23 February 2016 | 2016

Sharing Economy expands to private aviation industry

LunaJets makes sharing economy expend to private aviation

Air transportation solutions in Geneva are increasing to reduce empty legs, which are part of the private jet industry

 

The upcoming arrival of Stellar Labs, a California based company claiming to be the Airbnb of private aviation, in the Geneva area, is showing once again the growing commerical interest for private flights without passengers.  Furthermore it enhances the increasing diffusion of a sharing economy in all social categories including the most prestigious ones. For a few years now, more and more people have been seduced by the potential of empty legs inherent to the private aviation sector. The volume is estimated between one or two flights out of three, depending on the statistics available. In a press release, Stellar Labs already announced their will to « revolutionize the Swiss market «  and also spoke about millions of euros more on the market. These are optimistic estimates, especially when we look at the comptetition, which emerged in the last years. There has been desillusion experienced by some of the market players.

 

Not a promising future

As one of the pioneers, the Geneva based company LunaJets quickly realized that the empty legs were not as promising as expected. After its launch in 2008, its founder and CEO Eymeric Segard perceived all the inconvenients of building the business model around this trend. « Those flights have no good geographical locations, are not flexible enough to satisfy clients. Even if they are looking for good deals, they are still as demanding as the classical private aviation clientele » says the founder. Paradoxically, he also says that he would need even more empty legs for the internet reselling model to work.

 

Sharing economy

Even if LunaJets is still trying to book empty flights, the company and its 19 employees turned most of the attention to the more classic business model of on demand charter flights while still being price oriented. «  Luxury at the better price or at lower cost » according to Eymeric Segard, who mentions prices ranges between $4,000 and $100,000 (similar price in Swiss Francs).

The last major economic crisis which started in 2008 allowed the «low cost model» and sharing economy to penetrate business aviation.  «The bad conditions and the search for alternative solutions for private jet owners to better breakeven have probably been beneficial for us and helped us reach 2,000 flights and 30 millions Swiss Francs of turnover in 2015» explains LunaJets CEO. This niche of low cost private flights is also the origin of a new airline like the Wijet, based in France. At the moment of its launch in 2009, Corentin Denoeud, president and cofounder of the company, assure to Les Echos that their business model would make « private jets as accessible as taxis ». As a partner of Air France since 2014, Wijet completed the picture two years ago by launching their subsidiary dedicated to emply legs : Cojetage.

Another growing tendancy in recent years has been Jet Sharing or Time Sharing for private jets. The principle is simple - it is about buying an aircraft among several people and sharing the utilisation. Netjets, an American company bought by Warren Buffet at the end of last century, specialises in fractional ownership of private jets – acquiring 10% of an aircraft gives you access to 13 days of use per year.

 

Olivier Wurlod - La Tribune de Genève - 02/22/16

Original interview (in french) here or here.