|The Bahamas Investor Magazine
January 4, 2008
January 4, 2008
When US secretary of state Condoleezza Rice travelled to The Bahamas for an official visit, there was no chance she would end up sitting next to a tropical-shirt-clad tourist en route. That’s because she flew on a private jet into Nassau’s exclusive Million Air private airport, was greeted by then US ambassador John Rood and Bahamian government officials, and treated to a Junkanoo rushout. Dr Rice is not alone. A growing list of dignitaries, executives and celebrities is opting for private air travel instead of commercial business class service in order to get where they are going faster, with greater comfort and with a heightened level of privacy.
The booming private aviation industry has created opportunities for Bahamians to fill this market niche and meet the needs of this elite clientele. In New Providence, Million Air, with its international network and global name recognition, has emerged over the past 10 years as the preferred port of entry for those who fly private. In fact, the fixed base operation (FBO), which is part of the US-based Million Air Interlink Inc franchise, handles the vast majority of private flights coming into the capital.
An eclectic clientele
According to Million Air marketing and customer development manager, Ruth Thackray, as many as 15,000 passengers come through the small airport terminal each year. The passenger list runs the gamut from movie stars and business executives to high-net-worth second-homeowners and foreign dignitaries in town on business.
Despite efforts to preserve their clients’ privacy, the eyes of the world were cast upon the small airport in March 2007, as the body of the late Anna Nicole Smith was flown from Florida into Nassau to be buried next to her son—all of it captured on live television feeds. A few months later, award-winning actor John Travolta, nearly as famous for his love of aviation as for his films, personally flew himself and his family into Nassau for the grand opening of The Cove hotel on Paradise Island.
The gala event attracted other big-name celebrities who kept the Million Air facility busy. Actress Lindsay Lohan, Entourage star Jeremy Piven, Hollywood power couple Nick Lachey and Vanessa Minnillo, and singer Janet Jackson were just some of the 46 guests who flew in on private planes (and 88 who chartered flights), shunning the hassles and public exposure of commercial air travel.
The 25-acre Million Air FBO, located next to Lynden Pindling International Airport, includes a 12-acre parking ramp for aircraft with line-service technicians and refuelling facilities, as well as an aircraft hangar and an executive aviation terminal, complete with a soon-to-be-upgraded pilots’ lounge. Thackray says their 24-hour, seven-day-a-week service, which includes anytime clearance by Bahamian customs and immigration officials, is what their clientele has grown to expect. “You don’t have long lines here. You literally can come in, get out of your limousine, walk into the terminal, get on your plane and off you go,” she explains.
Public relations manager Anthony Hinsey adds that Million Air in Nassau handles all kinds of aircraft ranging from fighter jets to helicopters, small and large prop planes, and once, even a blimp. The fastest private jet to fly into Million Air’s facility was a Citation 10, generally considered to be one of the speediest business jets available. One of the most luxurious craft the Nassau-based FBO has serviced was a triple-decker Boeing 777 complete with a movie theatre, exercise room and private bedrooms, which had been chartered by a well-known televangelist.
Family Islands direct
Advances in the aviation industry have enabled passengers to reach some of the more far-flung Bahamian islands without having to stop in New Providence en route. “Eighty per cent of our clients come in directly from the United States or Europe, and with more and more planes like the G4s, G5s and Global Express coming online, there’s no longer a need to stop for refuelling on their way into the Family Islands,” says Granville Bethel, director of operations and partner at Earco Elite.
The Eleuthera-based company does not own or operate any FBOs, but offers a full slate of services to the private traveller, pilot and crew. The majority of their business involves travel to and from Eleuthera, Abaco and Exuma, but as the number of developments and resorts across the archipelago has risen, Earco Elite has expanded its operations to include 13 network staffers located in islands and settlements with less traffic.
Earco Elite has also worked with its fair share of Hollywood’s elite. Earlier this year, Matthew McConaughey, Kate Hudson and Donald Sutherland flew into Eleuthera on a G5 to do a week of on-location filming for Fool’s Gold, expected to be released later this year. And playwright and actor Tyler Perry flies private when he visits his recently purchased Exuma property.
