Step into your personal First Class suite aboard a Singapore Airlines A380 and you’re in another world. You sense it when the drop-dead gorgeous flight attendant gracefully hands you a perfectly chilled flute of vintage Dom Pérignon and shows you to your three-foot-wide leather armchair. Your private mini-apartment is almost seven feet away from your nearest neighbor.
Plug your laptop into your mahogany “business center” desk or, better yet, grab the high-tech headphones and click on your high-resolution 23-inch LCD monitor to catch one of three dozen new movies, or countless television shows. When you’re ready for your six-course dinner, you can’t go wrong with the Lobster Thermidor or the Rack of Lamb, cooked to order with fresh vegetables, all served on Givenchy china. (There’s not just one celebrity chef but a half dozen on the airline’s “International Culinary Panel.” But heck, United touts a whole “Congress of Chefs.”) And wash it down with a Grand Cru Burgundy.
Care for a nightcap? Enjoy a snifter of fine XO cognac (or, on Emirates, a sip of designer water from your own personal minibar). And when you’re ready for sleep, don your PJs and a nattily dressed attendant—one of three for the 12 First Class passengers on the 471-seat plane—will make up your stand-alone bed, complete with crisp linens, full pillows, and an Egyptian cotton duvet. For once, the airline marketing hype—“enter an island of calm in a sea of tranquility”—doesn’t seem like such a stretch. Now you know what flying can really be.
Oh, and the cost? The round-trip from Los Angeles to Tokyo (12 hours out, 10 hours back) will set you back a cool $12,000, taxes included.
Well I can dream, can’t I?
“We All Hate the Airlines”
Back to reality. As we’ve seen, for the non-elite, non-corporate, and non-wealthy fliers—what snarky flight crews sometimes refer to as “selfloading freight”—the airlines’ decade from hell only made things worse. Nasty, impersonal, and crowded. Here’s the way an irate blogger put it:
We all hate the airlines. We hate the experience on the plane and in the airport. The airlines never see themselves as our advocates, friends, servers; no, they are our prison wardens and enemies.…
A bit much, but we get the picture.
Every Economy Class flier has his or her own tale of woe. After a decade of cost-cuts and capacity squeezes and driving for revenue, the back of the bus is just not a happy place. Plenty of airline execs and Wall Street investors would say it’s about time; it’s not supposed to be.
Witness the remarkable success of Ryanair and Spirit, airlines that seem to share much the same service philosophy: Give fliers the lowest possible fares, collect the most revenue you can from them in “extras” and fees, get them safely to their destinations (or at least to reasonably close exurbs), and otherwise forget about them. Spirit Airways CEO Ben Baldanza put it this way in an inadvertently released e-mail to a subordinate regarding a disgruntled couple from Orlando who sought compensation after a delayed flight caused them to miss a concert: “We owe him nothing as far as I’m concerned,” he wrote. “Let him tell the world how bad we are. He’s never flown us before anyway and will be back when we save him a penny.” (And be careful of that “reply-all” function.)
Life in the back of the flying bus pretty well bottomed out toward the end of 2008 as fuel prices peaked, the economy started to tank, and—in a sign of the times—a major airline tried to charge $2 for a bottle of water. A few years later, America’s air travelers were still not happy campers—far from it. The University of Michigan’s extensive annual customer satisfaction survey in 2011 ranked the US airline industry the lowest of all 47 industries surveyed and below every federal government department surveyed except Homeland Security and Treasury (home of the IRS). US airlines improved in 2012—to 45th out of 47 industries.
In other words, forget about the magic of flight. Forget “sit back and relax.” Just get us out of here! From shelling out a few more bucks for a few more inches of legroom to realizing the “dream” of International First to acquiring your very own personal jumbo jet, that same imperative has helped generate the cash that stabilized the entire aviation industry.
