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Home » Archives » Business

Looking skyward

Global entrepreneurs spur business jet industry

By Victor Velek
Staff Writer, The Prague Post
April 16th, 2008 issue

KURT VINION/THE PRAGUE POST
Martin Pražský, Time Air's managing director, has seen steady growth in the private aviation industry.
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The inconveniences encountered when flying on commercial airlines are many: zealous security screenings, long check-in lines and frequent delays and cancellations, as seen in British Airways’ recent bungled opening of Terminal 5 in Heathrow.
Despite these annoyances, air travel has never been more popular, with a record 12.4 million passengers passing through Prague’s Ruzyně Airport last year. This year, the airport expects to hit the 13-million mark.
As mass-market air transportation has increased, so has a tiny market following in its contrail: private charter flights, which are tailor-made for the ever-increasing pool of wealthy residents who want to give a pass to the tribulations of airport life.
Tracking the economy’s rapid growth, the number of people tapping private flights is climbing steadily, according to Time Air, a Prague-based company working in the business aircraft market.
“Since 2001, when we started the business, the demand has grown notably,” said Martin Pražský, Time Air’s managing director. “We see more customers coming who are willing to pay for more expensive flights.”
ABS Jets, a Prague-based executive jet operator, made 1,780 flights last year, up 26 percent compared with 2006, said company commercial director Jan Váňa.
Operating a fleet of seven jets, the company is one of the largest providers of business jet charters and aircraft management services in Central and Eastern Europe.
“Apart from Bratislava, where our aircraft are also based, the most frequent destination is Moscow,” Váňa said. London, Paris, Milan, Dubai and vacation places like the Alps, Mediterranean and the Caribbean are other top items on the itinerary, he added.
As more Czech firms grow and do business globally, there are more local customers willing to spend a small fortune on private aircraft.
After the early “Wild East” era in the 1990s, when the first private jets were registered by quickly rising-and-falling business giants like the oil and chemical firm Chemapol, the market now seems consolidated.
Today, apart from Time Air and ABS Jets, there are six or seven other companies competing on the private aviation market. A number of these companies are controlled by well-known local tycoons.
ABS Jets is a subsidiary of J&T Group, a Slovak-Czech investment firm co-owned by Patrik Tkáč, one of the richest Slovaks. Time Air is controlled by Jaroslav Pařík, one of the two brothers controlling the bakery giant United Bakeries. And the oil tycoon Karel Komárek owns yet another Prague-based private aircraft operator, Grossmann Jet Service.
Some companies, like ABS Jets, take care of their bosses’ jets while managing and chartering the aircraft of other clients. In the case of Time Air, on the other hand, the tycoon behind it is only a strategic investor.
While some firms own the fleet they charter, the majority of businesses make profit from managing aircrafts, offering them on the charter market and providing customized corporate flights.
“We’re sticking to our original idea of focusing on management of private aircraft,” Pražský said.  
“It is not our intention to have a large fleet at any cost,” he added, saying that the industry requires a personal and discreet approach to customers, something hard to achieve in a large business.
Fractional luxury
The cheapest jet is available for some $3 million (47.9 million Kč), with the most expensive costing as much as $60 million, which is the expected price of the G650, a high-end jet currently developed by Gulfstream, Pražský said.
A two-way ticket for five to Moscow in a comfortable private aircraft can be bought for 20,000 euros ($31,400/500,000 Kč), according to Time Air.
Such prices disqualify many businesspeople who consider their time precious, yet cannot afford to pay what could be called extravagant amounts of money. The space between these desires and prices has opened up a niche for alternative business air transport.         
“The majority of [business] aircraft operators target high-end clients. … On the contrary, we have focused on more modest customers,” said Lubomír Čorňák of NetFlight, the only domestic company offering fractional aircraft ownership, a concept that first arose in the 1980s.
Since 2006, approximately 10 businesses have joined NetFlight’s aircraft ownership program, buying a fractional interest in a single-engine Piper Meridian turboprop, Čorňák said.
For between 3.2 million and 47 million Kč, plus maintenance and operating fees, customers can fly from 25,000 to 400,000 kilometers annually for a period of five years. Then, the share can be sold for some two-thirds of the original price, according to NetFlight.
“Today, there are about 2,000 aircraft globally operated this way,” Čorňák said. “It is the fastest growing segment of the business aviation market.”

Victor Velek can be reached at vvelek@praguepost.com


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