Fast 5: Solving ‘Inefficiencies’ In Private Charter
When his engine quit in January 2018, University of Southern California business student Israel Slodowitz managed to land the Beechcraft Bonanza G33 he was piloting on the 55 Freeway in Costa Mesa, California, without causing any accidents. The harrowing experience didn’t dissuade him from a career in aviation; “to the contrary,” he says. Rather, it was a “life-affirming” event that expedited his ambition to start an aviation company.
Now 26, Slodowitz founded Craft Charter in 2020, after graduating from USC’s Marshall School of Business. A Part 135 carrier, Craft operates an owned and leased fleet of four Bombardier Challenger 300s, three Gulfstream IVs and two Gulfstream G550s, with the aim of improving “inefficiencies” in the traditional private charter market. BCA recently spoke with Slodowitz about Craft’s progress.
When did you start Craft and which airport is your main operating base?
I started it right at the height of the pandemic, in mid-March 2020, when assets were cheap, and pilots were easy to find—not at all the case today. We’re well capitalized and backed by private investors committed to our strategic growth and long-term success. The drop-off in charter demand in early 2020 created a unique opportunity for us to build our team and our infrastructure, and perfectly positioned us for the recovery of charter demand that we benefited from greatly over the past year or so. While many operators were using the decline in demand to reduce staff and cut costs, our investors and I recognized this as a rare opportunity.
Our main operating base is Las Vegas. We’re in the process of moving our trip support, sales and accounting teams to new facilities in Opa-Locka, Florida. We have about 70 employees. Our maintenance and principal base of operations will remain in Las Vegas. We intend to keep our presence there, but as we expand our ultra-long-range fleet, we have found Florida to be a more strategic location for staging longer international trips.
What are the inefficiencies in the traditional private charter model that Craft’s business model solves?
Our business model is based on a floating fleet in which we control the entirety of all of our aircraft utilization. This allows us to be more efficient than a traditional point-to-point fixed price operator. Through this model, our floating fleet achieves greater operational efficiency, higher utilization, more optimized routing, reduced empty legs and strong hourly revenues. That translates into greater availability, stronger owner returns and a lower price for our charter clients. This is accomplished by a keen focus on our operational and financial metrics.
For a small company like ours, having a full-time, dedicated analytics team is another significant point of differentiation. We place a great emphasis on understanding the intricacies of our routes, and we operate those that we focus on very efficiently.
Transparency with our owners and clients is yet another differentiating feature. While “transparency” has become an industry buzz word lately, it really is part of our corporate ethos and not just a talking point.
Another key point that I believe distinguishes us within the industry is simplicity. With many operators, booking a charter flight requires that a charter client have a degree in accounting to understand all the fees and costs that are added on to the flight cost. In contrast, our charter clients receive one simple, all-inclusive rate.
Would you describe your fleet and which destinations you primarily serve?
While other operators are adding older aircraft in their pursuit of growth, we take great pride in operating a fleet of newer state-of-the-art aircraft—Challenger 300s and Gulfstream IVs and 550s. We’ve invested a significant amount of resources in interior refurbishment, paint and upgrades including features like WiFi. Overall, we’re able to offer our customers a beautiful product at an outstanding value.
Our entire fleet is fully charter-dedicated and crewed accordingly. Our flight crew are all top-of-class. We won’t accept an aircraft that is limited to just 200- or 300 hrs. per year. That would go against our model and create additional complexity. Each aircraft in our fleet flies up to 1,500 hrs. per year. We’ve found that through an ownership model we’re able to buy these aircraft and fly them at this notably high utilization level. For comparison, our direct competitors are operating at about 300 or so hours fewer per aircraft than we can. They’re averaging between 1,000-1,200 hrs. per year while we’ve found that sweet spot at around 1,400-1,500 hrs.
We primarily serve North America, some of Canada, Mexico, and the Caribbean. With the Gulfstream 550s, our reach has expanded to Europe and Asia, as those destinations begin to open back up. We’ve been able to float those jets with a consistent occupied-hour percentage. Our core domestic fleet of Challengers and Gulfstream IVs will mostly stay in the North America region.
What attributes of the super-midsize Challenger 300 make it the standard of Craft’s fleet?
The Challenger 300 is an amazing aircraft. It’s the only modern super-mid aircraft that is truly coast-to-coast. There is no day of the year that it cannot fly with full passengers and full fuel from Boston to San Diego. When you compare it to the Citation X, which is its closest competitor, you can’t do that all the time. It’s unmatched. There’s a reason that it’s the most widely used aircraft for the fractional model.
Do you have or plan to implement a Safety Management System?
If safety is not your top priority, you shouldn’t be in this business. We’ve had an FAA-approved and FSDO-compliant SMS since day one. Additionally, we have a full-time safety officer. We run a Flight Risk Assessment (FRAT) for every flight. It’s a requirement for each and every flight we dispatch. We also utilize our own proprietary software for pilot safety tracking. The software produces a composite score based on several factors.
One of the duties of our safety officers is to analyze the FRAT score as part of our flight planning process. Sometimes the FRAT score will require only a phone call—hey, be aware of these factors; other times it will be more expansive and may involve crew swaps or other issues.
Our business model is built around having a fleet of similar makes and models, which allows us to have enough pilots on rotation and standby to easily identify and mitigate safety risks and duty time issues in advance by positioning crew members a day or two ahead of time. At a time in the industry where crew are at a premium, our turnover rate continues to be very low, likely due to our company culture and the value we place on both training and work-life balance for our flight crews.