The Poor Man’s “Escape”—Buying Perks by the Pound (Or Inch)
Coach misery generated cash. Folks who couldn’t or wouldn’t pay three, five, even ten times their discount coach fare for the quantum leap in comfort to Business Class might yet spring a few bucks more for a little less stress, a few formerly-free “frills,” a marginally more tolerable coach experience. Buying a few perks was the first baby step up from the depths of standard Economy—still a long way from Business and light-years from International First Class, but at least something to smooth a few of the rough edges.
Sell legroom almost by the inch. Those exit-row seats where the FAA insists on some extra room to facilitate emergency evacuation? Rename them “choice” or “preferred” or “select” seats, and sell ’em! Imagine that gate agents used to give these gems away for a smile! Or pay $40 to cut to the front of the check-in, security, and boarding lines. That way you can be sure to grab the limited space in the overhead compartments for your overstuffed roll-on before those aggressive bastards fill them with their oversized carry-ons.
Rebundle those little shards of escape and minor perks into a new fourth class of “better-economy” travel where there’s a “free” checked bag, a few extra legroom inches, maybe even almost-assured overhead space and an assigned seat. Now, that’s living! Heck, for another $200 at some hubs, one major airline offers “personal 1-on-1 Five Star” service—the same cramped seat, but “curbside meet & greet,” lounge access, “discreet” check-in, a faster security line, an escort to the gate, and “pro-active flight monitoring.” And just a few bucks more buys you “protection” (Associated Press’s word, not the airline’s) against falling victim to that same major airline’s checked-bag and reservation-change fees if you have to reschedule your flight. This helpful offering, a marketing official explained, “will eliminate the [passenger’s] fear about what-ifs,” though “less-discriminating” risk-takers can still go unprotected.
Business Class: The Absence of Pain
Business Class on domestic flights (US airlines market it as “First Class” on planes with only two classes) is a huge step up from the brutally utilitarian, six-across, just-get-me-there coach cabin, but it’s hardly Nirvana. Marketing hype about “unmatched” luxury, elegance, and tranquility aside, Business Class is really designed to make flying a nonevent, which is what frequent business travelers really want. As online business travel editor Joe Brancatelli puts it, “You go into [domestic] First Class because it’s less horrible than coach.” Your stress level doesn’t elevate. Your heart rate remains constant. You can work, even focus, even “bill time” for clients. There’s no joy, but also no drama. And you’re not much the worse for wear when you arrive. Kind of boring, really, and that’s the goal. A product for which business travelers are willing to pay $789 instead of the $151 it would cost them in coach for the two-hour flight from Atlanta to Chicago—or $3,200 instead of $500 in coach to fly round-trip from New York to Los Angeles on a two-week advance purchase.
For the vast majority of “normal” air travelers, though, domestic Business Class seems pretty darn swell. You can cross your legs and type on your laptop. There are free drinks (in glasses, no less), sometimes food, depending on flight duration, and decently comfortable seats. Your suit jacket sits on a hanger (not crumpled into a tightly crushed ball at the back of the overhead). And it’s all calmer and quieter. Today’s domestic Business Class isn’t all that different from what most air travelers experienced at the beginning of the jet age. In 1964, Economy Class seat pitch averaged 36 inches on US airlines, according to the Harvard Business Review, nearly the same as Business Class today and, of course, meals were served.
International Business Class is another matter entirely, and it should be. Flying squeezed in 29E to Chicago for a couple of hours isn’t fun, but hey, no big deal. Even flying across the Atlantic in coach can be a tolerable, if unpleasant, transit that leaves you at least minimally functional after a day’s recuperation. But 16 hours from Chicago to Hong Kong or from Sydney to Dallas, now within the nonstop range of the most modern wide-body jets? Discomfort seems to increase exponentially with time spent aloft. By nine or ten hours in coach, you’re ready to relinquish your firstborn for a big lie-flat seat, a semblance of “real” food, and some peace and quiet. For non-elite, ordinary fliers, International Business is definitely something to write home about.
