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Aviation Blog

Comparing NetJets And Wheels Up’s Divergent Growth Plans As Demand For Private Jets Soars – Forbes


NetJets and Wheels Up, two of the largest providers of private jet travel in the U.S., are charting markedly different paths for growth as they navigate what’s becoming a turbulent operating environment.
For those who sell private jet travel – operators of the aircraft and charter brokers – demand has continued its upward trend to record levels in recent months. There are no signs it’s letting up.
Wheels Up Chairman & CEO Kenny Dichter (center) is accelerating growth, while rival NetJets is … [+] putting the brakes on sales. The divergent moves come as private aviation providers are struggling to cope with record demand. (AP Photo/Richard Drew)
Argus TraqPak, which has been tracking monthly flight activity in North America since 2007, reported record flying in June and July with over 300,000 flights. It expects the trend to continue into the Fall.
Richard Koe, managing director at WingX, which also tracks business aviation activity says, “The predicted upswing in business aviation activity this summer has exceeded expectations, and is apparently unaffected by recent concerns around delta variants.”
What should be every CEOs dream is instead creating some plop, plop, fizz, fizz days, particularly on the front lines. Delays are roiling the system and aggravating customers who spend between $5,000 and $20,000 per hour to not be inconvenienced.
A survey in July of subscribers to Private Jet Card Comparisons, a buyer’s guide to private aviation travel where I am editor, found nearly 20% of respondents had experienced service letdowns in recent months.
Much of the mayhem is beyond the control of providers. Delays in fueling aircraft are caused by lack of trucks and drivers. Caterers can’t procure requested items on short notice. One large operator reported a 300% increase in complaints about ground transportation in June. When there is a mechanical, even if the part to fix it is available, MROs says that overnight shipments arrive late. Why? Expedited delivery services are overwhelmed with online shoppers. There are labor shortages everywhere.
Peder Von Harten, vice president of Nicholas Air, which sells jet card memberships on a fleet it owns, says, “A simple fix on an airplane that used to take one or two days now takes five or six.”
NetJets has taken delivery of 25 new private jets so far this year. It expects to spend around $2.5 billion to add another hundred by the end of 2022. In a long-tail industry, where less than a handful of charter and fractional fleet operators have that many aircraft in total, it’s clear the unit of Berkshire Hathaway is accelerating growth as it reports month after month of record flying.
Still, the industry leader put the brakes on sales during the past 90 days. First, it pulled its Classic jet cards. Its most expensive card product, the Classic cards enabled clients to book domestic flights in the Continental U.S. with as little as 10 hours’ notice. Whether you were in New York or North Dakota, you could wake up in the morning and by the afternoon be boarding a NetJets aircraft to wherever there was a runway long enough to land.
It also pulled the super midsize Cessna Citation Latitude from its Elite jet cards, which allow you to book up to 24 hours before departure. In early July came the big news. NetJets suspended sales of its entry level Embraer Phenom 300 and Citation XLS offerings across all products – fractional ownership, leases and jet cards. It also hiked prices on the Elite cards between two and eight percent. For new customers, a 25% surcharge on 45 peak days was replaced by a total blackout.
A spokesperson for NetJets says it doesn’t have a date to restart sales of the paused programs, however, it is building a long waitlist.
On the flip side, Wheels Up, which recently started trading on the New York Stock Exchange after a SPAC merger, is ramping up sales. Using a membership model, it books customers on a fleet of owned and managed aircraft as well as jets it charters from third-party operators.
During its second-quarter earnings call with analysts last week, Wheels Up said one-third of its off-fleet flights are now part of guaranteed rate programs. The GRPs entail buying out aircrafts from other operators from one day to a year, essentially blocking their entire capacity.
Typically brokers charter for their clients on a flight-by-flight basis, although Directional’s Sentient Jet has been using the GRP technique for years.
By gaining control of the aircraft’s schedule for extended periods of time, it gives the seller more flexibility to accommodate late bookings and deal with delays.
Wheels Up chairman and CEO Kenny Dichter says GRPs were “virtually zero” at the beginning of the year.
It is also providing extra incentives for owners of aircraft it manages to increase their availability for its members who pay up to $17,500 to join Wheels Up and then deposit up to $400,000 in funds they can use like a debit card. Lead-time to book ranges from 24 to 72 hours based on type of aircraft, how much you deposit and where in the country you are flying from.
Dichter told the analysts, “We have made the strategic decision to invest in the growth of our business while some industry participants are pulling back. This gives us even more conviction and confidence to pull forward.”
The company also upped its full-year sales forecast from $912 million to between $1.05 and $1.1 billion on surging demand. However, it cut its earnings estimates amid rising costs, including ensuring it has the bandwidth to fly members when they call.
For NetJets, without having entry-level jets available, it risks missing out on the continued flow of new consumers who want to fly privately. For Wheels Up, as it accelerates growth, it risks angering well-heeled clients if there are delays.
In the Private Jet Card Comparisons’ survey, subscribers who had a service letdown rated their provider poor or below average by an 8-to-1 margin.

I’m Editor-in-Chief of DG Amazing Experiences, a weekly e-newsletter for private jet owners and Private Jet Card Comparisons, a buyer’s guide comparing over 250 jet card programs from major players like Flexjet, Jet LinxNetJets, Sentient Jet, Wheels Up, VistaJet, and XO to newcomers like FlyExclusive and boutique brokers. You’ll also find performance profiles of popular private jets, from turboprops King Air 350Pilatus PC-12 and HondaJet to the Phenom 300, Challenger 300 and 350, Gulfstream G450, G550, G650, G700, Bombardier’s popular Global Express family, the iconic Learjet and S-76 helicopter used by both Queen Elizabeth and Donald Trump. There’s a free guide explaining various options and even a guide for first-timers and specifically what you need to know before chartering. And before you fly, find out what’s an FBO. You’ll also find a Deal Book, cataloging M&A activity and launches by key players. I’ve spent my working career in travel and luxury media, for 14 years at Travel Agent magazine, where I began as a reporter, then covered the airline industry as Aviation Editor and ended up rising to Group Publisher. In 2000 I started Elite Traveler, a consumer lifestyle magazine distributed globally aboard private jets, where I was President and Editor-in-Chief until 2014. In 2007, I co-authored of “The Sky’s the Limit: Marketing to the New Jet Set.” In 2014 I wrote “23 Ways to Create More Sales Opportunities 25 Minutes,” and in 2016 I co-authored “Secrets of Selling to the Super Rich.” Verb named me as one of the Top 25 Digital Luxury Experts to follow. For more private aviation and news on jet cards, private aviation memberships, and fractional ownership, visit Private Jet Card Comparisons’ news updates.


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