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Elite Traveler – ET Insider – August 1, 2006

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ET Insider – August 1, 2006

Elite Traveler Insider – about the private jet lifestyle …

August 1, 2006

By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler, the private jet lifestyle magazine

Welcome to the latest issue of Elite Traveler Insider, the bi-weekly newsletter designed to update our top partners on trends in the private jet lifestyle. This information is provided to offer a better understanding of how to target these globetrotting elite travelers, their impact on your business and other trends that affect you. Remember, that private jet travelers are paying up to $10,000 per hour to fly by private jet, so these super rich consumers could be and should be your best customer. We talk about them and how you can get more of them and more from them.

  1. It’s a Bird, It’s a Plane, It’s a Honda
  2. Air Taxis Add Wings to Booming Private Jet Market
  3. India Surges as Key Luxury Market
  4. Supersonic Private Jet on the Way?
  5. The cost of gas hikes — $386 million per day
  6. More Luxury Partnerships

“We place the magazine everywhere in our building and on every one of our planes”

Maria Fente – Starlink Aviation, Dorval, QC

It’s a Bird, It’s a Plane, It’s a Honda….

Well, honestly I never thought we would be covering Honda in Elite Traveler. However, Honda is a successful company and they know a good thing when they see it – the private jet market.

Last week, Honda said it will enter the market for private jets. It is establishing a new American company to apply for FAA (Federal Aviation Administration) certification, with production expected to start around 2010. Honda being Honda, the design is radical with engines mounted above the wing and an all-composite fuselage. Honda says that the new aircraft has better fuel efficiency and higher payload than rival aircraft. In tests, the seven-seater has achieved an altitude of 43,000 ft and a speed of 412 knots.

Another Elite Traveler Success Story: A single Elite Traveler reader just bought 12 Bvlgari necklaces from our July/August issue!

Air Taxis Add Wings to Booming Private Jet Market…

Where will you find the rich people this summer? In their private jets crisscrossing the country – and the world. And for anybody who thinks the surge in private jet travel is a fad, buckle up. The boom is only beginning.

A recent New York Times article pointed out jam-packed planes, endless delays, long security lines and sprints through an airport to make a connecting flight are making the wealthy opt for private jets for more of their flying.

Enter the air taxi. The idea is to offer faster, more convenient air travel at a price that falls somewhere between traditional private jets and commercial airlines.

For years, questions about the size of an air taxi market have been largely theoretical. But that will change this year, as Eclipse Aviation of Albuquerque begins building the Eclipse 500, a six-seat plane. The company expects the plane will receive its long-awaited certification from the FAA as soon as this week.

With the Eclipse, two start-up airlines, Linear Air and DayJet, say they can ferry travelers to hard-to-reach outposts with less hassle.

“One of the first things they teach you in sales is to look for the pain,” said William E. Herp, chief executive of Linear Air, an air charter company that has ordered 30 Eclipse planes at a total cost of $50 million. “And there is a lot of pain out there among business travelers who are flying on commercial jets.”

Air taxi operators say they can offer customers seats ranging from $1 to $3 a mile per passenger, compared with $9 to $13 a mile on charter jets, or up to $15 a mile on slightly larger private jets. Regional commercial airlines like SkyWest, by contrast, average less than 16 cents a mile flying 50-seat planes.

You still need to be Rich: The 33-foot Eclipse plane, which will cost $1.5 million, can carry two pilots and four passengers and fly at speeds of more than 400 miles an hour. By comparison, a twin-engine Cessna CJ-1, a jet that also carries four passengers, costs about $4.3 million and can fly at speeds of 448 miles an hour.

Eclipse, which has received more than $500 million in investments, including an undisclosed sum from Microsoft’s founder, Bill Gates, has received contracts to build 2,500 aircraft for a total of $3.5 billion in sales, an order book big enough to keep the company busy through late 2008, said Vern Raburn, Eclipse’s chief executive. Raburn, an early employee at Microsoft, is a friend of Gates.

Other makers are rolling out planes that could also compete for a slice of the air taxi market. Adam Aircraft, based in Englewood, CO, is awaiting federal certification for its A700, a six-passenger light jet (or five with a bathroom) that costs $2.25 million. Embraer Air’s four-passenger Phenom, which costs $2.85 million, is expected in 2008. And on Tuesday, Honda, after years of study, announced that it would build a six-seat jet with a top speed rivaling that of the Eclipse (see Item 1).

“This is one of the most promising aviation markets in years,” said Richard Aboulafia.

Linear Air is trying to steal disgruntled travelers from the major airlines in major metropolitan areas. “We prefer to fish where the fish are,” the company said. “There are more people for the car-service-with-wings model in New York than any other place in the country. And that’s why we are going after Washington next.”

As an example of air taxis, take a Boston-based consulting firm whose managers occasionally visit a client in Elmira, N.Y. On a commercial airline, the limited schedules would force them to fly at 5 a.m. from Logan Airport in Boston through Newark to get to Elmira, where they would hold their meetings and then return home around 11 p.m. On short notice, the tickets cost more than $600 apiece, or about $2,400 for a team of four.

With Linear Air, they drive directly to the plane at Hanscom Field, in a suburb of Boston, for a 7 a.m. direct flight, hold their meetings in Elmira and fly out at 3 p.m., returning to Boston at 4:30 p.m. Total cost for the air taxi: $3,000. (With the Eclipse jet, he noted, the flight time to Elmira would be cut from 90 minutes to 45 minutes.)

DayJet has already ordered 239 Eclipse 500s, making it Eclipse Aviation’s biggest customer. DayJet is working with five cities, including Lakeland and Gainesville, to establish “Day Ports” where there will be a DayJet desk, rental car counters, wireless Internet and snack bars.

