Private Aviation – Worth It?

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Private aviation – be it for business or leisure travel – remains a topical discussion point, particularly in Africa, the continent with arguably the worst airline safety record. Richard Holmes takes a look at some of the major players and reasons why you may want to consider pushing the boat out and taking this more exclusive option.

From coal deposits and natural gas in northern Mozambique, to the rich oil fields of West Africa, it’s no secret that Africa’s resources industry is driving much of the economic growth across the continent. As quickly as minerals and oil wealth are pouring out of Africa’s ports, investment and foreign interest are pouring right back in.

And as much as these industries are driving high rates of economic growth at a macro-economic level, they are also a driving force behind key sectors of the travel industry across Africa.

Hotel groups are snapping up prime property faster than you can say ‘joint venture’, with a number of global brands staking their claim on the continent. Take Marriott International’s recent purchase of the Protea Hospitality Group for example. It saw the US-based group shell out a cool $190 million for the hotel chain that boasts over 10,000 rooms in seven African countries. Hilton Worldwide, Four Seasons, Carlson Rezidor and others are similarly expanding their footprint across Africa.

But hotel rooms lie empty if corporate travellers can’t reach them, and although Africa’s air travel market is slowly waking up to the potential of new routes and service innovation, the air charter industry has become a crucial cog in the wheeling and dealing that’s so often involved in doing business in Africa.

Although chartering an aircraft is still – often with good reason – seen as considerably more expensive than travelling on scheduled airlines, “air charter is growing steadily,” says Chris Frost, Business Development Manager – Flight Operations in South Africa for ExecuJet Aviation Group. “There is huge mining and infrastructure development and investment underway in many developing regions, domestically and beyond South Africa, and this is fuelling the growth in air charter.”

ExecuJet Africa is a good yardstick of that growth. The company operates charter and maintenance facilities at both Lanseria International Airport near Johannesburg and at Cape Town International Airport. To cater for the burgeoning market in North and West Africa, driven largely by the oil industry, the company also has bespoke facilities at Murtala Muhammed International Airport in Lagos, the commercial capital of Nigeria. 

“Any of the developing African countries are experiencing a growth of business travel with which the airlines cannot cope. This would include Mozambique, Democratic Republic of Congo, Angola, Equatorial Guinea, Congo and any of the resource-rich countries,” says Frost. “On average, it takes about two years for an airline to recognise the need for a scheduled service and secure aircraft on a growing route. This is where forward-thinking executives, using air charter, have a window of opportunity.”

Perhaps unsurprisingly, it’s corporate travel that drives much of the demand for private air charter.

“They account for about 75% of utilisation in our experience,” says Frost. “Non-governmental and government business charter flights often come under the public spotlight, and flying budgets using chartered aircraft have been curtailed in most countries.”

Within Africa, the market is firmly focused on the economic hubs in South and West Africa, where business tourism and aircraft maintenance services are easily available.  In West Africa, Lagos is a hub for private air charter, while Johannesburg’s Lanseria is home to the majority of the charter business out of South Africa. The privately-owned airport north-west of Johannesburg is home to 26 charter companies, including National Airways Corporation, the largest general aviation company in Africa that offers aircraft sales, maintenance and executive charter from a fleet that ranges from Cessna Caravans up to Gulfstream III intercontinental jets.

However, South African charter companies are increasingly turning their attention northwards.

“We have noticed an increase in charters to sub-equatorial Africa by South African companies establishing in Africa, which requires larger longer-range aircraft,” notes Mike Christoff, Operations Manager at Lanseria International Airport. “The local market is dwindling as new scheduled routes are introduced… and the downturn in the economy forces companies to drive rather than fly. But large industry still relies on the charter companies to get them around – mining companies especially.”

The booming demand for mineral resources in northern Mozambique is certainly a key component of the expansion plans for Lanseria-based charter firm Angel Gabriel Aeronautics.

“For the past 18 months we have been investing heavily in northern Mozambique,” explains Chief Executive Dylan Coppard. “By the end of 2014 we plan to have satellite offices in Nampula, Nacala, Pemba and later in Palma. Our plan is to then cut and paste our current Mozambique model, and apply it to any resource boom, in any other developing countries.”

With a strong brand in the high-end tourism industry, Federal Air is another company focusing on private bookings, says Commercial Manager, Brad Dickson.

