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Elite Traveler – ET Insider – July 22, 2008

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ET Insider – July 22, 2008

Elite Traveler Insider –

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July 22, 2008

Elite Traveler Insider

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

CONTENTS:

1. Elite Traveler Featured in The New York Times…

2. Trouble for American Express? Card Holders Cut Back…

3. Elite Traveler Featured on Fox Business News…

4. BusinessWeek: Private Jet Travel Continues to Surge

5. WSJ: U.S. Mass Affluent Consumers Trade Down

6. Clock Sponsorship of elitetraveler.com

7. Send Us Your Editorial!!!

1. Elite Traveler Featured in The New York Times

When The New York Times’ Guy Trebay wanted an expert source on private jet travel trends for his Sunday Styles front page article recently, he turned to Elite Traveler. Below is an excerpt from what was a very interesting and funny piece:

‘…there are signs that those with their own jets won’t be flying in cattle class anytime soon. “The big trend is people upgrading to jumbo jets for private use,” said Douglas D. Gollan, the editor of Elite Traveler, the glossy journal that bills itself as the “private jet lifestyle magazine.”

People who once cruised comfortably in a 12-seat Gulfstream G450, Mr. Gollan said, now gaze covetously at a Boeing Business Jet, a 737 reconfigured to accommodate not 150 commercial passengers but 18 to 25 private ones. “In the land of high fliers,” Mr. Gollan said, the talk is of jumbo McMansions in the sky. “Airbus just signed six orders for private A350s,” at a Swiss trade show, he said, referring to a $180-million jet that in its commercial application accommodates 300 passengers.

Who are the buyers of these behemoths? “Russian oligarchs and Chinese billionaires and Indian steel moguls and Arab royalties,” he said. “But there are also plenty of American entrepreneurs who made their money making widgets, billionaires who pull out of the driveway and nobody knows who they are.”

2. Trouble for American Express? Card Holders Cut Back…

There was more trouble for American Express which uses its charge card database to mail magazines such as Departures to the cardholders billing address. No longer an effective way to reach the Super Rich – who have multiple homes and offices and hop from place to place on their private jets – it turns out the Mass Affluent Departures readers (Median Household Income according to MMR is $190,000) are defaulting on their bills.

A New York Times story today noted AMEX CEO Kenneth Chenualt offered a “bleak assessment” of consumer spending and the company added $600 million to reserves against increased defaults by cardholders in the U.S. alone.

“Credit indicators deteriorated beyond our expectations,” Chenault who said their had been a marked weakening in consumer behavior since January, growing sharply worse in June.

3. Elite Traveler Featured on Fox Business News…

Recently Fox Business News profiled the success of Elite Traveler and Luxus Networks based on our amazing 35% growth in a first half of the year when virtually all media companies were flat to down!

The three minute interview can be seen at the below link:

Doug Gollan Interview

4. BusinessWeek: Private Jet Travel Continues to Surge

According to BusinessWeek, “the real action is in private jets,” according to their report from Britain’s Farnborough Air Show.

Highlights below: “Pricey fuel be damned. It’s full speed ahead on orders for $3 million-plus business aircraft-often from Asia, Russia, or the Middle East. Visitors to Britain’s Farnborough Air Show can easily overlook the display of business jets, tucked down at the end of a runway behind the sexy fighter planes and the big Boeing and Airbus aircraft. But business jets-luxury planes catering to corporate executives and the super-rich-are just about the hottest thing in aerospace these days.

Even as high oil prices crimp airline orders for big passenger planes, business-jet sales are booming. Deliveries are expected to top 1,200 this year, the third consecutive record year for the industry, and most analysts predict the numbers will keep rising at least until 2010. Sales over the next 10 years are likely to exceed $220 billion, more than twice the figure over the preceding decade.

Who is buying all those planes, which start at around $3 million and can run well over $40 million? Many customers come from the growing ranks of the ultra-rich in Asia, the Middle East, and Russia. This year, for the first time, more than 50% of business jet sales will be outside the U.S. “Back in 2001, our orders were split 70-30 in favor of North American business, but now that’s been flipped to 70-30 in favor of international,” says Steven Ridolfi, president of the business aircraft division of Canada’s Bombardier. “We’ve been seeing double digit growth across emerging markets.”

Dodging Airport Hassle Demand from business travelers is rising, too, as time-strapped execs look to escape “the hassle factor of airports and security,” says Colin Steven, vice-president for sales and marketing in Europe, the Middle East, and Africa for the executive-jet division of Brazil’s Embraer. “They want to fly direct, do their business, and get back.”

