February 6, 2019 / 6:16 PM / a month ago

Winter storms, U.S. shutdown boost demand for private jets

MONTREAL/CHICAGO (Reuters) - Harsh winter weather and the partial U.S. government shutdown boosted demand for private jets in January, according to three business aviation companies that recently reported an uptick last month in deep-pocketed travelers seeking alternatives to commercial flying.

FILE PHOTO - A Transportation Security Administration (TSA) officer checks travelers identifications at LaGuardia Airport in New York after hundreds of flights were grounded or delayed at New York-area airports as more air traffic controllers called in sick on Friday, in one of the most tangible signs yet of disruption from a 35-day partial shutdown of the U.S. government January 25, 2019. REUTERS/Mike Segar

Business jets fly through regional airports which were less exposed than major hubs to weather-related delays and unpredictable security lines during a 35-day government shutdown that ended on Jan. 25.

The Transportation Security Administration (TSA) said many employees, who went unpaid during the shutdown, did not report to work due to financial hardship. Congressional negotiators are working to avert another shutdown on Feb. 15.

“The combination of frigid temperatures and the TSA issues caused during the shutdown had a lot of people calling us in January,” said Patrick Gallagher, executive vice president, sales and marketing of NetJets, the world’s largest private jet company.

U.S.-based NetJets, owned by Warren Buffett’s Berkshire Hathaway Inc., saw customer flight hours rise more than 9 percent for most of January on an annual basis.

James Elian, president and chief operating officer of Canada’s AirSprint, said the private aviation company’s daily U.S. flights avoid potential congestion at major hubs where the need to de-ice planes, for example, contributes to delays.

Together, the three largest U.S. airlines American Airlines, Delta Air Lines and United Airlines canceled roughly 11,500 flights in January due to weather or air traffic control issues, similar to combined cancellations in January, 2018.

Private aviation accounts for a tiny fraction of total air travel because the cost of flying private, while varying widely by plane size and company, is out of reach for most passengers.

For example, a one-way flight from Los Angeles to New York would cost around $1,500 in a commercial airline’s first-class cabin, said Adam Twidell, chief executive of Private Fly, a digital booking platform for on-demand private jets. He said the same flight would cost around $3,500 to $4,000 per person on a fully-booked business jet with around 10 seats.

Passengers who can afford it will spend more to fly private if it means avoiding lengthy delays, Twidell said. Private Fly, for one, booked a private flight for corporate clients who had been stranded for 10 hours at Boston Logan airport in late January, he said.

“Clients will wait a certain amount of time to try and solve their delays through scheduled airlines, but when they can’t wait any longer, the extra cost of private aviation is something they are prepared to pay for.”

Reporting By Allison Lampert in Montreal and Tracy Rucinski in Chicago; Editing by David Gregorio

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