Jet Edge Builds Super-midsize Fleet
Business has been so good at West Coast charter/management firm Jet Edge International that the company devised an unusual arrangement to build a fleet of Gulfstream G200s. With a fleet consisting of mostly large-cabin Gulfstreams, Jet Edge has seen growing demand for the super-midsize charter market, and the G200s (and one G280, with two more coming) are ideal to fill that need, according to president Bill Papariella.
Last summer, Papariella put together a presentation on the potential of building a G200 fleet, which included a special hourly-rate support program that Gulfstream developed for Jet Edge. Papariella delivered the presentation to potential customers and signed up eight people who were interested. The group, along with Papariella, put up about $50 million to buy and refurbish up to 10 G200s, the plan being to use cash to get the program started and then refinance the purchases later.
Fleet Expanding Quickly
With ready cash, Papariella was able to find G200s at rock-bottom prices from OEMs that had taken them in trade and from banks that needed to offload some inventory. The first G200 joined the fleet in July, followed by another in September and three in December. Each G200 averages 60 hours of charter flying per month, and each has been or will be refurbished and equipped with Aircell’s broadband air-to-ground Internet system, including the company’s new Text & Talk capability and Vision movie-delivery service.
“We’re adding an average of 1.5 airplanes per month,” said Papariella during AIN’s visit to Jet Edge’s Van Nuys, Calif., headquarters in late January. “We have 34 now, and nine more signed up.” Jet Edge’s fleet is headed to reach 36 jets by the end of April. The fleet will soon gain a BBJ and a G650, both slated to be based at Jet Edge’s joint-venture operation with Asia Jet in Hong Kong. Last year the company logged 6,000 charter hours.
Although Jet Edge is busier than ever, there are challenges. “We had a great year,” he said, “but we’re nervous about sustaining our growth.” Papariella is proud of Jet Edge’s transparency to aircraft owners, but he tries to take service a step further by providing detailed statements showing exactly where every penny spent on the airplanes goes. This is broken down into metrics that help owners see how the airplanes are performing financially. “We’re overloading the owners with information,” he said, and some have been surprised at the level of detail, something they say they haven’t received from other charter/management firms.
Papariella, who used to work for NetJets, is careful to keep costs under control, despite the rapid growth of Jet Edge and sister company Western Jet Aviation, which has a full house of aircraft in for maintenance at both its Van Nuys and Allentown, Pa. hangars. At NetJets, he saw that there were many layers of customer service personnel to take care of each owner. Aircraft owners do shop around for the best prices. “We’re competing [with other charter/management firms],” he said, “and the margins aren’t there to hire three layers deep. Prices are still flat.”
With the G200 fleet program well under way, Papariella is considering other opportunities, possibly GIV-SPs if the price proves to be right. “I’m happy about our growth,” he said. “Right now we’ve got our hands full. We always look to be opportunistic, but we’re happy if we get better at what we do.”