Betting On A Good Outcome For Private Jet Charters
Private jet charter and management company Ventura Air Services is doubling its fleet during the ongoing pandemic, confident that charter travel will remain popular even as airlines return to normal service.
Since October 2020, Farmingdale, New York-based Ventura has added two Bombardier Challenger 604s and a Cessna Citation 560XL to its fleet of owned and leased business jets. It expects to add two more Citation Excels to its operating certificate in the coming weeks, bringing the fleet to 10 aircraft.
The new jets join two Learjet 35As and three Learjet 55s that Ventura uses in part to support organ transplant flights for major New York City-area hospitals. “You may be wondering why now? What a strange time to be building an aviation company,” CEO Nick Tarascio acknowledged at an announcement event last year. The investment in new staff and aircraft represents a “completely new chapter for our company,” he said.
Operating from Republic Airport (FRG) on Long Island, Ventura was at the leading edge of a COVID-19 pandemic that hit the New York City metropolitan area early and hard in the spring of 2020. Nearby Teterboro Airport (TEB) in New Jersey, the top business aviation airport in 2019 with 73,159 departures, saw flight activity plummet by half to 36,508 departures in last year, according to Argus International.
With the arrival of the pandemic, “one of two things was going to happen in my mind,” Tarascio said during a recent interview with BCA. “Either the whole industry was going to go to zero—in March , people thought it was game over. We saw JetSuite go bankrupt. We saw some other companies could not pay their payroll; they were running so tight on cash. So, we said we might as well gamble on the fact that we’re either going to win big and ride the wave if there is a turnaround or we’re going to get wiped out anyhow. It didn’t make sense to bet for a bad outcome.”
Business-related travel nosedived, but the complexion of travel also changed. People who had not previously considered charter flying saw it as a means of escape more than an excess or luxury. Helped by this trend, Tarascio estimates that Ventura returned to 80-90% of its previous booking activity within two or three months. The company further incentivized travel by allowing customers to prepay in 2020 for flights in 2021, enabling them to take advantage of a moratorium on the 7.5% federal excise tax, while also benefiting from pre-payment bonuses.
Commenting on the company’s selection of the eight-passenger Citation Excel, Tarascio said: “Midsize jets are serving the majority of flying that is going on right now. People love the Excels because they have short runway performance, they’re really economical, they have a great cabin experience.
“We thought that was a great airplane,” he added. “It’s got a long life ahead of it because it is still being manufactured. The alternatives were the Hawker or the Lear 60. The Lear name in general has been hurt by the fact that they’ve officially discontinued Learjets this year. We thought we really want to invest in an airplane that has long brand life and brand equity and good support and we just felt the Excel was the right plane for that.”
The 10-passenger Challenger 604 “is one of the more economical heavy jets,” he said. “It’s a great airplane, it’s well supported, they’re still manufacturing the Challenger 650. We felt once again, it’s a plane that’s currently made, people know it really well, it’s actually the most popular domestic heavy. We felt that especially if the airlines do turn down again, the guys who are flying the RJs are an easy slot for the Challenger 604-605, since it’s really the same airplane.”
While expanding its capacity, Ventura has adapted to the pandemic by changing its operating model to a floating fleet—one that serves point-to-point destinations instead of being home-based.
“We decided there is plenty of opportunity out there, but it is not necessarily where it used to be. We decided to do a floating fleet with the Excels and Challengers, so we can chase demand all over the country,” explained Tarascio. “In the past, everything was referenced on getting [a jet] back to New York, so it was round-trip selling,” he said. “We don’t do that anymore. You tell us where you want to start and go-to, and if our plane is in position we will cover it.”
In addition to private charters, Ventura also provides aircraft management, aircraft sales and maintenance services. The company entered the pandemic with 40 employees; it now has 58.
Then 27 years old, Tarascio took over as the CEO of a company formed by the merger of two family businesses in 2007. “In many ways, they were always small-sized companies and they had very mom-and-pop-type cultures,” he recalled. “What I’ve done is I’ve said: I’d like to take this to the next evolution of the business, which means as a real corporate enterprise, but also maintaining the values of a family business. The biggest legacy I’ve put in place is installing a very intentional culture.”
Tarascio sees similarities in the way COVID-19 and the September 11, 2001, terrorist attacks have affected the New York City metropolitan area.
“The city rebuilt itself, people got back to work. But emotionally, it took a very long time for people to get back to where things were,” he remarked. We thought the same thing was going to happen [with the pandemic]. Sure, the airlines are available, they’ve got the pilots, they’re all staffed up, they’re getting their government subsidy. But people don’t want to fly on the airlines anymore.
“I think it’s going to be a long time before people feel safe in that environment,” added Tarascio. “We figure that the charter jet industry has a long lead time of converting people who never would have done this before, to be charter users.”