The New Jet Set

Business

For corporate jet customers, the skies are getting friendlier

A PLEASANT COMMUTE from the airport terminal to the tarmac. A decent meal. Courteous service. No bumping to another flight. No changing planes at O’Hare. On-time arrival. And a reprieve from the post-9/11 “security dance.”

What once were considered commonplace perks in “the friendly skies” of commercial aviation are still available for customers of corporate jet aviation, an increasingly popular option for business——and leisure——travelers coming into or leaving San Diego County. On the horizon: A new generation of VLJs, or “very light jet” aircraft pioneered by San Diego’s Spectrum Aeronautical and other manufacturers, may open charters and jet ownership to a new class of passengers and pilots by the end of the decade.

In the meantime, charter operators such as Jet Source, which operates out of McClellan-Palomar Airport in Carlsbad, cite a business increase of more than 200 percent in the past four years as the rationale for upgrading and expanding facilities in Carlsbad and elsewhere, while county-operated airports scramble to accommodate the traffic.

“More and more of us don’t want to fly commercial,” says Frank Milian, president of Jet Source. “Services like ours are very convenient, because you’re on your own schedule. If you want to leave at 10 a.m., you leave at 10 a.m. Or say you go to a meeting, but you don’t know when it will end——the plane waits for you and brings you back. You avoid the congestion at the airports and the uncertainty of flights being overbooked.”

Flying commercial, Milian says he recently was bumped. “Just the other day, I was going to Washington, D.C., and when I got to the gate, I was told the airline sent the wrong plane with fewer seats. So we were told, ‘Some people aren’t going to Washington today.’”

To be sure, chartering a jet is a pricey proposition. A top-of-the-line Gulfstream, with a seating capacity of 14 and the range to travel six hours to the East Coast, can cost as much as $70,000 to charter round trip. Shorter hops to Vegas or destinations in California make private jet travel an increasingly popular option, Milian says. A jet that seats eight for a one-hour trip to Las Vegas, for example, can be had for $6,000, he says.

To accommodate the increased interest in jet charters, Jet Source is in the midst of a $7 million upgrade at McClellan-Palomar Airport that includes a solar-powered, 40,000-square-foot hangar and fuel facility, expected to be fully operational in 2008.

Meanwhile, San Diego County is investing in McClellan-Palomar and El Cajon’s Gillespie Field, two of the county’s eight airports equipped for jet traffic. Currently, 39 jets are based at Palomar, 15 at Gillespie, but Peter Drinkwater, the county’s director of airports, says he expects these numbers to increase.

“Corporate aircraft and private jet travel is gaining in popularity as people are able to afford the use of these airplanes and are dissatisfied with commercial air service,” Drinkwater says. “Tax laws and corporate financing for business operations favor private corporate air travel for companies that in the past would not have qualified.”

The public-private McClellan-Palomar upgrades started several years ago, and when completed by the end of the decade, they are expected to total about $150 million. Improvements include new hangars, maintenance facilities, aircraft-parking aprons, upgraded navigational systems, improved safety areas, taxiways, a new terminal, parking lot and restaurants.

At Gillespie Field, the county is in the midst of an environmental review expected to precede development of the 70-acre former El Cajon Speedway for aviation. “Gillespie Field has three active runways and is a growing area for corporate-aviation operation,” Drinkwater says. “This is evidenced by new corporate operators, such as Jet Air and their clients.”

AT SAN DIEGO’S Lindbergh Field, the situation is a bit more complicated. The private-jet-charter operator serving Lindbergh, Jimsair, is in the final five years of a 50-year lease. According to Carrie Telitz, Jimsair’s operations manager, jet charters are increasingly popular——with a 20 percent increase in business over the past year. Telitz says Jimsair would like to expand its Lindbergh operations by as much as 30 percent, with a new terminal and three hangars. But that expansion is threatened by a contentious relationship with the San Diego County Regional Airport Authority, which was created in 2003 to operate Lindbergh Field and, as its Web site says, “plan for the region’s future air-transportation needs.”

Telitz says Jimsair can’t expand without knowing whether its lease will be renewed. The hangup, she says, is “politics. That’s the simplest way I can put it. The airport’s master plan has not been completed, and without the master plan, it’s silly to spend millions of dollars and then have to walk away from it.”

In fact, Jimsair filed a complaint about the lease extension with the Federal Aviation Administration. In April, the FAA rejected Jimsair’s complaint against the Airport Authority.

Whatever the outcome of Jimsair’s lease negotiations with the airport authority, a new generation of VLJs is expected to increase the desirability not only of jet charters but jet ownership in the region.

One developer of VLJs is San Diego’s Spectrum Aeronautical, headed by Linden Blue and his son, Austin. The Blues say their jets, using composite fiber instead of aluminum, and epoxy instead of thousands of screws and bolts, will be lighter and more fuel-efficient than planes with aluminum bodies. As an example, Spectrum’s 10-seat Independence is comparable in cabin size, range and payload to a Cessna CJ2+. The Cessna weighs about 12,500 pounds; the VLJ Independence is around 7,500 pounds. The Cessna runs about $5.7 million; the Blues estimate the Independence will cost about $3.65 million.

These kinds of savings have encouraged Jet Source to team up with Spectrum on a fractional-ownership program for VLJs. “Because of their lower operating costs, very light jets have the potential to revolutionize corporate aviation,” says Milian.

Drinkwater agrees. “The lower-cost very light jet opens up lots of air-travel opportunities for small businesses,” he says. “Fractional jet ownership allows companies to write off their aircraft ownership and operating expenses while sharing the overall cost of the aircraft with other owners.”

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Charter or Buy?

IF YOUR BUSINESS spends a lot of time and money on charters, Jet Source’s Frank Milian says a checklist of factors can help decide whether ownership of a corporate jet makes sense.

“What are your travel requirements?” he asks. “Are you always going out with the same number of people to the same destinations? If so, identify the right aircraft for that mission. If not, you might want to try out different aircraft on different trips to see which one works best. The deciding factor is largely dependent on the frequency of use.”

Expect to pay about $3 to $5 million for a six-seat jet with a range of about 1,000 miles on the low end of the spectrum, up to $50 million for a Gulfstream 5 with a range of 6,000 miles and seating 14 to 16 passengers, depending on how the aircraft is configured.

In between, the Gulfstream 4 runs about $30 million, while the Gulfstream 5 is about $40 million. “From Southern California, in the 4 you can go virtually anywhere in the world with one stop, or in the 5, nonstop. The ability to go anywhere nonstop is about a $10 million decision,” Milian says.
——RICH ACELLO

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