“Whilst governmental work is a mainstay of certain operators, we focus on the private sector,” he says. “The weak rand and political instability in other parts of Africa have led to an upswing in demand for luxury travel.”

Based at O.R. Tambo International Airport – which allows for seamless transfers from the hub’s long-haul connections – Federal Air offers a premium point-to-point shuttle service. The company has been in business for over 25 years, and flies a fleet of 20 aircraft, from the large Beechcraft 1900D airliner down through the Pilatus PC-12 and Beechcraft King Air 200, to the safari lodge workhorse, the Cessna Grand Caravan.

Federal Air’s luxury charter arm, Bateleur Air Charter, focuses on bespoke bookings from high net worth individuals and corporate clients who want to fly on their own terms.

“We provide an opportunity for individuals to spend more time doing the things they want to do – be it in the bush or the boardroom,” adds Nik Lloyd-Roberts, Key Accounts Manager for Federal Air, who adds that the group is seeing a resurgence of the large group incentive market.

But the first question many people would ask is: why bother with the hassle of charter when you could simply hop online and book a ticket? It’s a simple question with two straightforward answers.

Firstly, it’s a saving grace when there’s simply no option, other than a lengthy – and perhaps hazardous – road journey. In many corners of Africa, particularly where business opportunities abound, they simply may not be a scheduled service. Or, if it exists, it may be so infrequent as to prove unworkable for the time-pressed corporate traveller.

For instance, scheduled services fly regularly enough from Johannesburg to Gaborone, but far-flung mining facilities are hours from the nearest airport and a long road journey could means hours, perhaps days, of lost productivity.

“Economic growth in sectors such as energy, mining and telecommunications is helping to drive demand for intra-Africa and intercontinental flying. These kinds of industries often require solutions to locations less well served by scheduled services, including private jets and larger aircraft types for site visits and crew rotations,” adds Alex Berry, Group Sales and Marketing Director for Chapman Freeborn. “Charter offers an attractive alternative to scheduled services with maximum flexibility in terms of route and flight times. This is particularly valuable in regions like Africa where the scheduled service market is not yet fully-matured and many locations are poorly served by airlines.”

Necessity is often the gateway to a client’s first taste of chartered air travel, but “once they have experienced the intangible benefits, they will often seek ways to motivate to use air charter on other routes,” notes Frost.

The second reason to think ‘charter’ is time.

“Time is money, and the ability to land on small strips off the commercial routes is incredibly valuable,” says Coppard emphatically, who argues that lost productivity, accommodation costs and the payment of per diems can all contribute to making a road journey for skilled professionals as expensive as chartering a plane. “Most companies have failed to calculate the true cost to company when rejecting a charter flight, then rather making the decision for their employees and or subcontractors to drive.”

“Where time has value then there is significant advantage in the flexibility that private air travel offers,” agrees Frost. “Consider a multi-destination trip into Africa. You can halve the time it takes to complete your business.”

Private charter is also an efficient way for cash-rich time-poor executives to maximise their time on the continent.

“Africa is a popular destination for European, American and Asian travellers. The private traveller often combines leisure with business travel, like a breakaway strategy session to a remote destination,” explains Frost. “This dovetails nicely with a scheduled air service to the main hub, and thereafter a private flight to and from the final destination.”

In addition to simple connectivity and time savings, there are, of course, a host of other reasons – many of them intangible, but no less valuable – that private charter works out to be both cost-effective and convenient.

For instance, who’s watching and listening when you board that scheduled flight to what could be the Next Big Thing in resources?

“Protection of proprietary information is key to any plans for business expansion. Senior executives recognised by competitors whilst on their way to a foreign destination on an airliner can often give clues as to what interests a company may have in that country. Private travel reduces that risk,” suggests Frost. “Secondly, you know who you’re flying with on the jet, so you can work or strategise on board in the knowledge that your business is secure.”

The safety record of Africa’s scheduled carriers also leaves much to be desired, with many barred from operating in European Union airspace due to safety concerns.

“Whenever there is an accident there is a disproportionate negative impact on Africa’s aviation image,” adds Frost. “Then there is a noticeable increase in interest for air charter, especially from foreign corporations doing business in Africa.”

