The sharing economy is going upscale, with private air travel getting the Uber treatment and brokers getting a new opportunity to tap into.
This week it emerged that members of the Saudi royal family have invested US$26.1m in a company that lets users book private jets from a smartphone, in much the same way they would book a car via Uber.
The founder of JetSmarter discovered that most private aircraft aren’t actually used that much, either sitting in hangars, waiting at airports, or flying empty to pick up passengers at another destination. So what JetSmarter, which counts rapper Jay-Z among its investors, did is create a marketplace for that unused capacity in seats and flights. The target market is business class travellers eager to scale up their experience for the cost of a first class ticket.
After launching in North America, the company is now looking at expanding into Europe and the Middle East, having carried about 35,000 passengers in 2015 following a year-on-year member increase of 135%.
The private and small aircraft sector is certainly a growth market, especially with the aviation insurance world being particularly soft right now. It’s possible to purchase an insurance policy for a small Cessna for less than your auto insurance, according to one Canadian underwriter.
Louise Blanchard, aviation manager at Cambrian Insurance, said aviation is a particularly attractive market because the private aircraft sector is always growing. “There’s always that businessman who travels a lot and finds it makes sense to get his own aircraft,” she told Insurance Business.
Blanchard came to run the aviation business at Cambrian after the realization that there often isn’t time to walk a new broker through the steps of putting together an aviation policy.
“We guide the new broker that doesn’t know anything about aviation. Someone who may have a large contractor, for instance, and the contractor bought a small aircraft so he can fly to his job sites. But the broker won’t want to refer the client to an aviation broker who might then go after the rest of the account. It’s very competitive out there,” Blanchard said.