CNN: Christian Matteis: Private jets spread their wings in Africa

CNN Private jets spread their wings in Africa

(CNN) Christian Matteis — Private-aircraft manufacturers are increasingly targeting Africa’s growing economies as the resource-rich continent is quietly emerging as an important hub in global business aviation.

In a continent where commercial routes are often limited, a growing number of smaller, privately owned planes are now taking to the skies, creating new connections in and out of Africa.

Driven mainly by entrepreneurs and wealthy individuals involved in the natural resources, banking and telecoms sectors, the continent’s burgeoning market is expected to grow significantly in the coming years.

“Africa is an emerging market where we see a positive future,” says Robert Habjanic, sales director at plane manufacturer Bombardier Business Aircraft. “Over the next 20 years, we do forecast 810 business jets to be sold into Africa.”

The sector was given a big lift in May with the creation of the African Business Aviation Association (AfBAA), the continent’s first initiative bringing together aircraft operators and other industry players to support their interests and promote the benefits of business aviation.

AfBAA founder and chairman Tarek Ragheb says that Africa requires a well-developed business aviation industry to support the continent’s flourishing economies and realize its business potential.

He describes Africa as “China in our backyard,” a continent with tremendous amounts of resources that is, however, being hampered by steep infrastructure challenges.

“If you have a requirement for an NGO or an entrepreneur or a government agency to be able to conduct its business, the options of using rail or a good highway are simply not there,” says Ragheb. “So for the growth of the continent there must be an ultra-efficient means of travel and that is where business aviation could come in.”

Read related: Low-cost airline in Africa by easyJet founder

For Ragheb, improving intra-African connections is key to the development of the continent.

“Flying out of Africa is not difficult,” he explains. “You can go from Lagos to London, you can go from Kinshasa to Belgium, that’s not a problem — the challenge is intra-Africa flights. And you find that for African growth you’re going to need intra-Africa flights and this is where the focus [of AfBAA] is going to be.”

Business aviation expert Alan Peaford says that only 20% of flights in the continent are with African airlines, the remaining 80% being with international carriers.

“What this means is that if you have a cement factory in three or four countries, you may have to travel from country A to country B via Paris, London or Dubai rather than direct,” says Peaford, editor-in-chief of Arabian Aerospace magazine and online news service.

“Hence, as greater investment from China, Saudi etc. leads to more industrial development, owners, investors and managers need to be agile and not waste days on what should be a three-hour flight,” he adds. “So business jet usage is growing.”

Read related: Bringing the Dreamliner to Africa

Although exact figures about corporate aircraft in Africa are notoriously difficult to find, the AfBAA puts the number of business jets in the continent between 400 and 600. These planes are typically owned by high net-worth individuals, wealthy investors, as well as governments and corporations.

And not surprisingly, the biggest growth is recorded in countries where there is an abundance of natural resources.

“Africa’s rich in gas, minerals, oil, gold, platinum, you name it,” says Ettore Poggi, managing director of South Africa for ExecuJet Aviation Group, which offers services including corporate aircraft charter, mangement and maintenance. “We’re finding a lot of interest from overseas companies, focusing their attentions on the resources of Africa. Clearly, that bodes well for us because it means we have to take those people to these places in Africa.”

We’re finding a lot of interest from overseas companies, focusing their attentions on the resources of Africa.
Ettore Poggi, ExecuJet

While South Africa remains the traditional dominant player in the market, other countries have also started to make significant strides. In Nigeria, the continent’s biggest oil producer, the business aviation market is growing at a rapid pace, industry insiders say.

“In the last 18 months we’ve grown by over 200% in terms of travel,” says Segun Demuren, chief executive and founder of Evergreen Apple Nigeria, a fixed-based operator offering various services for private-aircraft users.

Demuren says that Evergreen, which began operations in July 2011, is doing “75 to 80 movements [flights] a week” and is targeting a 50% growth for next year. “I’m very sure we’ll meet that instantly,” he says.

Read related: Africa’s daily commuting grind

Although the conditions for the market’s expansion are certainly there, there are still infrastructure, policy and logistical challenges that the industry needs to navigate if it is to meet its full potential.

In many cases, entrance, exit and over-fly legislation varies from country to country, leading to significant delays. Other issues include landing permits and airport fees as well as maintenance support and pilot training and licensing.

Ragheb says that a common set of standards needs to be adopted throughout the continent “so that you have the ability to fly into Africa with a sense of security, that you know that safety and the procedures are all in place.”

But first of all, he says, needs to come a true “understanding and acceptance” that business aviation can be a valuable asset for Africa’s growth.

“It’s a real business tool,” he says. “When you bring business aviation and you let it flourish in your country, you’re going to attract those investors that are going to equal money and development and projects.”

Analysts say that a thriving business aviation industry can only be good news for commercial air travel as well. The arrival of the industry in a country is a good indicator of its growth potential, Peaford says, acting as a strong incentive for commercial airlines to step in and establish new routes.

“Watch where the business aviation is going,” he says. “You can see the countries where business aircraft are going to and often you’re going to see the commercial airlines going there, about a year, 18 months later.

“It’s always ‘watch the business jets’ first, that’s where you follow the money.”