Tied to security concerns is the absolute security of luggage. Aside from safety issues, luggage weights and allowances are rarely an issue, and private charter companies are accustomed to dealing with high-value individuals and their coveted baggage.

Flexibility is a further benefit, for while charter itineraries are generally planned –and costed out – in advance, private jets allow for timings and destinations to be changed at relatively short notice to accommodate business demands and the vagaries of corporate travel.

Premium passengers on scheduled carriers may expect similarly VIP service, but the fact is that regardless of whether you’re flying in Business or First, a scheduled carrier is not going to delay the flight so you can seal a deal.

However, it’s important to bear in mind that any extensive changes to the agreed flight plan could incur extensive costs. If flights are delayed for an extended period, many charter companies will charge demurrage, and increased flight hours could impact on crew rotation and duty hours.

If money is no object, the world is your oyster, although that’s rare in the world of corporate travel where the damage to the bottom line has to be balanced by the return on investment. Balance the true cost, including lost productivity and the benefits of being first to the ‘table’, and the value of air charter for executives doing business in Africa is plain to see.

Blurring the lines

Although officially operating to a set schedule, South Africa-based CemAir’s service and reach operates much like a charter carrier, connecting mineral industry and corporate executives with smaller business and second-home destinations utilising its small fleet of Bombardier CRJ Regional Jet aircraft, as well as 10 Beech 1900 aircraft. 

The airline currently operates a scheduled service between Johannesburg and Sishen, Johannesburg and Margate, Johannesburg and Plettenberg Bay, and Plettenberg Bay and Cape Town.

“We are investigating scheduled flights between Cape Town and Sishen, as well as Cape Town and Mthatha,” adds Nicolene Myburgh, Head of Scheduled Services for CemAir.

Web access

While major airlines are making mobile phone coverage and Wi-Fi access standard on long-haul flights, air charter lags behind when it comes to in-flight connectivity.

“Only the larger, intercontinental business jets offer this service currently,” says Chris Frost from ExecuJet. “The cost of satellite time, ­at around $7/minute, is still the limiting factor, as is the relatively low bandwidth. It’s improving all the time though, so it won’t be long before the Internet becomes more practical at 45,000 feet in a light business jet.”

Popular planes

Aside from arranging the nuts and bolts of your flight, specialist charter companies are also experts in advising on the right aircraft for your ‘mission’. In a further argument against having a ‘one-size-fits-all’ company jet waiting in the hangar, the where and why of your flight is intrinsically linked to what you’ll require.

For short hops within Africa, particularly into small safari camps, the Cessna Grand Caravan is the workhorse of the skies, able to carry over a dozen passengers safely onto short gravel runways. It’s relatively slow and noisy though, so for longer destinations with better airfield facilities the turbo-prop King Air and Pilatus PC-12 are popular choices.

For longer journeys, you’ll want to swop propellers for jet engines, and the Cessna Citation Bravo remains one of the most popular small-size business jets on the market. It has a range of 2,570 kilometres, and is capable of flying seven passengers at up to 695km/h. The Citation Bravo is also popular for corporate travel within Africa, thanks to its short take-off capabilities, while for longer journeys the Challenger 300 is an extremely popular mid-sized jet that offers double-club seating for eight passengers.

For longer journeys, the 14-passenger Gulfstream G550 is the rich man’s calling card, and the world’s most popular jet for intercontinental charter travel. It can fly for 12 hours and cover close on 12,000 kilometres.

How to hire

Depending on the charter company you choose to work with, there are three main routes to chartering a plane for your journey.

Ad hoc bookings form the bottom of the pyramid. Pick up the phone, work with a booking agent and they’ll ensure there’s a plane waiting on the tarmac that’s fit for purpose. Simple and straightforward, but company procurement procedures and the process of booking can be burdensome, and the costs involved are usually greater than repeat bookings.

For frequent charters, many operators offer the option of block-buying your flight hours. This offers a cheaper rate per hour, but often comes with conditions regarding unused time.

“As a guideline, we would suggest that a client flying less than 50 hours per annum should use on-demand charter service. A client flying 50 to 100 hours per year would gain benefit from a JetCard,” says Chris Frost, Business Development Manager – Flight Operations in South Africa for ExecuJet Aviation Group. “A client flying in excess of 200 hours per year should probably investigate the acquisition of an aircraft.”