Business jet sales booming
SAN JOSE, Calif. – While the nation’s major air carriers are cutting flights, grounding planes and laying off workers to combat soaring fuel prices, one area of flying appears to be largely immune: business jets.
In fact, despite the fuel cost surge, sales of these planes are booming. One study shows the number of business jets expected to be built in the next 10 years will double from the previous decade.
Anecdotal evidence suggests that companies continue to lease or charter these jets for more efficient travel. Time is money, and businesses are more than willing to pay sizable sums to avoid the headache of commercial travel that critics contend is growing even worse with its long lines, lost luggage and flight delays.
Just ask 82-year-old Reid Dennis, a longtime Silicon Valley venture capitalist who is chief executive of CTP Aviation, a jet-charter operation at Hayward Executive Airport in Hayward, Calif. In May, Dennis – who already was charging more than $2,000 an hour to flit business people here and there – told his customers he’d have to raise his rates to cover fuel expenses.
Even so, “they’re continuing to fly and our planes are busy,” Dennis said, adding that a big reason cited by his clients is “the airlines are just so unpleasant.”
Some Silicon Valley companies whose executives use business jets – including Hewlett-Packard, Apple, Google and Oracle – declined to discuss the subject in detail. But Intel spokesman Chuck Malloy acknowledged that a big reason the Santa Clara, Calif., computer-chip maker uses them is because it makes more sense than relying on the airlines.
Operating from Mineta San Jose International Airport’s Jet Center, which serves business jets in an area separate from the main terminals, Intel’s leased jets fly 30 times a day, shuttling its employees between California and its offices in Oregon, Arizona and Washington.
Although the company’s jet-fuel costs are up about 50 percent from a year ago, Malloy said Intel considers the jets worth the increased price. Besides driving to and from major airports, “if you factor in load, off-load, security, standing in lines, delayed flights, etc., etc., you add a significant amount of time,” Malloy said.
He declined to discuss how much Intel spends on the jets but noted that “last year we saved about 200,000 hours of productive time” by using the planes.
The Jet Center also offers a number of amenities business people appreciate, from limousines and gourmet catering to lounges and “snooze rooms” for pilots.
“Boy, they’ve got showers and conference rooms. … You could live over there for a week,” said Mineta San Jose International spokesman Rich Dressler.
Forecast International, a Connecticut consulting firm that tracks the airline industry, estimated that 14,978 business jets would be built from 2007 to 2016, more than twice the number produced from 1997 to 2006.