The expansion is rippling through to aerospace contractors, too. Honeywell Aerospace, for example, recently signed a $23 billion contract with Embraer to supply engines to its next generation of business aircraft. “These are very exciting times, and we see the growth continuing,” says Paolo Carmassi, president of Honeywell’s Europe, Middle East, Africa, and India business. The boom also is lifting the fortunes of private jet charter and time-share companies. London charter outfit Ocean Sky Aviation, for instance, already operates a fleet of 11 jets and has two more on order at a cost of $30 million each. CEO Kurosh Tehranchian figures Ocean Sky’s revenues will nearly double this year, to about $220 million.

One appeal of high-end business jets, of course, is that no commercial airline can match their comfort. At Farnborough, Embraer is showcasing a mock-up of its new Lineage 1000 jet, which lists for $42.9 million and boasts features such as a stand-up shower, double beds, and a private dining room. The company announced the sale of a Lineage 1000 to the Al Habtoor Group, a business conglomerate based in Dubai.

Even Embraer’s lowest-priced business jet, the $3.1 million Phenom 100, has an interior designed by BMW Group’s Designworks/USA, an affiliate of the German luxury automaker.

New Players Unlike the big commercial-jet business, which has been winnowed down to a Boeing-Airbus duopoly, the business-jet sector is attracting new players. Embraer, known mainly as a manufacturer of regional jets, launched its executive-jet division only three years ago after watching a surge in orders at industry heavyweights, including Gulfstream, owned by General Dynamics (GD); Bombardier, and the Dassault Falcon unit of France’s Dassault Aviation (AVMD.PA). Business jets now account for 16% of Embraer revenues, and the company says it expects that share to rise to 25% by 2010.

Will the credit crunch and global financial turmoil take a bite out of private jet sales and charters? Ocean Sky’s Tehranchian thinks not, because the wealth of his clients insulates them from economic squalls. “Any person who spends the sort of money required for a charter at our level has decided this is a lifestyle issue,” he says.

5. WSJ: U.S. Mass Affluent Consumers Trade Down

According to a front-page article by The Wall Street Journal, “Spurred by economic worries, American shoppers have quickly decided that cheaper is better. They are trading down to store brands from fancy labels, to small cars from SUVs, and to deep-discounters from full-service stores.

“Wal-Mart Stores Inc., which last year returned to its discount roots to try to reverse weakening sales, Thursday reported its best monthly sales gain in four years; it benefited from bargain-hunters seeking deals on the most basic stuff. Discount stores overall saw sales jump nearly 6% last month, while those of full-price department stores declined…

“Trading down is a common consumer reaction to economic ills. But this time around, the change has come unusually fast and may be touching on the broadest array of goods since the recession of the early 1980s. The combination of historically high fuel prices and soaring food costs, combined with falling housing and stock values and tightening credit, are severely damping the spending habits on which the U.S. economy has long thrived.

“There has been a major shift in thinking by shoppers,” says Thom Blischok, head of consulting at Information Resources Inc., which tracks spending on consumer goods. “Consumers are moving away from availability, to affordability.” Dunnhumby Ltd., a consulting firm that tracks shopping habits for many retailers and manufacturers, says 20% of loyalty-card holders of its U.S. and European retail clients are “radically” reducing spending, according to its analysis of their purchasing data.

“At almost every income bracket, Americans are changing buying habits and deciding they can live without old favorites. Bob Swanson, a 48-year-old Houston software salesman, drove BMWs for most of the past two decades. But as the price of premium gasoline jumped, he traded his 8-cylinder BMW 540 for a more frugal 4-cylinder Honda Accord that he bought secondhand. “I went from an average of 14 miles a gallon to an average of 24,” Mr. Swanson says.

6. Clock Sponsorship of elitetraveler.com

Elitetraveler.com has quickly established itself by bringing the private jet lifestyle. A unique feature of every page of the site is a clock in the upper right hand corner that is automatically set to the local time zone where you are accessing the web.

For watchmakers, our clock presents a unique branding opportunity to ensure your brand is top-of-mind with a readership that spends $147,000 per year buying watches.

Basic sponsorship starts at $12,500 per month based on a one-year commitment, and many additional opportunities are available in our upcoming online Elite Traveler Recommends Best Watches online guide, as well as throughout our portfolio of private jet lifestyle media products.

7. Send Us Your Editorial!!!

With the launch of elitetraveler.com, bringing the private jet lifestyle online, we want even more from you – more news and updates from your company. A key feature of elitetraveler.com is our Daily News section featuring the latest and greatest of items and experiences that our readers will want to make part of their private jet lifestyle.

You can see our current selection by clicking on www.elitetraveler.com. News submissions for elitetraveler.com can be sent directly to me at douggollan@aol.com. So weather it is the opening of a new luxury hotel, a new high-end handbag, a must have complicated watch, a new way to furnish a private jet, a special edition of anything elite, we would like to know about it.

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