Consider the quintessential long-haul business flight, New York to London, evening departure, morning arrival, about seven and a half hours. On global business airlines like British Airways and American, roughly 20 percent of the passengers reportedly fly Business Class (another 5 percent may actually buy First Class)—an extraordinarily high ratio, with lots of execs and financial types. After a long day on Wall Street, and sitting through the early rush on the Van Wyck Expressway (a misnomer if there ever was one for the infamously jammed highway in Queens) you arrive, frazzled, at the crowded Kennedy terminal. Regular folks face a bedlam of anxious, confused, excited travelers heading to all corners of the globe, staring blankly, if desperately, at the chaos around them. For you in Business, though, there’s a separate and far shorter line, where the check-in agent is more likely to be an airline employee who might actually care about your seating preference.
When you check your luggage (no fee), they slap on a “priority” sticker that sometimes (who knows how often, really?) gets your bags off the plane more quickly on landing. Some airlines automatically invite you to their business “lounge.” Even if it’s only a place to sit, a cup of coffee, and some packaged crackers, it’s better than waiting in the rush-hour chaos of the airport, with the drone of security warnings, fast-food fragrances, and incessant “Airport Network” broadcasts emanating from gateside monitors at 50 US airports.
Once on board, there’s plenty of room, a flight attendant hands you high-tech noise-cancelling headphones to watch the personal pop-up LCD screen. A drink in a glass, then a choice of meal (rarely anything to savor, but still actual food) and a decent wine. After dinner, there’s a reasonable chance of getting some sleep, on a real pillow with a clean blanket, stretched out on your convertible seat, before they wake you an hour prior to landing with a microwaved croissant and coffee (even if it’s two a.m. on your internal clock). On arrival, you join the special “fast track” lane at Heathrow to clear Her Majesty’s Customs and EU immigration. If all goes well, you’re in decent shape to handle a morning business meeting in the City or even a half a day of sightseeing before you crash at teatime. In the back, using a laptop is an acrobatic exercise and the main job of the flight attendants seems to be monitoring the inmates for buckle-up compliance, with occasional cries of “seat belts!”—usually just when you are about to snatch a few seconds of miserable upright sleep.
It’s not just the greater personal space, or even the relative lack of hassle. Business Class connoisseurs will tell you that it’s really all about the Seat—your airborne “home,” sometimes for hours on end. A decade ago, Business Class seats were just seats. They reclined several inches, but if you really wanted to sleep, you needed a couple of stiff martinis and an unusually elastic spine. In 2000, though, British Airways launched the Seat War as a weapon in its battle with arch-rival Virgin Atlantic for the lucrative transatlantic Business Class traveler. Where Virgin’s stylish new “Upper Class” offered “guests” in-flight neck massages, designer cocktails, and lots of entertainment options, traditionally staid BA (self-described as “the World’s Favourite Airline”) promised Business passengers “beds” that “lie flat”—really, a seat that folds fully back with a leg-rest that simultaneously extends to create a flat surface. (Think of a La-Z-Boy that reclines to horizontal.) Packed with yards of high-tech electronics, the new seats massaged, adjusted lumbar pressure, provided high-tech entertainment, and with all the bells and whistles cost the airline almost as much as the average 4-year tuition at a public university—some $50,000 to $75,000.
Today, the lie-flat seat is just the price of admission in the race to woo long-haul business fliers. Now the battle has advanced to a question of geometric exactitude: Just how flat is “flat”? British Airways’ earlier versions of “lie-flat” seats were actually “angled-flat”—flat, but also slightly slanted, such that passengers complained they “slid down” the seat when sleeping. Airlines could fit more angled seats into the cabin, though, as one passenger’s legs tucked under the reclined seatback of the passenger in front, taking up less space between rows. But the “fullflat” seat soon became the Holy Grail. A trivial distinction? Maybe to the guy crammed in coach who’d just like to cross his legs, but not to the Wall Street exec who’s paying $5,000 each way in Business for a decent shot at three or four hours of sleep before starting another workday. So important has the Seat become to the top of the business travel market that United, American, and Delta are spending hundreds of millions of dollars to outfit their fleets with honest-to-God “full flat” seats.