According to Bethel, though, the majority of their business comes from corporate America. “We see a lot of people with a Fortune 500 background coming in. American businesses are doing well and a lot of them are writing private travel into their financial forecasts,” he says. In early 2007, Philip Morris’ parent company, Altria Group, hosted an annual corporate conference in Exuma and over the course of a week, Earco Elite handled more than 50 runs of a G4 and G5 aircraft. Other Fortune 500 companies sending executives to the Family Islands on private planes for meetings, investment due diligence or just to relax include Citigroup, General Electric and Kraft Foods.
Private air travel comes with a big price tag. And although many who prefer this mode of transport can well afford the costs associated with owning their own jet, Bethel points out that they simply don’t want the headaches associated with maintenance. This has presented a sizeable niche market for fractional ownership. NetJets Inc led the pack with this type of timeshare ownership which was designed to appeal to people who fly 50 or more hours a year, back in 1986.
Another business mogul who has visited Exuma on a private plane is legendary financier Warren Buffett. He saw such potential in the private travel market that in 1995, he purchased his own timeshare in the NetJets programme and a few years later, his company, Berkshire Hathaway, purchased the business.
Named 2007 winner of Robb Report’s Best of the Best in Air Charter and voted Best Charter Service in 2007 by Professional Pilot magazine, NetJets continues to lead the pack with a worldwide fleet of more than 700 aircraft. One of their more famous clients, songstress Mariah Carey, has also utilized her NetJet ownership to visit the islands of The Bahamas.
Fractional ownership starts at $412,500 for a 1/16 interest, which provides 50 hours of flying time per year. The fees increase depending on the type of aircraft involved. Fractional owners also pay a monthly management fee, as well as an occupied hourly fee that covers direct operating costs for the time they spend in-flight. No matter when an owner needs to travel, regardless of his or her desired departure time, either their aircraft or an identical one will be dispatched—a huge plus to those who need to travel on the spur of the moment.
NetJets and New York-based Marquis Jet Partners teamed up in an exclusive alliance to offer yet another means of accessing this exclusive travel option. Marquis Jet Cards allow customers to buy flying time rather than having to invest in the actual ownership of a private aircraft. The cost of the 25-hour card ranges from $119,900 to $339,900, depending on the type of jet being used. Cardholders need to give a mere 10 hours’ notice for a domestic US flight and 48 hours’ notice for an international trip. “We’re a luxury limo service in the air,” says Kevin Diemar, account executive for Marquis Jet in Miami. “You pick up the phone, you tell us your catering order, you tell us where you want to go, when you want to leave, and we take care of everything. We find the closest airport to you and you are only billed when you are in the jet,” he explains.
For those who have neither the budget nor the need for so many flying hours, but still want the privacy and efficiency offered by private air travel, Texas-based Connect-A-Jet has created a booking service that links all US-based charter operators in a real-time online booking system. At press time, the completed system had an anticipated online launch date of late December 2007. Connect-A-Jet also coordinates all ground transportation, in-flight catering and provides around-the-clock real-time flight tracking.
New types of aircraft are appearing on the scene regularly to meet the demands of companies offering private air travel service. One new entry in the United States is a type of craft classified as a very light jet (VLJ). With compact engines, a maximum take-off weight of 10,000 lbs and just four to eight seats, this micro-jet can fly over 1,000 miles non-stop at speeds of up to 460 mph.
By 2007, the US Federal Aviation Administration (FAA) had given two companies—Eclipse Aviation, whose second largest investor is multi-billionaire Bill Gates, and Cessna Aircraft Co, a part of Textron Inc—certificates to build VLJs. And others are expected to follow suit. Eclipse has already received about 2,500 orders for its Eclipse 500 VLJ and Cessna is working to fill 300 orders for its six-seater Citation Mustang VLJ.
In September 2007, DayJet Corporation announced it had received FAA approval to use VLJs in its per-seat, on-demand jet service—in effect allowing these smaller aircraft to be used for charter business, where customers can rent a single seat instead of chartering the entire plane. Thackray says her company has high hopes for increased business flying into Million Air as a result of these exceptional new aircraft.
With US flight delays hitting a 13-year high last summer, and warnings from the FAA that this trend is set to continue, the future of private air travel seems secure. Thackray points to the growth of mega mixed-use resorts throughout The Bahamas and the emergence of private travel options that suit many different types of travellers as sure signs that Fixed Base Operations such as Million Air will continue to see an increased level of traffic.