The Broad View
The Broad View
A truly unique air travel concept - the private jet for the rest of us
A client recently commented, “When I reach $$$$ I want to fly private.” Having had the experience of flying on private jets during a long and successful corporate career, he was stating something that we have all felt: When you’ve experienced the best, it’s hard to go back. However, the option to fly privately as an individual is enormously expensive, that is, unless SetJet succeeds in changing the paradigm of private air travel.
SetJet, headquartered in Scottsdale, hopes to revolutionize private aviation so that the average individual can get a seat on a private jet for business or pleasure travel for a price in the range of a first-class ticket. Williams Palmer recently sat down with Tom Smith, CEO and co-founder of SetJet, to find out more about their plans.
Tom is the successful former Chairman and co-founder of TASER International, the Scottsdale-based international leader in non-lethal personal defense devices. Tom, along with a group of enterprising investors, saw an opportunity during this recession to obtain, at bargain prices, private jets that other businesses were eliminating from their corporate expenses. As you can imagine, when prices drop dramatically in any sector, someone sees an opportunity for innovation and profit.
SetJet is not an airline or owner of airplanes. Instead, the investor group owns the aircraft and SetJet manages the operations and reservations. To gain access to the private jet service, an individual would join the SetJet flight club. Club members will be security screened upon joining the Club and only Club members will be permitted to fly on the airplanes. Club members would subscribe to the service by paying a monthly fee that would allow them to book seats on a SetJet-managed plane and originate flights.
For example, if you wanted to fly from Scottsdale to San Diego, as a SetJet club member, you would simply log onto their website and check what flights might be scheduled on the day(s) you wanted to travel. If there were seats available on a scheduled flight, you could reserve them, or, if no flight was scheduled, you could originate a flight, set the itinerary that suited you, and other members could purchase available seats on the plane. Everyone would pay the same price for the flight.
As Tom described the vision: “Imagine parking your car in the free SetJet parking lot and hopping aboard a Bombardier CRJ. You’ll get onboard with nothing more than a swipe of your fingerprint. When onboard you’ll enjoy your favorite drinks and snacks because the crew knows you by name. You’ll pay about $350 per hour of the flight and you can decide when you would like to fly or join someone else’s trip.”
According to Tom, the initial cost of the subscription is planned at $100 per month. He says that, in each city where SetJet plans to operate, a target of 1,500 members would support the service. SetJet expects to conduct its first flight in the summer of 2013 and has two aircraft currently being outfitted to SetJet standards. Once the concept is proven in the sunny Southwest, SetJet plans to expand its service east to Florida and later to the more demanding climates of the Northeast and Midwest. SetJet is planning its own luxury lounges in cities targeted for the service. The Scottsdale lounge is almost complete along with free parking.
Would you pay $1200 a year for access to an airplane that flies on your schedule? For security clearance at the swipe of a fingerprint? For free parking and a luxury lounge to wait in? For no baggage check hassle? For no long security lines, removal of clothing or prohibition of liquids? For a staff that greets you by name and has arranged the flight amenities to suit your preferences? SetJet hopes so. After all, isn’t convenience the greatest luxury?
Consider when you had to “dial” your phone and you were concerned about long-distance charges. Just as you likely never envisioned carrying a cell phone and being reachable 24/7, it may seem preposterous to think that you’d ever fly on a private jet. Thankfully, entrepreneurs and innovators take a broad view and envision what “might be.” Then, when market conditions are favorable, they take the risk that there will be others who can see the benefits and opportunities that they do.
Ultimately, SetJet is a story that illustrates an important point about investing and the creation of value. By purchasing equities we are buying the opportunity to tap into the ingenuity of creative people and their ideas—like Tom Smith and his team—and profit from their vision. Whether those people extend technology (think iPad or 3D printing) or see an opportunity to develop a new model for providing aviation services when the price of corporate jets is in free fall, new value is created and the old way of doing things almost inevitably becomes obsolete.
We wish Tom and his team well.