Business Class is the airlines’ profit sweet spot, where the revenues they earn from higher fares far outweigh the extra costs they pay. If the airline can fill the front cabin of its Boeing 737 with either 30 Economy seats or 16 Business Class seats, it makes better business sense for it to choose the Business seats—as long as it can collect twice as much money for each of them on average. The fact is that the airline can often collect much more than double; domestic Business Class fares can be three to five times as much as coach, even though many Business Class fliers don’t actually pay “full” retail fares, what with corporate discounts and upgrades. So the airline comes out ahead by focusing on the front cabin. The economics of international Business Class are even clearer. At least on some unusually business-heavy routes like between New York and London, the relatively few “premium” passengers can generate nearly three-quarters of what the flight takes in. In May 2012, American’s chief commercial officer revealed that 25 percent of the airline’s customers produce 70 percent of revenues.
Movin’ On Up
People don’t pay five or ten times more for Business Class just for creature comforts. They also crave something less tangible, something as ancient as the wolf pack: status and recognition. One of the big perks of Business Class has nothing to do with better food or wider seats—it’s that the flight attendant addresses you by name when she or he takes your meal order. That’s right, your very own name, read right off the torn sheet of computer-generated flight manifest! In the grimly impersonal, rigorously standardized experience of modern mass air travel, any hint of personal recognition or status is a rare, valued—and eminently salable—commodity. Can you blame Cathay Pacific flight attendants for trying to monetize the value of a smile when, as part of labor negotiations for a 5 percent pay hike in December, 2012, they threatened not to serve booze and food—and to stop smiling at passengers?
This is hardly lost on the global airlines that cater to comfort-seeking, world-beating business travelers, either. Why else would high-end travelers willingly pay a premium of thousands of dollars to fly on a relatively small airline based in a tiny equatorial country the size of New York City—Singapore Airlines? Sure, they get a gourmet meal, an excellent wine, and a comfy sleep, but more important, they also get the fiction that, even at 35,000 feet, they remain in control of their Type-A lives. They get to choose when to eat—they can even order online before the flight. They get to choose between two world-class Champagnes—not because standard-issue vintage Dom Pérignon is anything but faultless, but because there must be a choice. On some flights, there’s a choice of nine types of dinner rolls. And Singapore flight attendants are schooled in the art of wine—not because the airline couldn’t easily print a list describing the half dozen wines on board, but because choosing the wine is an event that affirms the passenger’s autonomy.
Singapore’s not alone. Closer to home, genius airline marketing goads business fliers to pursue “status” almost for its own sake. Flying a lot becomes personally transformative. To be “elite” you needn’t be rich or smart or beautiful, or graduate from Harvard or Amherst or race yachts on Nantucket Sound or have ancestors on the Mayflower. The biggest US airlines are each thought to have upward of a million “elites” of some stripe, and frequent-flier expert Randy Petersen, founder of the popular InsideFlyer.com and FlyerTalk.com websites, estimates there are 4.2 million “elites” worldwide (out of some 320 million frequent-flyer members), according to a New York Times report. Heck, you’re sort of elite just by paying the Business Class fare. To be really special, though, you also need to be “loyal” to the airline. The basic measure of true fealty remains how many miles you’ve flown on the airline, though that’s changing as airlines start to focus on how much money you “contribute” to the carrier, not just how much territory you’ve crossed in low-fare, low-profit “mileage runs” taken for the sole purpose of accumulating miles.
