There’s never a shortage of ideas for new opportunities in the airline industry. But an opportunity that has a chance of success? That’s a much rarer breed. Sometimes, something that seems insane starts to make more sense as market conditions evolve. That’s exactly what the private jet operator JetSuite is banking on with its new operation called JetSuiteX. Get ready for some pimped out Embraer 135s flying around. First up, Burbank (near LA) to Concord (near Oakland). While this is an interesting effort, success is going to be an uphill battle.
You might know JetSuite as a private jet operator. I took my only private jet flight on them way back in 2009. (It was only Long Beach – Orange County, sadly.) But now, JetSuite is venturing out into scheduled service. Crazy? Maybe, but the CEO Alex Wilcox does have airline background, so maybe he’s on to something.
What JetSuite realized is that the Embraer 135 is one of the most unloved airplanes on Earth. It’s a shrunken Embraer 145, and that airplane isn’t remotely in demand either. That’s a 50 seat airplane, and airlines have realized that those work better as niche airplanes than the backbone of their regional fleets. The 135? That has even worse economics. Some were operated for American by Chautauqua back in the day and those are now back with Embraer collecting dust.
With that background, Alex came up with an idea. Those airplanes are so unloved that they’re cheap to buy. Really cheap. Alex wouldn’t tell me how much they cost exactly, but he picked up 10 of them. I’ve spoken with others who said it couldn’t have cost more than $5 million to buy each airplane and that’s at the high end. On top of that, Alex put about $1 million into each airplane to turn it into a more “private jet” style experience.
They pulled the plastic wall panels out and put in leather. The overhead bins were removed as well, and seats were put in that are a few inches shorter. That gives it a very open cabin feel. Seats are still 1-2 across, but they have 36 inches of pitch so there are only 30 seats on the airplane. Wifi was also installed (using Gogo) along with power outlets.
That 30 seat capacity is no coincidence. See, these flights are being operated as public charters, and to do that, the max number of seats onboard is 30. Why do it this way? Because they’re trying to get it to feel as much like a private jet as they can. They’ll use private terminals/fixed base operators in each city. There will be security screening, but it’s a much lighter touch. They aren’t planning a fee-heavy model either with seat assignments and drinks included. Again, it’ll be more like a private-style experience.
Sounds like a fine idea, but, uh, where to send the airplanes? Service starts on April 19 (very soon) between Burbank near LA and Concord near Oakland. Concord hasn’t had commercial service since PSA flew there, so it’s been a really long time. There will also be weekend service from Concord to Vegas and even stranger, weekend operations from San Jose to Bozeman.
Part of the route selection is based on demand from existing JetSuite private jet customers. They want to be able to fly more often or be able to fly their employees on something like this. The price is going to start at $109 one way for now, and it’s not unreasonable to think of that as a normal off-peak fare, I’m told. Premium peak fares? Those might head up to the $300 range, give or take (between Burbank and Concord). There’s value in those prices for sure.
My biggest concern personally is how they’re going to fill these airplanes and make money. Yes they have a marketing budget, and they were even able to score a deal where travelers can earn TrueBlue points with JetBlue when they fly. (Helps that Alex was a JetBlue founder.) But there are still 2 flights a weekday (1 on Tuesday and Wednesday) each way between Concord and Burbank. That might not sound like a lot of seats to fill, but it’s still going to be tough. First, it’s not a lot of frequency for a business traveler that could take a very frequent flight to/from Oakland instead. But that’s only part of the issue.
All sales are direct, so nobody will see this for sale when they search Expedia or go through a travel agent. Further, even if they were available in those services, nobody is looking for a flight to Concord since they don’t know it exists. I get that the low cost of the airplane and the current price of fuel means that they can do pretty well if they sell even half the seats. But even that is going to be a challenge.
One of the benefits of the cheap cost of acquisition here is that JetSuiteX can afford to sit the airplanes on the ground outside of peak travel times. Initially they expect to get less than 5 hours a day in utilization. That does give the operation a lot of flexibility, which is helpful.
Initial routes will focus on the west coast, and they don’t see a market for flights longer than 75 minutes. But they see opportunity for flights within the northeast as well within a couple of years.
With any luck JetSuiteX has identified a relatively small niche that’ll work out. If not, it’ll just fall into the graveyard of failed efforts.
