Business high flyers

The airlines freely admit that a huge wedge of their annual profits are generated by those passengers sipping free champagne in the roomy seats at the front of the plane, not the hoi polloi languishing in ‘cattle class’ at the back. And with return business class fares from London to New York costing a hefty €3800 and upwards it is little wonder that the carriers are fighting tooth and nail to get (wealthy) bums on seats. In fact, transatlantic business class has been labelled by some as the most expensive real estate anywhere in the world today.

But If economy class is such an low earner why not just rip out the cheap seats and turn the whole cabin into business class I hear you cry. Well, a British entrepreneur has done just that with Silverjet – his business class-only airline offering return flights between London and New York for €1400, around a third of the price of what you would expect to pay elsewhere. Despite the cut-price fare, passengers also get all the luxuries and perks associated with executive travel; 190cm flat bets, meals by top London restaurant Le Caprice and a concierge service including seat-side check-in at the departure lounge. Oh, and you can check-in with hand luggage just 30 minutes before you are due to take off.

Silverjet founder and CEO Lawrence Hunt says the idea for the airline was borne out of his time spent jetting around the world on business. “The inspiration came from my own unsatisfactory experiences travelling business class and paying extortionate prices for poor service.” Silverjet, which carried its first passengers a little over a year ago, flies twice a day to New York Newark, while there is also a daily service between London and Dubai. “The traditional model of business passengers paying higher rates in order to subsidise the cheaper economy seats is nonsensical, and a business-class only service, based on the single carriage model of low cost carriers, was a viable business idea,” explains Hunt when discussing Silverjet’s conception.

One potential downside to the venture has been the fact that Silverjet flies in and out of London Luton, around 30 miles north of the capital, rather than Heathrow or Gatwick. You would forgiven for thinking that the company has had a hard job persuading Americans to use Luton, an airport not exactly on tip of the tongue of your average business traveller. But an unperturbed Hunt argues that he has received an “overwhelmingly positive response” to the location, which includes the airline’s own private terminal. “We looked at all the major London airports before choosing Luton as a base,” he reveals. “The major advantage of this was being able to build our own private terminal which is central to the Silverjet experience. It’s also the least congested airport meaning fewer delays to flights due to overcrowded runways, and is only 35 minutes to central London by train.”

On top of this, the chaotic opening of Heathrow’s Terminal 5 and the torrent of negative publicity that it received has played into the hands of airports like Luton. In terms of aesthetics, Silverjet’s boss offers praise for the designers of T5 but questions whether offer what’s passengers really want – especially those on business travel. “There is no question that it is an impressive building but one could be forgiven for thinking that T5 has been to cater for travellers as shoppers, not passengers. Ask any business or leisure traveller are looking for when flying and I can guarantee you it is a stress-free journey, not a trip to a high street store.”

Splash the cash
For a fortunate few, however, money truly is no object. They don’t even have to put up sharing their flights with fellow business class flyers – they just hire a private jet. “Time is money,” announces Mark Booth, CEO of NetJets Europe, whilst chatting with CXO last month. US-based NetJets offers fractional ownership and rental of its private jets – perfect for that crucial business meeting or weekend away. For (just) €131,000 customers get 25 hours on a one of the company’s 137 aircraft in its European fleet, 24/7, 365 days a year. You just have to give them 10 hours notice. “Private jet travel is no longer the preserve of the superrich and famous,” Booth states, “it’s now a business tool for many hardworking executives, to increase their productivity and efficiency.”

Delving into the company’s operations reveals that clients include executives from Europe’s top companies, as well as entrepreneurs and the odd celebrity.

In fact, 30 percent of Europe’s 50 largest companies choose to use NetJets.
The business services 870 airports but the customers’ favourites include Paris Le Bourget, Geneva, London City, St Moritz and Nice. “Our customers fly on their own schedule, not an airline’s. They benefit from avoiding lengthy check-ins, security queues and delays.”

Interestingly, NetJets is owned by one of its old customers – US investor Warren Buffet, who just so happens to be America’s richest individual with an estimated personal fortune of $62 billion. Just as businessman Victor Kiam famously said, “I liked Remington razors so much that I bought the company”, Buffet added Netjets to his stable of business in the nineties under his Berkshire Hathaway umbrella. “Having financial backing from Berkshire Hathaway gives NetJets Europe great financial possibilities to respond to our clients’ needs,” says Booth. 

Post 9/11 there were some questioning whether Netjets would survive the slump in air travel. However, the doubters were proved wrong as wealthy travellers increasingly began to flash their platinum credit cards. Booth, who has headed the European operations since 2002, says he has seen the business grow to “amazing levels”. Client numbers in Europe currently stand around the 1600 mark. “Private jet travel is in its infancy in Europe and as a consequence has untapped potential.” Booth enthuses. Over at Silverjet, passenger numbers leapt by 23 percent in March compared to the previous month. Bosses plan to have 10 aircraft flying within three years on four different routes. “We’re always looking at ways to improve the business and offer the best service to customers,” announces the Silverjet CEO. Hunt, who describes himself as “passionate and interfering” (but in a good way), says a quarter of all business is repeat bookings.

However, executive air travel in general could suffer this year with the global slowdown gripping world economies. Then there is the increasing pressure on companies to reduce carbon emissions by cutting down on executives flying around the world for meetings. So Is Booth worried about the economic slump affecting travel numbers? He fires back an assured response: “Even if the economy slows down business men and women need to be efficient and productive. A top executive couldn’t visit three different European cities in one day and still be home at night by flying commercial.”

What is certain though is that competition amongst for the business travellers’ custom is only going to get fiercer, especially with today’s sky-high fuel prices.
And for Silverjet, competing with the major carriers for the corporate dollar is going to continue to be a challenge – but one that Hunt is relishing. Added to this, there are the doomsayers out there who say that Silverjet will ultimately fail in a similar fashion to rival business-class airline MAXjet that went to the wall at the back end of last year. As you would expect, Hunt strongly disagrees with this negative outlook and has vowed to prove the critics wrong. However, the airline has since revealed that it is in takeover talks with unnamed suitors as it struggles to break even. This sure looks like being one industry to keep a firm eye on over the coming months. In the meantime, I will have to start saving up or angle after a serious pay rise if I want to start travelling in style.