Loyalty also begets special titles—you’re “preferred” or “gold” or “diamond” or, better yet, a Mao-like “Chairman’s Preferred.” You can even “earn” an impressive list of compound titles, say “Executive Premier” or “Executive Platinum” or “Diamond Medallion.” The truly “elite”—those itinerant souls whose if-it’s-Tuesday-it-must-be-Akron jobs keep them in the air nearly constantly—are even “invited” to join “exclusive” secret airline societies, so secret their name is rarely spoken. A kind of mysterious airborne fraternal order where your discreet membership card—“Global Services” or “Concierge Key”—gets you a “special” phone number and a good chance for free upgrades. Airlines don’t say, but estimates are that the top elite status levels are bestowed on only about 1 percent of each airline’s top “revenue contributors.” These are the folks who spend a cool quarter million or so buying tickets for themselves or their businesses and so rate what American’s sales exec calls “high-touch end-to-end” service—which sounds uncomfortably more like TSA’s “enhanced” screening.
Fly a million miles on American and you’re “Lifetime Gold”; another million and you’re “Lifetime Platinum.” And any poor wretch who flies four million miles on United—equivalent to circling the entire globe 160 times!—gets to be super-“elite” for life, or whatever remains of it. Beyond the perks and honorific titles, there’s the recognition. Elites on some carriers are specially “invited” by the harried gate agent to “walk across the red carpet” to the jetway—so everyone can see who ranks. Then there’s the chance to climb aboard the plane first (“preferred” boarding) along with the infants and “those needing special assistance.”
According to Peterson, there are more than 400,000 “mileage millionaires,” but a man named Tom Stuker has actually flown more than ten million miles on United. To celebrate his accomplishment in 2012, the 56-year-old auto-sales consultant was awarded a “Titanium Mileage Plus Membership Card,” had his name painted on a jumbo jet, and was feted at a party with the airline’s CEO. What he seems to enjoy particularly, though, is the special recognition from telephone reservations agents. “They know me,” the ultra-elite Mr. Stuker told Time magazine in 2009. “I got my own 1-800-KISS MY ASS hotline.”
If it all seems a little much, status is deadly serious to the airlines and to their loyal flying “elites.” Airlines fight to maintain the “integrity” of their elite check-in lines, battling “line pollution” by ordinary passengers. Elite road warriors—grown men and women, for goodness sake—can be heard to denigrate the “gate lice,” a term occasionally used for less elite travelers who crowd the boarding gate, sometimes trying to cadge a free upgrade or sneak aboard before their allotted priority in order to snag overhead bin space. Maybe it’s some deep human need for social stratification, but the sense of entitlement, even superiority, is palpable. Even before it starts, super-elites get their phone calls to one major airline answered within 10 seconds, reports consumer travel writer Christopher Elliott; the rest of us are lucky to endure only two minutes of “Your call is important to us.”
It’s all reinforced throughout the journey. Merely boarding the plane involves lots of parsing of status and priority—distinguishing the seraphim from the cherubim, an elaborate ritual that can extend the time to load a 150-seat domestic jet to nearly 40 minutes. That’s nearly half again as long as the 30 minutes it typically took in the 1980s (though planes were much less full then) and nearly double the time it took less-hierarchical Southwest to fill up in its glory days. Once aboard, your relative “eliteness” dictates other things—for example, what you eat. Some airlines follow a strict priority for taking meal orders in the front of the plane; woe betide the busy flight attendant who offers the last filet mignon (the airplane version anyway) to a Premium Executive before she asks a Global Services member. Never mind the greater legroom and wider seat—it’s all about status and “personal” recognition. You’re a person, not just a fare!
America’s Second Currency
Not many fliers can afford actually to pay to escape Economy Class. Some fly Business because their companies can afford it. Most of the folks up front, as we’ve seen, are in the big seats because they regularly and reliably produce revenue for the airline. To keep these precious frequent customers from the clutches of lower-fare competitors or luxury foreign carriers, for that matter, airlines reward them with a powerful incentive—free escape from coach misery with the almighty “upgrade.”
Marketing innovator American Airlines launched the first mileage-based frequent-flier program in May 1981, as a way to keep passengers “loyal” in the face of new competition unleashed by US airline deregulation three years earlier. What could be simpler in concept? If you buy 12 cookies, they toss another one in the bag. To identify worthy “members” of its new frequent-flier “club,” American simply searched its then-rudimentary computer reservation system for recurring telephone numbers. To that list of its 130,000 most frequent fliers, it added 60,000 members of its Admirals Club airport lounges. Grasping the potential, United and TWA followed suit in a matter of days.
