Ron Silverman loathes to say anything good about COVID-19, but when the question comes up of the effect of the pandemic on Jet Linx, of which he is chief commercial officer, the numbers don’t lie.
“Our industry saw unprecedented demand that started during COVID,” said the New Jersey native who’s been in Omaha for two years. “People who could afford to fly privately, who didn’t want the exposure to COVID or to get on an airplane with 200 or 300 other people, started flying privately. And when they realized the efficiency and the advantage of flying private, they all decided this is what we’re going to do, and we had this mad rush of demand in our industry.”
In 2021, Silverman said, the industry was booked almost solid, to the point Jet Linx temporarily suspended sales of its Jet Card memberships to ensure the company’s available aircraft could satisfy demand—a situation that has yet to return to pre-pandemic normal.
“Things have calmed down a bit in 2022,” he said. “People are not flying as much as they did during the high travel times in 2021. That said, we’re still very busy. We’re still flying above pre-COVID levels, so we’re busier than we were normally, but we have it more under control.”
Silverman’s assessment aligns with nationwide trends. Data sets from Argus International’s TRAQPak aviation analytics tool shows private plane travel in North America increased by 17% in the first half of 2022, compared with 2019. Put another way, private jets account for 25% of U.S. flights, per research and consulting firm WingX.
When one considers the price tag for flying privately, those are telling statistics. As AIN Online reports, after the market for private jets hit bottom in June 2020, rates rebounded to pre-pandemic levels in just six months, averaging about $6,900 per hour for a midsize jet. By July of this year, the publication reported, average fares were up 35% to $9,300 per hour, and climbing.
Diversification has helped Jet Linx weather fluctuations in pricing, costs, and customer demand, even ones that dramatically shifted the industry, such as immediately after the 9/11 terror attacks and the heights of pandemic anxiety. This strategy has helped streamline revenue. For example, the company has changed the traditional charter model through the use of its Jet Card—a tiered membership perk that guarantees cardholders availability to a private jet and guaranteed pricing.
On the aircraft ownership side, the company helps owners maximize their investment by providing a guaranteed stream of income for when the plane is not in use. The company also promises aircraft owners additional savings through enhanced buying power, in-house maintenance, and flight crews.
“If you, as a consumer, go out and buy an airplane, typically you’re going to fly about 100 or 200 hours a year,” Silverman said. “That means your airplane’s going to sit in the hangar and gather dust when you’re not using it. Jet Linx supplements the airplane’s use by putting revenue-generating passengers on it. As a partner, we share that revenue with you, which helps you offset some of the costs of aircraft ownership.”
Passengers weren’t the only group high on the benefits of private aviation during the pandemic. Dave Poole, vice president of business development for Oracle Aviation, said the company set a record through its pilot training program in 2020. The company logged 14,000 hours of instruction, an increase of about 25% over the company’s next best year.
“That was the thing that surprised us the most in 2020,” Poole said. “I think it was mostly because people were forced during the pandemic to slow down a little bit and maybe take stock of their life a little. What we heard was a lot of people said, ‘Hey, I always wanted to do this, so now’s the time.’
“Other people took stock of it in that they wanted to make a career change. ‘I’ve been working office jobs for the last 10 years and I always wanted to fly for a living and it’s now or never.’ That was fascinating to see. We did not anticipate that.”
The spike in flight school enrollment is good news for an industry that’s bemoaned a lack of qualified pilots for years, but it doesn’t address all of the industry’s labor woes. Poole said airplane mechanics are in equally short supply, which is why Oracle has forged multiple partnerships with local technical colleges to help recruit more professionals into the industry.
The latest of these efforts, and arguably the most ambitious, is Oracle’s new FBO (Fixed Based Operator) in Sioux City, which broke ground recently and is expected to be open by next fall. The new 43,000-square-foot facility boasts 30,000 square feet of hangar space and 6,000 square feet of office and classroom facilities for flight school students and other instruction.
“We’re very excited about that project, it will be a really nice addition to the local airport there,” Poole said. “We’ve created a flight school collegiate partnership with Morningside University where we’re doing a bachelor’s degree program for both professional flight and also an aviation
management program.
“We’ve also partnered with Western Iowa Tech, a community college in Sioux City, to do an aircraft maintenance program as a two-year degree. We’re really excited about that as well, because for as much publicity as the pilot shortage gets nationally right now, the maintenance worker shortage is as, if not more, significant. We’re trying to really make that Sioux City location an aviation educational hub.”
Regarding other industry challenges, Poole said crippling supply chain issues have abated somewhat, making it easier to obtain everything from single parts to complete aircrafts.
“Parts availability was a significant problem because large engine manufacturers, propeller manufacturing and refurbishment companies, and all the different companies that give us the backend parts supply—several of them shuttered for months during COVID,” Poole said. “We had an airplane that needed a simple pressure switch that had to be manufactured, and it took us 10 months to get that part.”
As for future opportunities, both executives said the mergers and acquisitions activity that dominated the industry heading into the pandemic has already re-emerged and is poised to spur big headlines in the new year.
Jet Linx, which purchased a south Florida competitor in March 2022, is particularly active looking for logical M&A prospects. Silverman noted that the constant drive for capacity delivered via local service provides motivation for growth.
“Mergers and acquisitions are a big play for our company,” Silverman said. “That’s the quickest way to grow, and we’ve made a concerted decision that that’s really the way that we’re going to grow our bases. In fact, we have an individual based here in Omaha whose sole job is to speak to other aircraft management and charter companies and find out their appetite for merging or having us acquire them.”
Poole said strategic acquisitions in overlooked or underserved areas offer Oracle the benefit of expanding its clientele—often at a lower overall cost than trying to slug it out in markets already saturated with providers.
“There are a lot of blue-chip businesses in small towns across the Midwest that don’t have access to aviation assets, because no one’s ever really counseled them on that or shown them what options are out there,” he said. “We see that as a plan for success moving forward in possible
future locations.
“We’re always looking at targeted opportunities,” Poole added. “We don’t believe in taking a shotgun approach or just gobbling up real estate. We want to look at markets that are underserved, that fit a model where we believe we can be successful.”
To learn more, visit jetlinx.com and oracleaviation.com
This article originally appeared in the February/March 2023 issue of B2B Magazine. To receive the magazine, click here to subscribe.
