Aviation Marketing Intelligence

The strangest thing about getting older is that at 36 you really shouldn’t feel or call yourself “old.” At that age, in most circles, you suffer sneers of derision from veterans that have seen it all, and now know it all. Not so in aviation - you can start at 20 and by 36 be an old man.

That is why when journalists call The Air Charter Directory looking for answers as to what is going on in the industry, my voice grows hoarse and crabby at the same time, though I try to breathe hope into the line, knowing that each additional writer that pokes and diggs at the surface of the strange world of private air charter, increases the chances of its evolution.

The recent news about TAG paying the big FAA fine, Sentient buying the management relationships, etc. only confirms that the industry (in its present form) is doomed to loop around like a dog after its own tail, pretending that when it finally gets that tail, they will have the panacea for private aviation, profitability and a big ass brokerage to boot.

Regrettably, what they’ll probably find is a mountain of debt, fickle jet owners who hop from one certificate to another, with the ones that stay being the ones you never really wanted to be in business with in the first place. Or to put it another way, most of the owners of heavy iron aren’t in business to make money with their aircraft, and, therefore, usually make terrible partners for such endeavors.

The naked truth about Sentient (or any large consolidation effort within our little industry in its present form) is that the guys with the big salaries just aren’t as creative and as intelligent as you’d hope they’d be. The company with a couple of King Airs or a mixed fleet of turboprops and light jets, half of which they own, are in some cases, business gods compared to the behemoth charter management shops.

While we have praised large brokerages (like Sentient) for their marketing acumen, the one big mistake being made at the helm is that is that you can’t build a successful business around the present landscape of aircraft owners - unless you’re willing to widen your definition of “success.” Consolidating air charter management companies, buying relationships from a firm that just got shut down (and agreed to pay a $10MM fine) isn’t a way to build a scalable business. It is a good way to make a giant hole though, and we have a saying here about those: When in the big hole, the first order of business is to put down the shovel.

How do we know this stuff? Actually it is nothing special to know, other than to look at the obvious - underutilized aircraft are too expensive since they don’t fly enough to break up those very very very big costs over many many hours. The aircraft don’t fly enough so they are expensive per hour. Being expensive causes them to fly less and the cycle reinforces itself.

How did the brain trust consolidating Jet Direct and Sentient miss this? Not sure, but I’d bet a small spa and corporate retreat all you can eat sushi weekend that none of the corporate governance, strategy meetings or long term planning are devoted to the difficult questions of achieving aircraft profitability, market expansion or efficiency in operations.

I used to feel like I was part of some “tin foil hat.” Much like the emperor has no clothes phenomenon, you get ignored by virtue of the fact that you are a nobody, never mind the fact that whatever you are saying couldn’t possible be true.

Fortunately, through natural organic growth, a big focus on truthiness and the inability to b.s. any of our customers, the unwashed masses of the “little guys” (you know.. the ones where the owners still flies) have begun to see that the business they operate isn’t even in the same category as the larger businesses that once seemed intimidating and are now having their certificates subject to scrutiny.

That is because if they don’t fly them enough they can’t sufficiently amortize their big fixed costs. And since they are actually in business, they want to maximize profit for themselves (or their aircraft owners) and therefore every aspect of their operation is about flying more, charging more and figuring out how to keep an aircraft in the black.

And that isn’t easy, but it is happening all across globe today, in much smaller companies than you’d imagine.

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