ET Insider – February 6, 2007

Elite Traveler Insider –

February 6, 2007

Elite Traveler Insider

By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler Magazine  

1. Global Warming and Private Jets

2. Russian Pays $3.3 Million for George Michael’s New Year Concert.

3. CEOs Increase Private Jet Travel to India.

4. M.I.T. Numbers Affirm the CEO-White Collar Worker Gap.

5. Lufthansa Calls Private Jets a Core Part of Strategy.

“We have many elite clients. We distribute Hamptons, Yachts and a few others. Everyone goes straight for Elite Traveler magazine. It’s that popular” Lauren Denicolis — Long Island Jet Center, Long Island, NY

1. Global Warming and Private Jets

 

In a recent Reuters interview during the World Economic Forum in Davos, the chief of Europe’s largest private jet operator defended private jet travel amid growing international calls to limit carbon dioxide emissions and cut back on unnecessary air travel.

Mark Booth, chairman and chief executive of NetJets Europe, said his company arranged 50 flights to and from the World Economic Forum in the Swiss resort of Davos, where business and political leaders have been debating ways to react to climate change pressures. Estimates speculated that over 400 private jets were involved bringing top level delegates to and from Davos.

He told Reuters that many of his 1,300 to 1,400 clients were concerned about the need to tackle global warming, but were unlikely to give up private air travel in response.

“We are working with people who really make economies hum. We are talking about the leaders of business around the world… It’s not going to happen,” he told Reuters. “If you cut down on people flying, you cut down on economic growth, you cut down on quality of life.”

While declining to elaborate on the specifics, Booth said his company was working on a remedy to help offset its carbon emissions, which he hoped to present within six months. This might include carbon trading or a green investment, he said.

“NetJets Europe is committed to taking a leadership position on this issue. It’s the right thing to do, and it’s also good business for me,” he said.

In the meantime, Booth said NetJets — which is part of Warren Buffett’s Berkshire Hathaway Inc. — was in high demand for its fractional ownership plans, which offer wealthy clients access to private jets without having to own one. Booth cited “big growth” across both its corporate and individual segments, driven in part by a strong global economy and generous bonuses and salaries for business leaders.

Airport security hassles and commercial flight delays had also driven a shift from viewing private aviation as “nice to have” to an acceptable travel option for many, he said.

“The question is, do you want CEOs sitting around in airports trying to connect to aircraft? And shareholders are saying no. That is the change,” he said.

Last year the company operated 65,000 flights in Europe, equivalent to a plane taking off or landing every eight minutes — some 40 percent more than in 2005.

“We are just trying to get us enough planes to keep up with our sales, that is our big issue at the moment,” he said. “I can add as many clients this year as I have capacity for aircraft.

“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

2. Russian Pays $3.3 Million for George Michael’s New Year Concert.

 

Singer George Michael pocketed $3.3 million for performing for 75 minutes at a Russian billionaire’s New Year’s Eve party, The Daily Mail reports.

The sum — which works out at nearly $50,000 a minute — is thought to be the largest a recording artist has earned for a single gig. The star was paid the handsome amount after he cancelled his own New Years celebration to sing for his client Vladimir Potanin’s family, friends and business associates in Moscow.

According to the Daily Mail, guests were treated to 13 of the singer’s hits in rapid succession. The gig lasted from 3.30am to 4.45am on New Year’s Day as the highlight of the event.

“George was flown in on the 30th. He went to Red Square on the morning of the 31st. He went to the venue late and started performing at 3.30am. This was a private closed party only for the closest friends of Mr Potanin. There were a lot of officials and wealthy Russian individuals,” a security source said.

“The gig lasted an hour and he left the venue at about 6am and flew straight back to London on his own private charter jet. It is always more convenient to deal in cash and George seems to be happy with that arrangement,” the source added.

Michael, who has given hits like ‘Careless Whisper’, ‘I’m Your Man’ and ‘Last Christmas’, is said to have taken most of his payment in cash.

Mr Potanin is worth more than $8 billion, and is ranked by Forbes magazine as Russia’s ninth-richest individual.

“Women have complimented the jewelry. The following companies keep Elite Traveler in their aircrafts — Net Jets, Charter Communications, Lockheed Martin, US Dept. of Treasury.” Anah Joffroy — Signature Flight Support, Englewood, CO

3. CEOs Increase Private Jet Travel to India.

 

As India becomes a regular stop for corporate CEOs, more and more are deciding to combine business and pleasure, and that is becoming easier as more and more corporate heads arrive on their own jets.

The growing number of corporate honchos flying into India in their private jets is set to double in a couple of years. “Last year we handled close to 800 flights to India. Our projections are that there will be more than 2,000 flights in 2009. Certainly, India is the flavor.” said Greg Evans, CEO Universal Aviation, a private jet management company during a recent press conference for India’s business media.

Evans pointed out that private and business jet traffic to India had been growing at a healthy 25-30 percent over the past three years and was set for an exponential increase.

