Flying Business Class
Charter flight companies like Wisconsin Aviation are steadily climbing in the wake of the recession
Back in the late fall and early winter of 2008, just as the national economy was teetering on the brink of disaster and Americans were bristling at the prospect of bailing out the country’s banks, the chief executives of the Big Three automakers traveled to Washington on private corporate jets to ask for their own bales of cash.
It did not go well.
“Couldn’t you all have downgraded to first class or jet-pooled or something to get here?” a peeved Rep. Gary Ackerman, D-N.Y., asked the execs.
The irony was rich all around: Beggars were being very choosy choosers when it came to their preferred method of transportation; automakers were eschewing the automobile to get from point A to point B; and one of the auto industry’s more vulnerable competitors, the charter flight industry, was bearing the brunt of the auto executives’ bad PR.
Then again, it was a teachable moment for those in the charter jet biz, who insist they have a great story to tell that has little to do with shrimp cocktails or sneering, bad-behaving billionaires.
“There definitely was an issue with that,” said Grant Goetsch, vice president of flight operations for Wisconsin Aviation, a charter flight provider based in Watertown. “Some companies actually trimmed back [their use of charter flights] a couple of years ago. They didn’t want to be seen as flying in to see a customer on a business jet. … That was poorly handled, as far as going up to Washington and asking for money. But by the same token, in reality, the people who fly in business aircraft, most of the time it’s a very good tool for them, and if you really worked the numbers, it makes business sense, and that’s what we try to sell.”
An image problem?
The reason the charter jet industry had to fight off the bad press associated with those auto executives’ jet-setting lifestyles, of course, is that there remains a stigma associated with flying on private planes – at least among the general public. Just as cell phone users were once pilloried – before cell phones became standard-issue gear for every 11-year-old in North America – skirting the hassles of commercial flying in favor of a private cabin is still seen in many circles as unforgivably indulgent.
But according to Goetsch, that’s a prejudice that can rob companies of an opportunity to make the most of their time and resources.
Goetsch estimates that Wisconsin Aviation’s trips are 80% to 85% business-related, and in some cases, he says, ticket prices are either competitive with commercial airline fares or even cheaper. Add to that the time savings for executives whose time is for all practical purposes priceless, and Goetsch would argue that the cost-benefit calculation starts to swing in favor of chartering a flight.
“Oftentimes, people don’t understand what’s hidden in the travel cost [of flying commercial],” said Goetsch. “The ticket prices are the things that people see, so they might look at a ticket price for an individual and see it’s XYZ, then get to the airport, and pay their baggage fees and everything else. Plus they had to get to the airport two hours early, sit there and wait for the airplane, and then if the airplane departs on time, go to the destination, get a rental car, and maybe have to spend the night because it’s not feasible to come back the same day.
“So you need to work all that in to the travel costs as opposed to just ticket prices, what it’s really costing the company, and that’s what most companies care about.”
And according to Goetsch, it’s not just high-level executives and top corporations taking advantage of air charters. There’s an accessibility to such flights that belies their exclusive image, he says.
“It’s much more available to the average business [than people think],” said Goetsch. “It may be 10 people in the business needing to go someplace to make a sales presentation. It does not really matter. We find mid-level managers and workers are going on many of these trips. And a good example would be dealing with a problem with a part somewhere that’s now failing, and you need to take care of your customer, and the time you need to take care of that customer is an hour ago, and the quicker they get up there, the quicker the customer is comfortable that the people are there to take care of them.
“So instead of just throwing one person in a car and on an airline and getting them up there the next day, they now have a team of five people that can get in and deal with the issue, and oftentimes they’re technicians or people that are working on the project.”
According to IBISWorld, charter flying is a $14 billion-a-year business, and growth in the industry has averaged 2.3% from 2006-11. Wisconsin Aviation has been a significant part of that growth, having recently finished its 30th year in business as the largest charter provider in the state. The business, which boasts a fleet of 20 aircraft, currently operates out of Watertown, Madison, and Juneau, Wis., and flies to and from pretty much anywhere in the U.S. (excluding Hawaii), while also operating in Canada, Mexico, South America, and the Caribbean.
Still, for a company with such a long tenure, it continues to face an uphill climb when it comes to educating consumers, says Goetsch.
“We’re still the best-kept secret. A lot of people have heard of flying charter, but they don’t know where to start, and that’s the biggest issue.”
At the same time, says Goetsch, the company is starting to bounce back from the downturn that followed the 2008 financial crisis, when business services were in lower demand everywhere – and a few auto execs who showed up in our nation’s capital with hats in hand temporarily made charter air companies targets in an ongoing class skirmish.
“There definitely was an effect right after things started going south, and here a little over a year ago, a year and a half ago, things started to pick up,” said Goetsch. “I think often businesspeople understand that they need to make business work and get a competitive advantage, and a lot of the businesspeople, especially in our area, have been doing that. They have been going out and flying charters. It’s actually been kind of bonkers lately.”
Sign up for the free In Business Wisconsin Report – your weekly resource for local business news, analysis, voices, and the names you need to know. Click here. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.