Private Jet Charter: Flying private at a good price
Published this week during the Le Bourget Paris Air Show: an article on LunaJets, which came out in Altitudes Europe Magazine the leading reference for private aviation. (Read the PDF Article: LunaJets-Altitudes or below)
With a simple idea, a simple offer, and a bit of luck, LunaJets the Geneva based company has become in just a few years, a leading independent private jet broker in Switzerland, and a major player in Europe. Despite challenging market conditions, the company managed an impressive 40 percent growth last year.
Spending a few hours at the LunaJets headquarters near Geneva airport can be an experience. All is apparently calm and quiet until suddenly the serene atmosphere becomes hectic, as on the Wall Street trading floor. “Please do not pay attention to this red flashing light, it’s an urgent last minute flight request alert,” explains a smiling Eymeric Segard, 45, the laid back LunaJets CEO. In a matter of minutes, François Bogillot, the LunaJets Sales Director, enters the meeting room to report the news, confirming a last minute flight from London to Malaga on a Hawker 900XP. Segard looks at the information sheet for a few seconds, “this is a new client, who requested the flight only 20 minutes ago and should take-off from Farnborough in about 90 minutes. He is paying 40 percent less than a 25-hour card program, for the same type of aircraft. Dealing with this type of request is a great competitive advantage” comments Segard.
LunaJets was founded in late 2007. The initial business plan was to resell available private jets seats, or excess capacity flights known in the industry as “empty legs”, at hugely discounted rates. This was before the economy went down and the original concept did not work as planned. Aircraft operators were too busy, and clients were not willing to change their habits. One of the three early investors in the company decided to give-up quickly. “I could not have picked a worst time to launch a new private jets venture”, recalls Segard, “but in some way the crisis brought me luck!” Flush with overcapacity and struggling with free fall demand, the aviation and particularly the business jet industry, was badly impacted by the financial crisis. Segard, ever the entrepreneur, seized the opportunity with a new and aggressive approach: “Fly private at the best price”. Switching from a purely “empty seat and empty leg" product to a top-service low-commission “on-demand charter” model. Within weeks, with only 2 employees and a website, working from a small temporary office, clients started to call, looking for bargains. In April 2008 LunaJets sold its first flight. “You never forget your first client!” recalls the CEO. Five years on, his company is the largest independent private jet broker in Switzerland, the fastest growing in Europe - on track to operate 1,400 flights in 2013, and a 40 percent growth rate, with a team of 15 by year-end. This summer the company will move, for the third time in 5 years, to a brand new 200m2 office space, still within walking distance of the Geneva private jet terminal. “Empty legs” are still the cheapest way to fly private with LunaJets, but it makes today no more than 15 percent of the volume, whilst the more flexible “on-demand charter” represents the other 85 percent.
“PRICE SENSITIVE” CUSTOMERS
Friends since childhood, Eymeric Segard and Laurent Détroyat, 43, LunaJets Chief Commercial Officer and a private pilot who joined the company in 2011, share the same passion for aviation. They both started their business careers far from Geneva and the aviation industry. Segard was born in a French-Colombian family, and speaks 5 languages fluently. He resigned from a top management position at advertising giant Ogilvy & Mather in Mexico to start up LunaJets. Similarly Détroyat brought his 15 years worldwide marketing experience from the perfume industry with positions in Switzerland, Asia, South Africa and the US. If neither of them at the time, had any experience in the private jet industry, today, both managers strongly believe in the single broker model. Whether customers fly 5 or 150 hours per year, they target the so-called “price sensitive” business jet users. “LunaJets has a very simple vision", emphasizes Segard. “We want our clients to save money and time. Our offers guarantee the best price, flexibility and service.” More than 40 percent of LunaJets new clients come from former 25-hour card or fractional ownership programs. Ségard and Détroyat also point out that if prices and costs have long been a non-core priority in business aviation industry, today the market has changed to a more rational and pragmatic approach. They are determined to stay ahead of the competition and take advantage of the trend. LunaJets offers some of the lower costs on the market. For a single oneway charter, LunaJets targets to be at least 20 percent more economical than any ownership program on comparable aircraft, and up to 50 percent cheaper for same-day return business trip, and week-end escapes. “It means our clients can fly 5 to 10 hours more for the same cost compared to the 25-hour cards,” notes Laurent Détroyat. VLJ The concept was also boosted by the recent emergence of “Very Light” jets. Whilst fragmenting even more the market, this new niche is a big opportunity for independent brokers like LunaJets to offer better prices to passengers. “LunaBusiness”, LunaJets same-day return offer, starts at 2,000 euro per hour, on Citation Mustang or Embraer Phenom 100 aircraft, for up to four passengers. On Large cabins and Long Haul flights, LunaJets claims to get even better deals! For clients willing to wait until the last minute to book such flights, LunaJets may find an empty leg… In this case, prices can be discounted by up to 60 percent, which means up to a US$50,000 saving for a transatlantic flight, compared to market prices.
To achieve such ambitious price targets, LunaJets benefits from ‘a volume advantage’. The company generates thousands of flight hours per year, which gives them real power of negotiation when dealing with their selected network of jet operators. This huge volume, guarantees an access to discounted customer would not obtain. Cost control is also clearly part of LunaJets’ DNA. No contemporary art on the walls, or wool carpet in the offices -they operate worldwide, 24/7, from a single location in Geneva that regroups operations, marketing, client relations, and flight management. “We believe in a network of technologies, not a network of offices” jokes Détroyat. Since 2007 LunaJets invested heavily in technology. Not only on the LunaJets.com website, but also on social networks, Youtube, mobile Apps and client management CRM systems.