Thirty years later, collecting—or, rather, “earning”—miles has become almost a national obsession. And not just for road warriors and airfare geeks. American’s original membership of less than a quarter million grew to more than 69 million by the end of 2011, according to the Dallas News. By then, there were half as many US frequent-flier members as there were adults living in the United States—and, according to InsideFlyer.com, some 10 to 15 trillion frequent-flier “miles” outstanding and unredeemed (all of them angling for free flights to Hawaii at Christmas). Uncounted websites and chat rooms and online “communities” obsess about “miles”—how to get them, how to sell them, how to use them to beat the airlines. By 2012, an estimated 320 million humans across the globe were hoarding “miles.” BusinessWeek in 1999 dubbed them America’s “second currency.”
And why not? Who doesn’t love to get a “reward”? For millions of occasional air travelers—regular folks with regular salaries who drive the kids’ carpool or go downtown to work each day—frequent-flier programs offer the best, maybe the only, way they’re going to see the grandeur of the Alps or the Great Wall without shelling out thousands they don’t have. On the large US airlines, some 7 to 9 percent of passengers use award tickets in a given year. Airlines, in turn, get an incredibly effective marketing hook that keeps “their” core customers from straying to competitors, a hook that drives serious revenue.
It sounds like a fair bargain, except that, over the last decade, the “exchange” has gotten increasingly one-sided. As carriers started cutting back on the number of seats they fly, both “free” and paid, they’ve also flooded the market with more and more miles. More miles chasing fewer seats make it ever more difficult to redeem award seats or upgrades, and there’s no Treasury Department or Federal Reserve to oversee the devaluation of this currency. Frequent-flier programs are practically unregulated, and airlines have used their free hand—deciding unilaterally how much a mile is worth (how many you need for each award or status level), how many “free” seats to make available, and what extra fees to charge to redeem those seats.
The only serious check is the very remote possibility that an airline’s most reliable consumers will stop griping on frequent-flier online chat rooms and jump ship to Southwest, or maybe Greyhound or NetJets. To make sure that doesn’t happen, though, airlines rarely mess with the perks for their very, very top customers—those top-level elites who fly the equivalent of at least twice around the globe every year. As for the rest of the Silvers and Golds, though, they’re largely captive. With only three or four US airlines offering global networks, and half the major US hubs dominated by a single airline, where exactly are they going to go?
What’s the disincentive, after all, for carriers to keep raising the number of miles needed for a free trip or an upgrade? That 60,000 miles you saved for the anniversary trip to Paris? Sorry—that’ll now be 75,000 miles. Mileage expert Tim Winship estimates that the value of a frequent-flier mile has dropped from the old “rule-of-thumb” 2 cents to closer to 1.2 cents. Or a slightly more subtle approach taken by some airlines: create a new “preferred” mileage “tier.” Maybe you can still cruise the Seine for 60,000 miles, but only in the middle of damp and snowy February, when the kids are in school and planes are half empty and nobody else wants to go to France. Or you can just declare unilaterally that miles “expire” after an arbitrary period of account inactivity. Continuing “mileage creep” has already put popular travel rewards out of reach for many would-be vacationers. Try taking your spouse on a peak summer jaunt to Europe in Business Class. You’ll need about 500,000 frequent-flier miles in your account—what you earn by circumnavigating planet Earth 20 times.
Airlines don’t even have to play with the award-seat mileage requirements, though. To reduce their costs on loyalty programs, they can just make fewer award seats available. One airline promises to keep “a select number of seats” for frequent fliers, but who’s “selecting” that “number”? With paying passengers filling so many flights, it’s no wonder award seats seem ever harder to snag. The last DOT Inspector General report on the subject in 2006 found the number of seats in fact dropped 11 percent between 2000 and 2005. Are airlines really about to happily give away lots of free seats they’re confident of selling for cold, hard cash?
