Travel decision-makers are often times faced with figuring out the best way to take care of their most elite travelers. It’s a balancing act between financial responsibility, VIP traveler happiness and their demanding schedules. Often times that can require travel managers figuring out challenges that others may not face, including determining if a private jet is worth the investment, will a first-class seat suffice or how to ensure they reach their destination for a critical meeting.
Additionally, external pressure continues to mount and force travel buyers to become more innovative in their approach as investors seek to see increasing stock prices, the need for more sustainable travel impacts the company’s reputation and more.
So how does an organization balance flexibility, cost and experience to meet C-suite high expectations and needs? There are a few options.
Are corporate jets a worthwhile investment?
One way corporations are meeting the needs of executive travelers is through a corporate jet. However, maintaining a corporate jet takes a lot of investment. You pay not only for the asset itself but also for its continued maintenance, storage and crew costs. According to a recent report from Bank Rate, a new jet can cost anywhere between $3 and $90 million up front, depending on the size and features of the craft, and between $700,000 and $4 million per year to maintain.
To curb increasing travel expenses, many major organizations have sold their private planes to appease investors. As more planes enter the secondhand market, companies may be able to procure high-end pre-owned aircraft for a fraction of the price of a new jet. Of course, a pre-owned craft may have higher maintenance costs than a new model. If investors decide that travel costs are still too high, it's unlikely that the secondhand market will be able to supply affordable assets.
Companies that utilize their private jets for fewer than 200 hours a year can likely control costs by chartering private flights. According to PrivateFly, a chartered flight can cost between $2,037 to $8,841 per hour, depending on the size and range of the craft.
Emerging alternatives to corporate planes
Companies looking to control their travel costs without sacrificing comfort for executive travelers have many more options than they might think. In addition to first-class seats on commercial flights, companies can leverage jet cards, fractional ownership schemes and unique membership programs.
Jet cards are an easy way to charter flights for executive leaders. Your company simply purchases a card that guarantees specific aircraft models and flight times. According to the Sherpa Report, jet cards are typically built around increments of 25 hours of flight time. Costs are usually in increments of $50,000. This locks in a rate for travelers. With a jet card, the travel arranger typically needs to give 12 hours notice before a trip. Jet cards can greatly reduce the legwork involved with chartering a flight.
Another emerging trend in the private jet space is the rise of pay-by-the-seat plans. For as little as $125 a seat, flyers can travel in comfort and style to less-congested airports around the world. According to aviation industry expert and Forbes contributor Doug Gollan, many by-the-seat plans offer expedited service at the airport. Flyers need only show up to the airport 15 to 20 minutes before takeoff.
Organizations that partner with a travel management company can gain access to additional flight options, such as United Airlines’ private charter services. This type of option offers exclusive accommodations while taking advantage of the airline’s global scale and large fleet size.
To learn more about how to control air travel costs at your organization, connect with an expert at Direct Travel today.