Sentient Jet President and CEO Andrew Collins discusses the jet-card provider’s new Transatlantic and sustainability programs with BCA Senior Editor Bill Carey.
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Rush transcript:
Bill Carey: Hello, this is Bill Carey, senior editor with Business and Commercial Aviation, and welcome to this BCA podcast. I am pleased to be joined by Mr. Andrew Collins, President and CEO of private aviation services provider Sentient Jet, which is based in Boston, Massachusetts. Andrew, thank you for joining me today.
Andrew Collins: Great to be here, Bill. Thanks for having me.
Bill Carey: You have said that Sentient Jet doubled its jet card sales in 2020, largely because of new private flyers entering the market. Has there been a sustained level of demand or even growth in sales now that the pandemic appears to be easing?
Andrew Collins: It's really good question. So, in 2020 we saw over $450 million in jet card sales and coming into '21, we saw relatively similar velocity. So, what I can say is differing right now is initially last year, what you saw typically was more new flyers coming into the mix. The addressable market was clearly expanding, interest in avoiding crowds, avoiding exposure or touchpoints, and things like that helped that kind of robust interest in jet cards and in private aviation. And now, we're seeing kind of more of a return to a mix between our newer clients, as well as our returning clients, but the appetite has not slowed down. This month, for instance, we'll see probably just north of $40 million in selling or renewing in jet cards. I can tell you that the appetite is strong. I can tell you that I think the pandemic changed the course of private aviation. I've been in the industry about 16 years or so, and this is the highest index in terms of an interest level that I've ever seen.
Bill Carey: That's good to hear. You launched the Sentient Jets Transatlantic Program in May, which offers jet card owners guaranteed availability for one-way trips between New York and London. What has been the response to that program?
Andrew Collins: It's been interesting. We tested it out early on, prior to the pandemic just to see if that was something our clients were interested in. We were also looking to start expanding internationally. I would tell you that now, based on borders opening up and the idea that you can take the same type of guarantees—guaranteed call-out periods, guaranteed access to a jet, guaranteed transparent pricing, and then a 20-year history and track record of safety and service—I think when you couple those together, our base of over 8,000 card owners has interest in this. And we've in the last few years been really looking at both the super-mid and the large-cabin classes and categories. So as borders unlock and as people reconnect, we think this is the right program and the right product for the time.
Bill Carey: Sentient Jet has introduced guaranteed international pricing. Does fixed-rate pricing run the risk of other factors such as the cost of maintenance or fees or fuel increase unexpectedly?
Andrew Collins: It can, right? In our terms and conditions, we do have an ability to adjust that pricing if we need to, but we really don't adjust pricing on a frequent basis. If you're buying a card in the 48 contiguous United States, you have a 12-month pricing lock and that's been a popular flexible feature of our program. We have infrastructure in Europe, we have an office in London, we have an office outside London, we have an operator in Italy and so on and so forth in terms of our overall corporate footprint. I think we've really looked at the market, really understood it, partnered with our European brethren and international brethren in the OneSky and Sentient family to get this right. So, I don't know that we're going to have a lot of sensitivity to that because I think as long as we can keep pricing the way that we state, we will, because we want to build into that market and we want to continue to service the client with straightforward, transparent pricing.
But I would tell you that if it did adjust in some way, shape or form, the terms for international pricing are slightly different than the U.S. and it would allow us to cover any of those externalities if we needed to.
Bill Carey: What gives you confidence to expand your jet card program at this time to other international destinations, which you have said include Moscow and Geneva?
Andrew Collins: That's a really good question. In the past, over many years, we've looked at different ways to expand internationally. We've always had what we used to refer to as entry European pricing, where we offered guaranteed pricing and guaranteed availability. And we serviced our clients with that. That's quite popular, especially during the summer peak months. But for now, as I mentioned prior, Sentient Jet is part of the OneSky family of companies, right? That includes Flexjet, FXAIR, PrivateFly, etc. Because of that, we've made as a corporation, a significant investment in the footprint that we have in international waters. Sentient has people in a command center in Europe and looking at flights and looking at flying in partnership with our other sister companies. We feel comfortable that we have that ability. We also feel like we have the relationships on the ground overseas and hence the ability to expand perhaps into territories that we didn't address through maybe more of a standardized European or intra-European rate card.
Bill Carey: Based on your business model, Sentient Jet uses a diverse, “closed fleet” of light, super mid-size and large cabin jets. You did mention this earlier that you are focused on and midsize and large cabin categories. Are you seeing equal demand across all categories or are some of these categories outpacing others?
Andrew Collins: …… I think there are two ways to answer that question. If you dollar-cost average categories based on consumer interest and an expanding addressable market, I think what you see is that the light jet market is the biggest market in terms of end users, right? So, you're always going to have a natural flow of that light or even midsize client. But for us, we've strategically placed an importance in growing our business through the growth in super mid and large cabin. So, a few years back, we refocused and reshaped our super mid offering and that's been our fastest selling product in terms of growth. Then, just at the end of last year, we re-introduced a large cabin product that really looked at more of what we felt like was today's large cabin flyer, someone choosing either to charter a large cabin aircraft or perhaps looking for a different vehicle in which to access large cabin.
