While growth in the rest of the world stutters along, the US economy has recovered to the point where the US Federal Reserve is now contemplating introducing rate increases again. There are still problems, but real incomes are rising, albeit slowly, and GDP growth is looking reasonable. Not surprisingly, therefore, Executive Jet Management (EJM), the world’s biggest aircraft management company, is expanding its US sales team.
EJM President Robert Molsbergen talked to EVA about the company’s expansion plans in the US and in Europe. “Over the last several months we have added quite a number of sales people in the field, both for our managed aircraft activities and on charter operations. What we are looking for from this is a very active and expanded deal flow and there are already signs that this is coming to fruition. Our pipeline is very strong and we are taking on aircraft at a healthy rate,” he comments.
EJM’s focus has long been on the larger cabin aircraft, but Molsbergen reckons that the company is also seeing rising demand in the US for small and medium aircraft. “It looks as if business aviation is getting back to a healthy mix of large and smaller cabined aircraft, instead of sales being dominated solely by long-range jets. It is pleasing to see what looks like a continuing trend of increased sales in the mid- and small-cabin categories as well as continued strength in the large cabin sector,” he comments.
Models such as Citation XLS and XLS Plus and Lear 75s are coming back into the mix, while EJM has also signed management deals recently for G500s and G550s plus two Gulfstream 650s. The total fleet under management, excluding the NetJets fleet, now totals 224, making EJM the biggest operator in the US.
The company’s scale and the feedback among the owner communities that this generates helps to keep the prospect list healthy, but Molsbergen points out that EJM still has to work hard to convince prospects that they will get the kind of personal attention they are looking for. “People worry about our size and whether they will have the relationship they are looking for. Our job is to ensure that we treat each account as a personal relationship,” he says.
This is achieved by appointing dedicated representatives to each customer. “The client gets a dedicated team on all aspects, from billing to maintenance, to owner services, pilot support and training support. Personalisation is essential because every account is different and there is always a bespoke element that needs to be managed in detail,” he comments.
The logistics of running an aircraft management business on this scale are huge. “Our world would not exist without the help and support of our vendor network. This has traditionally been very strong. We have great relationships out there with a wide spectrum of vendors and because of our scale we have tremendous buying power. This enables us to leverage excellent prices for our owners. On top of this we have a pretty unique management model. The aircraft owner only pays the management fee, all the savings we negotiate are passed straight back to the owner. That is part of the value add that we bring,” he notes.
“People will typically say that we are more expensive than other management companies. But if you look at what owners pay in a year in terms of all the additional costs with some other management companies, and contrast that total figure with the savings that we find in fuel purchases, maintenance and so on, our prices look pretty competitive,” Molsbergen adds.
Building on its strength in the US, EJM has turned its attention over the last few years to Europe and China. The China project has gone quiet given the chilling effect of the country’s anti-corruption crackdown, which has made people reluctant to be seen to be purchasing private jets. However, the European project is very much on track and EJM has added to its European sales team in recent months. “It is early days for our new sales people. It takes some six to eight months for new sales people to start to be effective in our market, so we look for that to bear fruit shortly,” he comments.
Currently, EJM has 10 aircraft under management in Europe. This has been achieved from a base of zero in 2014, and Molsbergen’s goal for EJM in Europe is to push that number up to 12 by December, which, he notes, looks on the cards.
EJM benefits substantially from being part of NetJets and the European operational team work very closely with their NetJets colleagues. This helps enormously when it comes to dealing with the various country-specific differences and variations. It also means that EJM has a valuable prospective client pool, comprising people who start with fractional ownership and ultimately want to upgrade to own their own jet.
Since the new buyer already knows NetJets there is an established relationship and level of trust that tends to point them in EJM’s direction when they start looking for an aircraft management company to take care of their new jet.
“A lot of the new business opportunities we get are not generated by marketing events. They are very much the product of word of mouth. Our partner relationships are key here, and these partners comprise aviation attorneys, banks and aircraft financing companies and of course referrals from our pilots, who are at the sharp end of dealing with owners and operators,” he comments.
Molsbergen points out that EJM’s partners, crew and maintenance technicians are all in effect sales people for the company. “We have about 600 crew spread all across the US, and they are excellent ambassadors for EJM,” he notes.