to the Middle East (including European and US JetCard holders) who need or want to undertake multi-centre trips. Countries in the service area are Cyprus, Egypt, Iraq, Jordan, Kuwait, Kingdom of Bahrain, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates and Yemen. Additionally, the card includes the special destinations of Tehran and Esfahan in Iran, and Kabul in Afghanistan, for flights to or from the Middle East service area.
Earlier this year, Air Partner announced it had formed a partnership with MENA Aerospace Enterprises to grow its private jet charter business in Bahrain, Kuwait and Saudi Arabia. MENA Aerospace Enterprises’ charter brokerage unit, MAE Jet Charters Company WLL, is now the exclusive sales channel for Air Partner in these regions, having been appointed general sales agent in July.
Russia has also become extremely important for private aviation. “However, it is still evolving,” says Macdonald. “There are still very few aircraft on the Russian register. This means that people wanting to fly within Russia have to be very careful about what they are chartering. We have traditionally had a lot of inbound flights to Russia from big name corporations and there has been a resurgence of that as the west is investing in Russia once again. I also see Russian clients who are looking for quality supply – they are now realising that the cheapest option is not always the best or safest option.”
For the US market, Air Partner has also announced a strategic alliance with CitationAir. Through this newly-formed alliance, Air Partner will look after CitationAir’s jet card customers flying privately in Europe and the Middle East. CitationAir clients can access Air Partner’s JetCard service at a fixed, all-inclusive price with guaranteed aircraft availability on a trip-by-trip basis. Also, the alliance means that CitationAir is Air Partner’s preferred private jet supplier for its JetCard clients travelling in North America. Under the agreement, Air Partner JetCard customers now have guaranteed access to a young fleet of 80 Cessna aircraft when travelling within CitationAir’s North American service area.
Commenting on market recovery, Macdonald says: “In our broking and JetCard business we have been pleasantly surprised because we did not see a collapse in our private jet business. People cut back a little and flew a little less, but very few people stopped flying altogether. The aviation companies affected most by the recession were those selling aircraft and fractional shares. Fractional ownership has stalled in Europe, mainly because it is so inflexible.”
He concludes: “What we’re offering is a flexible service: ad hoc charter and cards. We sell the right products to the right people so that they do not want to bail out. Flexibility has value. Nobody knows what is around the corner economically.”