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Wheels Up Visits Guardian Jet

By Don Dwyer

June 26, 2018

Guardian Jet’s Don Dwyer welcomes two executives from the membership-based private aviation company, Wheels Up: Henry Schachar and Sean McGeough.

Hear why some fractional and charter customers are moving toward whole aircraft ownership, and why it might make good business sense to supplement it with a jet membership card or fractional program.

 

 

Read the edited transcript:

Hi, I’m Don Dwyer from Guardian Jet. Today we’re going to introduce a new series of videos, and it’s "Visiting Guardian Jet."

At Guardian Jet, we get a lot of great visitors, a lot of industry leaders. We get friends that are in different businesses that come here.

We thought we’d capture their thoughts on the brokerage business, on the businesses they’re in, and feed it to you, our customers, and see if you find it interesting.

Today we have we have some people in from Wheels Up, and I’m really excited about it.

We’ve found this year that there’s a lot of first-time buyers. I think when people got introduced to aviation, in my generation, they kind of got introduced via a Beechcraft Bonanza or a Cessna 421. And they moved up through bigger airplanes into jets and then into bigger jets. That was sort of a normal path.

But, in today’s environment, first-time owners are being introduced to aviation through Flexjet, NetJets, Wheels Up—all the different programs that are out there.

And they’re being introduced at a much higher level.

If you think about getting into an old 421 versus getting into a brand-new King Air 350 with Wheels Up, it’s a very different experience.

So, these buyers, when come to buy their first airplane, they’re bringing different expectations.

I’ve also thought that even though the fractional business is almost 50 years old (it’s a long time ago that Richard Santulli started doing this), I thought there would be waves of people coming out of fractional and buying their whole ownership.

But that never really felt that happened and I can’t really quantify it. Now, over the last couple of years, we’ve seen buyers come out from the fractional programs and buying their own airplane and put it in a management company, maybe charter it, maybe not.

It might have something to do with the values of the used airplanes being so low that it competes more with what they pay for a whole fraction. But, whatever reason we’re seeing first-time owners come out and they’re sort of expecting a great experience.

It’s so prevalent that every one of the big nationally branded operators—Wheels Up, Flexjet, NetJets—have programs to keep you in the program after buying a whole airplane. Or, if they don’t have them, they’re contemplating a program.

 

Welcome Wheels Up

So today we’re really honored to have Henry Schachar and Sean McGeough visit us from Wheels Up. I’ll talk to Henry first.

Henry is one of the the quieter, "big" players in the aviation industry. He was there at the beginning with Kenny Dichter at Marquis, and is a board member of Wheels Up. He’s very active behind the scenes and, while not everybody at the lower levels know Henry, believe me he’s a big deal in our business.

Henry, you started with Marquis and you now your Wheels Up. Tell me, how’s it going it Wheels Up right now?

 

Henry Schachar: It’s going great. It’s been an exciting four years. The company’s just four years old. We’ve started slowly, obviously, like anybody starts a business, and it’s really taken off. We have a little bit of a different model than most of the fractional programs because we are a membership model.

So instead of having to buy the asset, you basically just join the club for the membership dues ($17,500 to start, $8,500 a year to renew). Then you buy as many hours (or as few hours) as you want. We have different systems where you can either pay as you go, or you can buy them in blocks—sort of like a stored value card for private aviation.

 

Don Dwyer: You’re running shuttles now. I mean there’s a lot of different ways to access private aviation...

 

Henry Schachar: We wanted to be on the cusp of private aviation. And, you said before in your introduction, people have high expectations today. And the expectation levels go from not just the service, but the way that you provide the service.

We have shuttles. We have member-generated flights, so that one member can say I’m going here to there, would anybody want to join me?

At the same time, we’ve got a couple of other new highlights that we’re doing, and we continually try to modify—and basically surprise and delight our members.

We’ve gotten over 4,000 members in the last four years. We’ll probably end this year at 5,000 members. We now have 85 planes in our fleet. By the end of the year, we’ll have 100. Right now, we have 69 King Airs, we have 15 Excels, and we just started to take Citation X’s. We’re starting to move up into the bigger aircraft types.

 

Don Dwyer: So, 5,000 owners…one of the things that we’ve been thinking about is whole ownership. For some of those 5,000 may want to may want to own an airplane.

With that, I’d like to bring in Sean McGeough…

For those of you don’t know, Sean and I worked together for a long time at Hawker Beechcraft. He’s an old friend and Sean’s now the executive vice president for Wheels Up in sales. Sean you’re in the New York area, which is great for us because you’re nearby, so we get to see you. What is the difference between selling a Wheels Up membership and a whole airplane? Tell me about the buyer.

 

Sean McGeough: For a little over a month now, I’ve been carrying a bag (that’s what us sales guys love to do) and after the first 30 to 35 days, it’s really no different than a whole airplane sale.

It’s really justifying that value proposition, and making the prospective buyers see it, and value it. So whether they’re in at $17.5, as Henry said, or it’s a $120M dollar supersonic, at the end of the day whether you’re a billionaire or someone worth $5-10M, the value proposition has to be there.

 

Don Dwyer: So, the value proposition. One of the things that you and I have talked about quite a bit is what do people look like they’re going to buy a whole airplane? What are they looking for? They still want to stay your program, but if they buy a whole airplane. Tell me your thoughts. Are there people that will want to own a whole airplane? What’s the advantage to them?

 

Sean McGeough: You know, I take my experience from when I was over in Europe, working with you, and working with Brad at the Hawker days. You had guys that were buying the Marquis Jet cards. They were starting buying a quarter share. Next thing, they were buying a whole Hawker. So, I see the new opportunity at Wheels Up is really a blended solution. You have a guy that may own a Flexjet card, he may also own a Global, but he may have a Wheels Up to supplement his trip let’s say, for example, from Albany down to Teterboro. Why do it in the Global, when he can probably do it quicker in the 350?

 

Don Dwyer: The thing I just took away from that is the value proposition. It’s something that we’re looking at here for our customers. Does it make sense for them to buy a whole airplane through some of these new vehicles that are out there. Well, there’s going to be more on that in the coming months and really understanding what’s happening in the marketplace.

I thought you’d be interested in meeting some friends of ours. We’re very excited to have Sean and Henry here with us for the day.

You know where to find us at GuardianJet.com. I’m Don Dwyer, thank you very much.

Contact Guardian Jet

Media Contact


Jill Henning

jill@forwardstmarketing.com
+1 203-453-0800

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