Shareajet - The Private Jet Experience goes Public

August 27, 2009
Analysis by: GLG Expert Contributor
Analysis of: Blue Star Jets Revolutionizes Private Aviation Industry,
With Introduction of the ShareAJet Exchange
Published at: www.reuters.com

Summary

An online marketplace for private jet seats has been developed in response to client requests with the aim of reducing costs for executive travelers. Whilst this might lift private jet hirings, and seems relatively straight forward to carry out there are several practical problems with senior executives and opinion formers sharing their small cabin.

Analysis

Blue Star Jet's idea of creating an online marketplace ("Shareajet") for private jet travelers certainly creates the possibility of reducing costs for their members in these straightened economic times. It may also persuade new clients to enter the marketplace who otherwise might not have traveled at all or gone via a scheduled airline. Private jets have the advantage of leaving from local uncongested airfields and traveling to out of the way places difficult to access by public transport; the ambience of private jets is also more conducive to work preparation, confidential discussions and briefings and private calls. The biggest downfalls are primarily cost but also image and lack of access to congested airports.

However there are some potential pitfalls to this new marketplace

Firstly, sharing a jet might make the work preparation more difficult if confidential issues are involved. Presumably the online process would prevent two competitors from sharing the same aircraft prior to pitching at the same client but what would happen with business leaders who didn't get on?

Secondly, it is quite likely that compromises in travel arrangements will need to be made as travelers will be coming from and going to different places at each end of their routing. This will most probably involve someone having to go further or wait longer than they otherwise would have to do. Having to wait for your co-travelers to arrive to catch the jet when you are ready - then being late for your appointment - would be irritating and negate the purpose of having an executive jet to start with.

Thirdly, sharing a jet might be cannibalizing Blue Star Jet's business by having less hirings than they would have had without the online marketplace. Some travelers might even decide that sharing a plane was perfectly OK - so why not go on scheduled airline in the future?

So, it is admirable for Blue Star to respond to customer feedback in this way and it is likely that start up costs are limited to the technology platform - and presumably an exit route would be low risk as well. However there is something contradictory about having a public marketplace for private jets and it is possible that the aura of private jets might become damaged as a result..