The sun-tanned, immaculately coiffured and expensively dressed couples sipping champagne and nibbling canapes at the private viewing of a Kandinsky exhibition at Paris's Pompidou Centre in April were proof that - recession or not - Europe's well-heeled have not gone away. Their net worth may have dropped and they may have axed a few luxuries, but they still have millions to live their lives in style and comfort.
The 300 or so guests of business aviation start-up Jet Republic were there not just to view the abstract art of a French-Russian painter, but the very real vision of chief executive and founder Jonathan Breeze, who unveiled via a slide show presentation the company's cabin interior concept. The former UK Royal Air Force pilot and NetJets Dassault Falcon 900 captain is determined to take on his former employer and the industry leader with a fractional ownership and charter proposition based on "European" customer service and the appeal of Bombardier's $14 million Learjet 60XR. The company is at EBACE this week (stand 150) to further win over converts.
© Jet Republic
Backed by Vienna's private Euram Bank, Lisbon-based Jet Republic plans to run an all-Learjet 60XR fleet and placed orders and options for 110 of the types last year in what it claimed was the biggest single business aircraft order placed by a European company. The first jet will be delivered in October, with subsequent deliveries every month, and the company is making a big play of what it calls its "bespoke" interior design and "large cabin service at midsize cabin prices".
Jet Republic's strikingly black-liveried aircraft will be outfitted at the Learjet plant in Wichita with an "extra large" galley able to supply hot meals (from a fixed menu) and lie-flat seats. They will also come with BlackBerry and iPod connectivity as well as a cabin attendant. The logic is that, instead of the "cold food, no flight attendant, no wi-fi" service provided by its competitors, Jet Republic's service will offer "enough of a difference to bring in new customers and persuade current customers to switch from their current provider", says Breeze. "That's why the interior programme is so important. Not only are we getting completely new aircraft, but we have the opportunity to completely redesign the cabin offering."
A customised interior on such a small aircraft is rare and "every element was questioned", says Breeze. Normally smaller business jets come with off-the-shelf cabin designs and tend to be "built in America for Americans", says Breeze, adding: "When you order this number of aircraft you have the power to make the manufacturer do what you want to do." The company has recruited as its director of cabin design Jose Luiz Monteiro, a former designer for Jet Aviation and director of cabin appearance for NetJets Europe. Monteiro says European business travellers often have different tastes to their North American counterparts, which can come down to style of lighting, choice of food, colour of fittings and even coffee. Americans prefer it white and in large beakers, Europeans like it short and black or, occasionally, milky and frothy. Every Jet Republic 60XR will come with a Nestle Nespresso machine.
© Jet Republic
Breeze will not disclose how many shares Jet Republic has sold - only to say "we are where we expected to be". However, he says the package is competitive with NetJets. Fractional owners will be offered ownership packages ranging from one sixteenth for $875,000 - equating to 50h - to half an aircraft, or 400h. The average customer will acquire an eighth, or 100h, with about 70% of owners expected to lease their share rather than buy outright, says Breeze. Fees will amount to around $8,700 an hour "all in". Jet Republic will also offer a jet card programme, with packages 25h on third-party aircraft.
But at a time when business aviation has been dealt a triple blow - with lack of credit to purchase aircraft, belt-tightening by end users and bad publicity surrounding the use of private jets by corporate executive - is now the right time to press ahead with such an ambitious new venture? After all, the past eight months have seen the collapse of several high-profile charter start-ups on both side of the Atlantic, most notably Florida's DayJet.
Breeze, who two years ago led a Euram Bank-backed management buyout of concierge business WhiteConcierge, insists that a new generation of high net-worth individuals, rather than corporate clients, are Jet Republic's targets. Although they have been affected by the downturn, many of them made their money in the booms of the 1980s, 1990s and 2000s and are owners of successful family businesses. Most are recent or potential converts to the concept of private flying. "They are often working class millionaires, self-made entrepreneurs, who know the value of a euro and the value of their time. Many of them are Euram customers too. We are like them. We understand them," says Breeze.
He believes too that the traditional corporate sector will rebound too as soon as the world economy begins to improve, simply because the logic of business aviation is compelling. The sharp fall in traffic has been largely because mergers and acquisitions have ground to a halt, he says. A huge proportion of private air travel in a dynamic economy is by lawyers, management consultants and financial advisers working on mergers and acquisitions. "They get to fly in business jets not because their customers love them, but because they charge by the hour," says Breeze.
He is honest, however, about how challenging the last year has been. When the business was conceived in early 2007, the global economy was on a high and business aviation appeared to be on an unstoppable growth curve. However, by mid-2008 when Jet Republic placed its order with Bombardier "the world was melting and banks weren't lending". Although, as a private investment bank, Euram was less exposed to the domino effects of toxic sub-prime lending than its big rivals and still prepared to back the venture, Breeze admits it was a "really bad time".
He concedes too that Bombardier has taken a chance in committing so much production to a start-up venture, despite the positive effect it has had on the Canadian airframer's declining backlog. "It is a risk for them," says Breeze. "They have needed to have absolute confidence in what we plan to do."