“When decisions worth millions of dollars rest on the outcome of business visits, private aircraft travel is no longer considered a luxury,” he noted. “Corporate chieftains want quick processing on landing and take off and internationally the best time we have clocked is 15 minutes to collect baggage, clear customs, immigration and out of the airport, though on average it takes around 30 minutes,” Evans conceded.

“We place the magazine everywhere in our building and on every one of our planes” Maria Fente — Starlink Aviation, Dorval, QC

4. Boeing Launches the BBJ-3.

Another new private jet type is launching – a new, larger Boeing Business Jet.

In the weeks before Christmas, Boeing announced that it was ready to offer what it’s tentatively calling the BBJ-3, a modified 737-900ER that can be customized to suit the taste of the owner, whether that be a captain of industry or a head of state.

The new BBJ-3 won’t be launched until Boeing finds a buyer for it. But Boeing is pitching the plane as a bigger, better version of its existing line of business jets. “BBJ customers value long-range capability and cabin size, and this product offering enhances both,” Boeing Business Jet president Steven Hill said in the statement announcing plans for the new jet. The announcement came at the Dubai air show.

The BBJ-3 would have 1,120 square feet of cabin space (more than the average New York apartment!!!), making it more than a third bigger than the original Boeing Business Jet. It also would have a range of more than 5,400 miles, thanks to five auxiliary fuel tanks. Buyers have the option of adding additional fuel tanks that can stretch the range of some models as far as 6,900 miles – enough to fly from Los Angeles to London nonstop.

Boeing says the largest group of buyers has been private individuals, who’ve bought 40 percent of the BBJs. Another 36 percent have been bought for government heads of state. The rest were sold to corporations and jet charter operators. Boeing lists 737-700s, — 800s and — 900s at between $55 million and $77 million apiece, and owners can spend another $15 million furnishing the jets.

While Boeing says typical private jet configurations range between eight and 20 passengers with bedrooms and bathrooms with showers, commercial airlines put as many as 170 seats into the planes.

“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

5. M.I.T. Numbers Affirm the CEO-White Collar Worker Gap.

 

M.I.T. numbers show that it’s not simply targeting the Rich vs. the Poor when it comes to luxury marketing, but the Super Rich vs. the Rich. In fact, more and more reports show the Mass Affluent — those households with an Income between $100,000 and $250,000 — are struggling to make ends meet.

While the Mass Affluent purchase luxury goods and services when they can afford to, according to research by high-net worth specialist Prince & Associates, the Super Rich have become the most lucrative target. For the Super Rich, price is no object and their wallets have no limit.

The MIT statistics back this up, showing that the difference between the top three positions at global corporations and the compensation for the average white- collar worker has increased over 500% from the 1980’s to today. Giving further focus on the division between Super Rich and Mass Affluent, the increase between the Sixties and the Eighties was only about 75%

1960 – 1969 39 to 1 1970 – 1979 40 to 1 1980 – 1989 69 to 1 1990 – 1999 187 to 1 2000 – 2003 367 to 1

“Fascinating, they always want to buy something they see. The products offered and destinations are just what my customers are looking for!” Mary Bullock Bagosy — Galaxy Aviation, Orlando, FL

6. Lufthansa Calls Private Jets a Core Part of Strategy.

 

I am a particular fan of Lufthansa Private Jet for one simple reason — it makes sense!

The basic premise is to let the German carrier coddle top executives and leisure flyers in the luxury of their intercontinental First Class cabin with its flat bed seating and gourmet cuisine. But then, instead of the hassles of a major hub, elite travelers are met plane-side and whisked to a private jet for their onward connection. The service, which started at Frankfurt and Munich, has now been expanded to Zurich as part of Lufthansa’s ownership in Swiss.

Interestingly, the highest demand (accounting for about 60 percent of the total) came from point-to-point connections to around 1,000 destinations in Europe and the Russian Federation. But the number of private jet flights offered in combination with long-haul services through the Frankfurt, Munich and Zurich hubs has also increased significantly since mid-2006.

Customer satisfaction scoring over 90 percent shows how positively customers are responding to the Lufthansa Private Jet service. “We are delighted that our innovative product has become so firmly established in the market so soon after its launch. Lufthansa Private Jet, offering customers à la carte mobility, has meantime become a firm fixture in our full-service strategy,” observed Thierry Antinori, Executive Vice President, Marketing and Sales at Lufthansa Passenger Airlines. “Our customers appreciate especially the opportunity of enjoying the exclusive Lufthansa First-Class amenities on the Private Jet service and making their journey even more comfortable.”

Lufthansa’s accord with NetJets is consequently being extended for a further five-year term and cooperation intensified with the private jet provider. From now on, more jets will be on call, daily, in order to accommodate increased demand for the Lufthansa Private Jet service. In the future, the Falcon 2000, which seats up to ten passengers in comfort, will also be available to customers daily.

“I’ve seen a lot of people reading Elite Traveler; they love the magazine they can’t believe our FBO gives it away for free” Carol Hammonds — Hammonds Air Service, Houma, LA