Air lift: Business aviation is on the rise

Long Island Business News, Jul 18, 2008

By Ambrose Clancy

It was 2 p.m. on Friday and Peter Montemurro was scrambling, taking urgent questions from his staff in the office and giving them instructions while simultaneously talking on the phone.

The crisis? A man wanted to go from Southampton to East Hampton. In a turbo jet. Immediately, if not sooner.
He had to be in East Hampton at 4 p.m. He wanted to leave, like, now. It was up to Montemurro to give the man what he wanted.

General Manager of Northeastern Aviation, an air charter service based at Republic Airport in Farmingdale, Montemurro got a plane and crew together on time.

"It's a crazy business," he said. "If he drove, he'd have been there hours ago."

A crazy business and one changing rapidly.

Montemurro has been with Northeastern for 11 years and has seen the popularity of what the trade terms "business aviation," or private charters for business trips, rise, especially within the last year. The reasons? The aviation industry is finally out from under the post-9/11 cautionary attitude, which produced many new restrictions. Also, commercial carriers are experiencing crippling delays and are responding by cutting routes and services.

Private business charters have been taking up the slack from commercial carriers' belt-tightening in the face of unprecedented fuel costs. In May, commercial carriers canceled 15 percent of their routes, according to the Official Airline Guide, saving money by axing service at slow-earning regional airports. Close to 100 communities across the United States closed many commercial services this year, and that figure could double next year, according to the National Air Transportation Association.

American Airlines, for example, plans to cut routes that do not feed a hub by up to 12 percent in the fourth quarter of this year, according to Air International News.

In less than 10 years the purchase of light jets, used primarily for private and business flights, has grown fivefold, according to Bob Mann, president of Port Washington's RW Mann & Co., an aviation consultant. And the jets are not sitting in hangars, Mann said.

"Ten years ago the typical business aircraft flew about 300 hours a year and now they're in the air more than 1,000 hours a year," Mann added.

The Federal Aviation Administration sees the trend going nowhere but up. In its business aviation forecast for the rest of the year the FAA predicts "a strong growth in business aviation demand continuing."

The FAA projects a minimum of a 3 percent increase in business aviation hours flown annually over the next few years.
With more businesses turning to private aircraft, the business of charter brokering has increased. The charter broker has no hardware, but is a one-stop shopping option for people on the move, said Ricky Sitomer, president of Blue Star Jets, one of the most active brokers in the country.

Dix Hills born and raised with a house in Water Mill, Sitomer does "on demand" charters but also opens accounts for steady clients that work like debit cards. Accounts start at $50,000 and run to $1 million.

There's no denying air charters are expensive, Sitomer said. They range anywhere from $2,000 to $8,000 an hour depending on the aircraft, but breaking down the cost makes the bill a bit more palatable.

"One guy flying to Paris costs $75,000 one way, but 10 people flying to Paris costs the same," Sitomer said. That is more than a first-class ticket, but not much more.

Charters are selling a luxury experience beyond anything a commercial carrier can achieve, with no airport hassles, and the travelers going directly from car to plane.

With more and more charter services springing up, searching for the best price, schedule and aircraft can be daunting, and has created a booming business, Montemurro said. His company, like other charter fleets, also brokers flights for clients with other charter companies.

Charter brokers also work with businesses which have their own corporate aircraft, finding paying clients who want to fly when the planes are idle.

"Brokers have become big business as people with fixed assets try to put additional hours on the airplane and realize income from what is a fixed investment," Mann said.

Blue Star Jets
885 Second Ave
New York
212.446.9037
www.BlueStarJets.com