We felt like because of the card donor base that we had, as well as the trends we were seeing in the marketplace, that we would make that investment. That has been one that is now coming into our product mix each month and is incrementally growing. I expect that to have an impact on our business and it takes some time to build into that. But I would imagine over the course of the next 12-to-18 months, that will be a significant driver within our business. So, [we] love serving everybody and do when we leverage the model that you mentioned. We leverage both an open fleet, as well as access to some core fleet through a parent company. Through those ways we've been able to really diversify and grow each category that we're in and serving.
Bill Carey: Okay. It seems like it gives you a lot of flexibility. Now, I'm sure you're well aware that the NTSB has recommended that Part 135 operators implement safety management systems (SMS) comparable to what is now required for Part 121 airlines. What are your thoughts about requiring SMS for Part 135 operators?
Andrew Collins: Well, I won't speak on behalf of operators. Although I feel like we are a composite sketch of operators based on probably purchasing the most hours off the Part 135 market in the industry and have been doing so for a long time. We have a certified network of operator partners that we work with and that we love, and we generally go deep with. This generally represents what we consider about the top third of operators in the marketplace. In order to be certified to work with us, you have to go through a lot of different information-sharing exercises and audits and inspections and things like that. We basically exceed Part 135 regulation in most, if not all parameters when we work with a certified operator. If it turned out that SMS systems had to switch to be more commercial oriented, a business like ours would require that because we'd want to exceed what is typically done out there.
I have to say that we have a 20-year track record of safety and have been very stringent and scrutinizing with operators. The system today works and has been working really well. If there is a movement to say, look, this should look a lot more like commercial or the Part 121 world, to me that might just state that the popularity of private aviation is moving in such a direction, especially when you start thinking about future flying trends. Then perhaps that's a shift that we do have to pay attention to. But for now, I would tell you that I don't know that I've spent every day thinking about, “Hey, we should really think about SMS systems.” I think what we do day-in and day-out with our chief safety officer or independent safety advisory board is we're making sure that operators are adhering to a certain standard that we set in order for them to work with us.
We manage accordingly and that's worked very well and we're big supporters of it and hence our consumers. So, I don't know that I've given it a ton of thought to say, that that's something they should pursue, but again, I'm not in the position to suggest that, necessarily. I'm speaking out on behalf of an operator or if it's a government movement, an organization movement, they're looking at data that perhaps I'm not looking at. I'm looking at it from more of the swath of private aviation that we address. They could be thinking about it in terms of the future trends, where aircraft are headed and where traffic management ultimately heads as well, and that it would be a plausible thing to ask for.
Bill Carey: Yes, it's all above standards and who is upholding those standards. So, that's fair. You've said that since January, every Sentient Jet flight has been both carbon and emissions neutral, an initiative that goes well beyond traditional carbon offset programs. Could you describe Sentient Jet's Sustainability Program and how it works?
Andrew Collins: First of all, I think this is one of the next things that when you talk about safety, for example, you talk about standards, right? I think there are ways to rush into offering a sustainability solution for your clients. And it's not just in our industry, it's in other industries. People do things like they say, “We'll provide you an introduction to a company doing carbon offsetting,” for instance, or they'll give you a link if you want to opt into offset your flying, you can do that. So, you're interested in a flying program that provides carbon offsetting, right? People offer that, but CO2 alone only accounts for about a third of the impact from flying. Two-thirds actually comes from non-CO2 warming, pollutants, such as water vapor, aerosols, nitrous, oxides, etc.
What we chose to do, and again, at no cost to our consumer—it's built into our jet card; we chose to be what we call a “emissions neutral,” which addresses the whole spectrum and offsets. So, an offset for those that aren't aware, is something you're purchasing in the open market, and if it's credible, it's going to be registered with a public entity. Our group works with four different bodies that make sure that not only is the credit valid, but it's been publicly recorded. And these credits fund different initiatives to help bring back the components of the climate that perhaps are affected or impacted during aviation. There's a lot of projects that then are funded through this program and they can be renewable energies, they can be in manufacturing, sustainability, and other areas. Every time one of our clients actually takes a flight, there is a portion of that flight that is applied toward the offset and that offset then goes to a registered particular set of programs and projects that then help with climate sustainability.
Bill Carey: That's interesting. And it's encouraging that there's a lot of innovation going on in the sustainability area, and that business aviation is out front and looking at different ways to reduce emissions.
Andrew Collins: I agree. I have to say that this is one of our first steps. I think that there's a lot more that we'll do. As I've mentioned in the course of this conversation, we're part of the OneSky family, which across the board is invested in sustainability. But we're also pursuing that next generation of aircraft as well. One of our sister companies [Halo Aviation] just recently filed a major electric vehicle order. The idea of where we go beyond fossil fuel-driven aviation is an interesting one and we're staying at the forefront of that.
Bill Carey: That's good to hear. Well, Andrew, I've run through the list of questions I have, I want to thank you again for participating in this BCA Podcast, and I'd also like to thank our listeners for listening today.
Andrew Collins: Thanks so much
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