Six months after Jet Edge International acquired Columbus, Ohio based JetSelect Aviation, the company has implemented a new All Quoted Revenue (AQR) pricing program for its aircraft management business, experienced its strongest first half ever in terms of new business, and has integrated the two companies. This was all completed despite the complexities that have come with the Covid-19 pandemic.
Jet Edge announced the acquisition of JetSelect in January, bringing on board some 18 aircraft and boosting its fleet at the time to more than 80 aircraft. This placed it among the largest charter and management firms. Not only was it a good cultural fit—Jet Edge CEO Bill Papariella said the first time he visited the company, he walked away saying “this is the group”—but it gave Jet Edge a foothold into the Bombardier aircraft line and, significantly, brought new management pricing approaches.
Unlike most management firms, which share charter revenues with owners according to flight hour assessments, JetSelect shared revenues according to all assessments associated with that charter flight. Jet Edge called the traditional flight-time revenue approach less transparent for the owner and more complex to administer. In addition, basing shared revenues only on flight-hours could lead to pricing inequalities for the owners, Jet Edge noted.
Acknowledging the issues surrounding that approach, Jet Edge decided to package the JetSelect approach in its AQR program. Papariella conceded that by doing this, the company stood to lose on revenues streams that charter companies typically keep to themselves. However, he added that whatever has been lost in the increased share of revenues has been made up for in efficiencies in billing, happier customers, and, importantly, new business.
In fact, the company has brought an additional 16 aircraft onto management programs this year so far and has negotiations for three more in the works. This, Papariella said, is a record for Jet Edge and puts the company on pace to easily exceed its targets for the year. “I’ve never had this many airplanes join our fleet in this amount of time,” he told AIN. The additions have primarily included Challenger and Gulfstream models, along with a Hawker and Embraer Legacy 650.
He also cited the efficiencies that have come with quoting and processing pricing under AQR. Owners see the full prices upfront and have a better understanding of all the costs, fees, and revenues associated. “We’re totally aligned with the owners,” Papariella said, adding the company wants to eliminate scenarios where it is not in alignment with its clients, “even if that means giving greater yield to the owner on a per charter basis in return for a simple and complex-free selling and reporting process.”
Papariella added that he believes AQR will continue to significantly increase yields for owners and create a positive outcome. “The fact that we surpassed our historical annual fleet addition target in less than six months has validated the model for our valued aircraft owners and entire staff who worked tirelessly on implementing the AQR program during these challenging times,” he said.
As it builds on the early successes with AQR, Jet Edge has been busy combining its businesses with JetSelect. That integration is expected to be nearly complete beginning July 1, with the companies operating under a single brand. It also includes moving its operations center to Columbus and the naming of Robert Austin, who was CEO of JetSelect, to head fleet operations. Papariella noted that Jet Edge brought the entire JetSelect team on board.
Once the integration is complete, Papariella said the company will start to build on the combined entity with new marketing programs and products for companies. This could include a fractional aircraft model, he said.
While all of this has been ongoing, Jet Edge has been managing through the pandemic. Like others, the company saw a drop-off in business and flying. “Our flying is coming back,” he said. “It’s back enough to be meaningful.”
Jonah Adler, chief commercial and marketing officer, added that the company is seeing interest pick up in the midsize and large cabin segments, in particular. While the fleet was quieted, Jet Edge put in place a series of protocols to ensure it has protected the heal and safety of its crew, passengers, and employees in general, Adler said.
To help with this effort, Jet Edge retained health and safety logistics specialist Redline, which has worked with government agencies and the cruise line industry during the pandemic.
“Safety has moved from just moving aircraft through the air to the way we serve food, respect social distancing, and handle special requests,” among many other areas, Adler said, adding the company has examined every aspect of the flight and how they can step up protection. This also includes the use of antimicrobial treatments, disinfectants, and PPE.