“I’ve had to increase my copies because the magazine goes so fast. I try to keep one for myself when I can. The pictures inside are so breath-taking.”

Donna Reed – YYJ-FBO Services, Canada

India Surges as Key Luxury Market…

The following is from The Financial Mail:

Already the world’s fourth-largest economy, India is second only to China in its headlong rush to riches. By the middle of this century, India, like China, will dwarf all Western economies except America. But with its poverty and crowded, crumbling cities, can India really justify its mantle as a rising super-economy? Mumbai is home to Asia’s largest slum. It is also home to Rolls-Royce’s latest car dealership. And the car-maker to the rich and famous is confident of selling at least one £500,000 Phantom model a month, and may do far better. After all, there are 30 U.S. Dollar billionaires in India, and the number is doubling yearly.

Rolls-Royce is just one of the global luxury brands climbing aboard as India’s economy takes flight. Gucci, Jimmy Choo, Louis Vuitton and Prada are among the designer names to have launched or beefed up an Indian presence in the past year.

And India’s super-rich are spending like never before. Property in Mumbai’s best areas – albeit within sniffing distance of the city’s reeking slums – now outprices London’s Knightsbridge, making it, per square foot, the dearest real estate on earth.

“Two million dollars will not go very far if you are thinking of a decent apartment in some parts of town,” says Ajoy Kapoor of Saffron Group, a consultant and property fund manager based in Mumbai’s Nariman Point, the premier business district.

At the Taj Mahal Palace Hotel, Mumbai’s answer to The Ritz, the clientele has changed. Built in 1903, the Taj has played host to a string of celebrities such as Noel Coward and The Beatles. Prince Charles has twice enjoyed the $3,800-a-night Rajput Suite.

But today, the guests are more business oriented. Hardly a week passes without a visit from the chief executive of a global corporate giant, according to general manager Farhat Jamal. Revenue at the hotel is up 45%. Jamal’s handheld computer alerts him to the arrival of VIPs. On any one day, as many as four will fly in by private jet.

‘I like to know when guests arrive in their own planes so we can meet them at the runway,’ he says.

Of course, Elite Traveler is there with our BPA-audited worldwide circulation in over 90 countries, ensuring your message always hits the mark.

“Very beautiful magazine, our CEO’s wife loves it when the new shipments arrive, it’s her favorite magazine”

Ronn Nelson – Northwestern Mutual Air, Operations Milwaukee, WI

Supersonic Private Jet on the Way?

Aerospace International (SAI), based in Nevada, US, has commissioned aerospace contractor Lockheed Martin to design a supersonic airplane, named the Quiet Supersonic Transport (QSST). SAI is confident it can raise the investment needed to develop the plane. The consortium estimates there is a market for 300 QSSTs worldwide and Lockheed Martin’s vice president of research Frank Cappuccio believes there are no roadblocks ahead for the technology. He told Jane’s the QSST has a “100% chance” of success.

But Bill Sweetman, an aerospace and technology editor, notes that the QSST would only appeal to a very select group of customers. “SAI is targeting the jet at extremely wealthy individuals and companies,” he says. The consortium hopes to establish supersonic flights between the world’s major financial centres. Executives could fly between New York and Los Angeles, for example, in just 2 hours and 15 minutes. The QSST will travel 1.6 times the speed of sound. Mach 1.6 is approximately 2000 kilometres (1200 miles) per hour.

“I’m always in awe of the jewelry it’s breath taking”

Javona Perkins – Business Jet Center, Oakland, CA

The cost of gas hikes — $386 million per day

For those of us who are not superrich, The New York Post reports the rise in gas prices and interest rates is pushing up car loan delinquencies, a traditional sign of slowing consumer demand.

“ Most people don’t have a cushion to cover the rises, and they’ll start falling into delinquencies,” said Greg McBride, an analyst at Bankrate.com. Just 39 percent of Americans have enough available assets to cover expenses for three months, while the rest live paycheck to paycheck.

According to his statistics, the result of ongoing fuel price hikes is that year over year consumers are paying $386 million more per day at the pumps. Car loan delinquencies have increased 9.1% and he says the spending at gas stations is coming out of spending in other places.

“We distribute average stuff like Controller and GA News, but Elite Traveler is the best by far. I love your magazine!”

Sherri Palmer – Pacific States Aviation, Concord, CA

More Luxury Partnerships…

In line with the growing trend of companies that target the superrich to work with each other, Marquis Jet today announced that it has partnered with Sotheby’s to provide Sotheby’s clients with a range of benefits.

“We are always looking for ways to enhance the experience of our loyal clients, and we believe they will enjoy having access to the many benefits that Marquis Jet can provide,” noted Sotherby’s Senior Vice President Amy Too Middleton.

According to Ken Austin, Executive Vice President at Marquis Jet, the partnership between Sotheby’s and Marquis Jet provides for a range of special benefits to select Sotheby’s clients, including, when a Sotheby’s client purchases their first 25-hour Marquis Jet Card or a NetJets Europe Private Jet Card, they will receive, courtesy of Marquis Jet or NetJets Europe, a $5,000 donation in their name to the charity of their choice; or, a $5,000 Sotheby’s Gift Card which can be applied to purchases at an auction.

“All of our people, including Shaquille O’Neal,Bo Derek, Maria Shriver and

Reba McIntire love the book. We put them on all of the private jets. Great book!”

Tammye Johnson – FBO AvCenter, Louisville, KY

Douglas D. Gollan President and Editor-in-ChiefElite Traveler Universal Media Building 801 Second Avenue New York, NY 10017 USA

T 646 658 7512 F 212 687 8994 E dgollan@elitetraveler.com or douggollan@aol.com

 

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