Do you remember the last time you took a taxi? If you’re younger than 30, that answer may well be “never.” That’s the impact that ride-sharing services have had in major cities and smaller towns throughout the country.
While there are many advantages to this method of travel, efficiency is the major reason society has embraced this technology-driven way to get across town. A tap of a smartphone app gives you a range of information in order to make an informed decision: price, ride availability, time, and distance. You benefit from not having to use your own car for a one-off trip, and the operator can maximize the value of a vehicle that might otherwise be sitting idle in a garage.
But on the ground, you don’t know exactly what you’re signing up for when you hit that “request ride” button.
When it comes to shared aircraft, you do. All commercial pilots, whether flying for charter or fractional operators, must pass regular physical and flight competency tests, unlike their counterparts on the ground. This assurance is translating into greater demand for similar services, specifically fractional or shared ownership. And it’s the younger generation who is leading the charge.
Efficiency Drives Decisions
Younger business leaders are discovering that depending on commercial airlines can be an impediment to conducting business deals efficiently. With the number of routes decreasing, and fees and surcharges on the rise, commercial travel today means more time wasted for layovers in connecting cities. The extra inconvenience of tightening security means that more of your time is spent in preparation to see a client or business associate, or to visit a remote office, than is spent face-to-face to discuss business.
If you’re already used to mobile banking, or same-day delivery from an online retailer, how does the old airline-based travel paradigm make sense? Business travel providers have figured out more efficient ways to serve you, and increasingly, the market is accepting them.
Access Is More Important Than Ownership
According to recent research by the international market research firm YouGov, “26% of those with $20 million or more in assets are in the market to access private jets” – a 30% increase from just a decade ago. Of that group, more are open to travel options that include less than whole jet ownership. Desire for fractional ownership, jet cards, and subscription or on-demand services all have risen.
While many people with $10 million or more are willing to share assets, a growing number – 48%, according to YouGov – are increasingly prioritizing having access to services they need, as opposed to actually owning them. That efficiency-on-demand model is borne out in other services, such as vacation rental providers like Airbnb. All of these cut to the core of getting a product’s greatest value with minimal investment.
How to Capitalize on the Economics of Sharing
Who benefits the most from the new “sharing economy”? You, the consumer.
You can lower your travel costs by seeking the providers who maximize their fleet capacity. Sharing forces them to address the age-old problem of flying empty legs to get to one customer. That means more efficient aircraft utilization, and lowering membership, charter, and fractional costs.
All of this may add up to a better return on your travel investment than traditional flight departments.
Just as on the ground, service will be judged and rewarded. You may be used to rating your ride-sharing drivers, and reading reviews of restaurants instantly. So sharing should increase customer service standards (see “KPIs on the Prize”).
You have the ultimate power to give your business to those who earn it. Dependable, repeated positive experiences offer you the greatest value – even more than the promise of lower costs. BAA
John Owen is President and CEO of Executive AirShare, one of the nation’s largest fractional providers. He has nearly 20 years’ experience in management and financial consulting, previously working at State Street, Accenture, and KPMG.