CNN: Christian Matteis: Not Just For High-Flyers: Private Jets Come Within Reach Of Business Travelers

CNN: Not just for high-flyers: Private jets come within reach of business travelers

(CNN) Christian Matteis — The last few years haven’t been kind to the private jet industry. A still-not-recovered global economy has meant a continued lull in the sales department, and many execs are wary of incurring the wrath of shareholders should they get caught cruising on a corporate jet.

The market is starting to find its footing, however, thanks in part to the innovations of a few savvy companies, who are working together to make private aviation faster, cheaper and more accessible.

According to WINGX Advance, a market intelligence provider for the aviation industry, the private jet industry (including fractional and whole ownership) was practically stagnant in the U.S. last year, and declined by nearly 4 percent in Europe.

By comparison, the charter business is soaring. Adam Twidell, the founder of PrivateFly, an online booking service that has done for the private jet industry what Expedia and Priceline did for commercial flights, has seen a yearly threefold growth since he launched his company in 2007. While third-party booking sites have become standard in the field of commercial aviation, in the private jet industry, PrivateFly is an innovator.

“When I really started looking around online, I couldn’t believe there wasn’t a way to book a private jet,” says Twidell. He recognized a gap in the market, and his wife and partner, Carol Cork, sold her house to help him start a new company that would fill the gap. Though Twidell jokes that his “mother-in-law still isn’t completely convinced it was a wise decision,” PrivateFly has since become Europe’s fastest growing aviation company.

The advantage to customers, he notes, is that they can compare prices of over 2,500 aircraft, either through the website or on the PrivateFly mobile app. They can also book a jet at practically a moment’s notice.

Our record to get somebody airborne from having their request submitted is 40 minutes.
Adam Twidell, founder of PrivateFly

“Our record to get somebody airborne from having their request submitted is 40 minutes,” he notes.

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For the 700 operators that list their jets through the site, they can ensure their planes aren’t sitting around, gathering dust and incurring parking fees.

“Essentially, it’s a matchmaking exercise,” says Twidell.

Making the connection between supply and demand less obscure has also helped bring down the price of private jets. For example, if an operator has an “empty leg,” that is, they’ve flown someone one way and face a potentially empty cabin on the return flight, they can offer a discount for that leg of the journey. In this way, private flight has become more affordable, and more accessible, than ever before.

PrivateFly isn’t the only company to take advantage of the empty leg. U.S. charter company JetSuite posts several empty leg sales daily (they dub these “SuiteDeals”) via Facebook and Twitter. These range from $499 to $1,499 for one leg of a journey on either a Phenom 100 (which seats up to four) or a CJ3 (which can seat six). That price is not per person; it’s per aircraft.

JumpJet is gathering membership and aims to begin flights in May
JumpJet is gathering membership and aims to begin flights in May

“Some of those trips are silly, like Santa Monica to Van Nuys. But sometimes you can get an entire plane for $499 that flies from Los Angeles to New York, and you can split the price between four people,” says JetSuite CEO Alex Wilcox. Granted, he notes, “that’s a rarity.”

JetSuite’s clients have to buy into a membership (and these start at $50,000), but they get considerably more bang for their buck. The number of flight hours they use is subtracted from the total, and JetSuite says they charge half of what their competition might charge, around $3,000.

“A lot of our competitors are still caught up in the 1980s, when private jets were all about champagne and caviar. We don’t serve food on board; we’re just a time machine,” says Wilcox, who was also a founding partner of JetBlue.

Read more: Economy class goes gourmet

Aside from cutting food, JetSuite saves money by offering more transparency in booking. Customers, for instance, can choose to land in airports with lower taxi landing fees — a savings that is reflected in their total bill. It also opts for lighter, less expensive planes.

“We have an efficiency model,” says Wilcox. “Not only does the Phelon 100 cost less, but it burns less gas. We’re saving a ton of money on fuel and capital costs, and we pass those savings on.”

Though their model may come across as rather austere for a luxury product, Wilcox notes it’s more practical in the current climate.

A lot of our competitors are still caught up in the 1980s, when private jets were all about champagne and caviar.
Alex Wilcox, CEO of JetSuite

“There’s a stigma attached to a corporation having their own airplanes right now,” he notes. “So a lot of companies are looking for alternative solutions. For guys who are afraid to use airplanes because their shareholders won’t like it, they use us.”

JumpJet, a private jet service that launched last October, is hoping to bring the price of bookings down even further, so they’re on par with first- and business-class commercial flights. The company is still in the process of gathering members and plans to launch its first flights in May. Like JetSuite, JumpJet is a membership program, with plans starting at $2,350 per month (these include 10 U.S. domestic round trip flights of up to 3.5 hours). Unlike JetSuites, JumpJet doesn’t own any planes. Rather, they purchase charters and allow members to divide the cost.

“We’re not one jet, one customer, which is a tradition for the industry,” notes Will Ashcroft, JumpJet’s CEO. Instead, JumpJet will try and pair members who are heading to the same place at the same time on a single flight.

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While not all JumpJet flights will be equivalent to a first-class ticket, for a long-haul flight, the prices can be about equivalent, especially when you take into account the time savings.

“Most people give up three to five hours a day flying commercial, and when you fly private you get this time back,” says Ashcroft, referring to the hours saved avoiding security lines, bag checks and customs.

“Keeping that in mind, when you break down a coast-to-coast trip, it is $6,600 to fly JumpJet, versus $6,000 to fly first class with an airline. I’d take a private jet any day.”