Buyer’s market for charter is fine for Global Jet Concept
Aircraft management company Global Jet Concept marks its 10th anniversary this year at a time when longevity itself is quite an accomplishment in an industry that has been badly buffeted by the financial crisis for the past 18 months or so. The Geneva-based company has some 60 aircraft under management contracts, with 22 of them available for charter.
According to charter sales director Bjorn Naberhuis, there has been a surge in charter capacity in recent months with more private owners eager to get income for their aircraft, especially those who would otherwise sell the asset if resale prices hadn’t dropped so much. This has tipped the supply-demand ratio more squarely in favor of charter customers. “The pricing structure has changed and customers now have a big choice,” he told AIN. “For instance, there might be as many as 20 different Challengers available at any time and so a flight from Moscow to London could now be priced at ?20,000 compared with ?36,000 a few years ago.”
This environment has resulted in tougher competition between charter brokers and operators with long-accepted “gentlemen’s agreements” on pricing and commission increasingly being swept aside, with a greater emphasis on maximizing income from empty-leg flights. According to Naberhuis, this has made the marketplace harder and riskier for aircraft owners and so never a better time for them to have an experienced and trusted management company on their side.
Global Jet Concept (Booth No. 427) prides itself on taking the long view of the market. “Owners have changed their attitude to charter pricing and are being more flexible,” said Naberhuis. “We never make firm guarantees [about income from charter] because you just can’t do that with managed aircraft. We simply try to fill the gaps around the owner’s need for theaircraft and possible charter flights.”
The company’s fleet is registered in either Luxembourg or Austria, both of which are regarded as conservative airworthiness jurisdictions. The Luxembourg authorities, for instance, subject the operator to some 100 separate safety audits each year.
Over the course of its decade in business, Global Jet Concept has achieved considerable stability in its customer base. It has seen no more than four aircraft leave its fleet and all for reasons beyond the control of the management company, according to Naberhuis. “We stay very close to our owners,” he said, adding that they are tending to become more sensitive over the costs associated with having their aircraft managed and the value they get from this relationship. This is another respect in which Global Jet Concept believes its experience pays off for clients. “We have a lot of experience in managing maintenance, and we are very committed to ensuring that we get value for our owners by negotiating better prices for support,” said Naberhuis.
Flight crews also are vital links in the bond between a management company and its owners. Global Jet Concept keeps pilots assigned to specific aircraft so they will take especially good care of them. Sometimes, they are directly interviewed by the aircraft owner before hiring. The company maintains its own flight safety training and in-flight medical emergency training for flight attendants, as well as its own flight duty time limits. Nonetheless, the downturn in charter demand of the past couple of years has necessitated some reduction in the flight crew payroll.
“For our future, we want stable growth and we are sure it will come, along with more larger aircraft in our fleet,” concluded Naberhuis. “We are a very discreet company and we do things very discreetly. Safety is our overall priority and we don’t cut any corners.”