Summary List PlacementLast July, Eric H. was stranded. He was in Atlanta when the pandemic lockdowns began and was too afraid of catching COVID-19 to fly back to his family in Washington state.
After months of separation, he heard about Jet It, a private air travel startup that sells partial jet ownership, while watching CNBC. Eric H., a technology startup founder, bought a 10% share in a HondaJet for $630,000, paid $1,600 per hour for the flight to his Washington home, and covered an additional $4,900 in maintenance fees. Since then, he has used Jet It to move his family to Palm Springs and fly contractors in for meetings.
Eric H. withheld his last name, saying he would be embarrassed if his friends knew he flew private, but he has no intention of going back to long security lines and flight delays even after the pandemic.
“When you realize you can pull right up to the plane and get on, that’s really nice,” he said.
Glenn Gonzales, cofounder and CEO of Jet It, admits he was concerned when the US lockdowns began and flight numbers plummeted, but the Air Force veteran kept a level head. He decided to keep acquiring jets and he didn’t lay off any staff. The bet paid off as new customers, like Eric H., bought in.
By June 2020, Jet It sold its entire inventory of fractional shares. Gonzales declined to give revenue figures but said revenue tripled over 2020 and EBITDA skyrocketed more than twelvefold. The Greensboro-based startup just launched a sister company, JetClub, in Malta.
Will customers stick with flying private even as the COVID-19 threat subsides? Gonzales thinks so. Jet It plans to invest $60 million for an order of ten more HondaJet Elite aircraft which would bring its fleet to 20.
“This is our opportunity as an industry to retain these new customers,” Gonzales, 43, told Insider. “This is the natural evolution of transportation. Those with means are always looking for more autonomy and efficiency and how they travel.”
The spring lockdowns caused air travel to nosedive at a level unseen since the September 11 attacks. In private aviation, such as corporate planes and charters, North American flights dropped 31% in March and 71% in April year-over-year, according to aviation services firm ARGUS International. A year later, it’s a completely different story. Air travel as a whole is still lower than pre-pandemic, but private aviation thrived during 2020.
“Business aviation, as it stands, is expected to be much bigger post-pandemic than it was pre-pandemic,” said Travis Kuhn, an ARGUS market intelligence executive. “Barring some dramatic reversal in what’s happening with the vaccine rollout and the way [COVID-19] is trending, we’re going to see some astounding increases and numbers that business aviation has really never seen before in terms of growth.”
Kuhn told Insider that he has observed operators competing over acquiring aircraft to keep up with demand. The charter market, in particular, is booming thanks to new customers and new operators.
From fighter jets to luxury aircraft
Gonzales, a lieutenant colonel in the Air Force, started his career flying F-15s in 2005. He served as an instructor pilot and was later deployed to Kyrgyzstan. He transitioned to the reserves in 2009 and began working at planemaker Gulfstream while pursuing his MBA at the University of South Carolina. The Houston native had his first brush with elite travel while demonstrating flights for executives and high net worth customers.
He met his future cofounder, Vishal Hiremath, who also worked in sales at Gulfstream, in 2013. After flying to India, they were stuck together for a week because the plane needed repairs.
“In all of my five years at Gulfstream, I never had an airplane break on me where I was stuck somewhere except for that trip, it was almost as if it was supposed to be,” Gonzales said.
The following year, he went to work at Honda Aircraft Company, managing sales for the Northeast region. For years, he kept hearing the same complaint from customers, that they loved HondaJets but couldn’t justify the cost of buying a plane. In 2016, he started planning to launch his own business.
“I decided that I could create a new business model versus trying to help a single individual find another individual to partner with or trying to help find an aircraft management company that can charter the airplane for them,” Gonzales said.
In late 2017, he asked Hiremath to join him and they struck out on their own in August 2018. They realized that by using HondaJets, a smaller aircraft than most fractional operators use, they could make the price point much lower. HondaJets can only hold four to six passengers and couldn’t fly cross-country without refueling, but they cost $1,110 an hour to operate and the most popular business route was from New York to Miami. Between using HondaJets and cutting out luxuries, they calculated that customers with a net worth of $2 million could afford a fractional share, a much lower threshold than the typical demographic for jet ownership.
“Having an airplane is not for millionaires,” Chris Battaglia, director of charter sales at Meridian Aviation, previously told Insider’s Katie Warren. “It’s for guys worth $50, $60, $100 million.”
Gonzales still captains flights for Jet It occasionally. Though he is hesitant to talk about his “Top Gun” days as a fighter pilot with customers, because it tends to “consume the conversation,” he said his experience in the cockpit gives Jet It an edge over other private aviation upstarts.
“There have been a lot of companies that have come and gone because they were run by people who really don’t understand aviation,” Gonzales said. “They might have great businesses, they might be great financiers, and they might be great marketers, but they don’t know enough about aviation, and they’re missing a key piece of the operation.”Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America