Even if the absolute number of award seats remains the same, miles are worth less when everybody’s got them. Over the last decade, collecting miles has had less and less to do with actually flying. Swiping your airline co-branded Visa card gets you miles for your morning coffee, your mortgage, even your funeral. Banks, credit card firms, hotels, rental-car companies, and retailers buy miles by the millions from the airlines for cash, to give them away to their own customers as incentives. American in 2010 actually sold almost twice as many miles to other companies, including Citibank, than it awarded directly to its own passengers, according to a 2011 study by IdeaWorks. Citibank gives them to its credit card holders to get them to swipe the plastic. Of course, airlines don’t want to upset their frequent actual fliers, the folks who stick with the darn airlines month after month in hopes of snagging a free trip to Hawaii, by flooding the market with miles, but the temptation has to be huge. United made an estimated $3 billion selling miles to third parties in 2010 and, according to IdeaWorks, the carrier’s subsidiary for its Mileage Plus program was the only profitable piece of its globe-spanning empire when the company declared bankruptcy in 2002. So the good news is that it gets ever easier to accrue miles, but don’t count on using them to see the sunrise over Mauna Kea for free; the rest of humanity has plenty of miles too.
The whole mileage game is very good business for the industry. Airlines value a “mile” as a liability on their financial books at only a small fraction of a cent, and estimate that about 15 to 20 percent of those miles will never be redeemed. According to InsideFlyer.com, a favorite website of the mileage-obsessed, American’s AAdvantage program, for instance, effectively “owes” participants the equivalent of 5.9 million round-trip Business Class flights to Europe in frequent-flier miles they haven’t redeemed.
On the other side of the ledger, mileage programs turn the airlines’ “distressed merchandise”—seats that may otherwise go empty—into rich sources of ancillary fees and other revenues. “Free” tickets—a term airlines now avoid—aren’t really free anymore. Reward tickets come with lots of their own gotchas. You still pay “surcharges” and à la carte fees (for instance, for checked bags and seat assignments), but there are also “redemption” fees, co-pays, sometimes special “booking fees” merely to reserve an award seat. At least one carrier charges a $25 “award redemption processing fee” that jumps to $50 if you’re flying to Hawaii (a top award destination) where processing must be uniquely expensive.
Beyond generating revenue, though, frequent-flier programs are potent competitive weapons for global airlines. Road warriors chasing status, upgrades, and escape from the hoi polloi are bound by their carrier’s golden mileage handcuffs—almost no matter how much they hate its service or fares. In the real world, not many United Premier and Delta Gold Medallions will “waste” 2,269 miles—another step on the journey to Premier Gold and Platinum Medallion—by flying cross-country on JetBlue or Virgin America. James T. Kane, a business consultant on customer loyalty, put it succinctly: “I’m not loyal. I’m just a hostage.”
In the end, the whole frequent-flier mileage obsession can seem a little ridiculous. Respected business executives fly at ungodly hours, make strange connections and same-day “mileage run” flights to random destinations, even pay higher fares just to score enough miles on “their” airline to retain or advance their “status.” Some spend hours on frequent-flier websites and online communities dedicated to the obsessive accretion of miles, just for the joy of beating the system. There are endless discussions of surefire strategies for exploiting airline reservation systems or outsmarting the upgrade process, as well as Talmudic debates on such arcana as how to wangle a “status” upgrade on a code-share flight when holding a discounted Business ticket. Get a life! Here’s how one rueful business traveler blogged about his quest in March 2008, in a USA Today online comment:
I just got the congratulatory notice that my elite membership had been renewed for another year. My wife read it to me while I was at the airport, on the same day it was my son’s 5th birthday. I have come to realize the price you pay to be a Platinum, Diamond, or Blue Chip member is to watch your kids grow up and your marriage deteriorate from an airport lounge in some distant town. When I first started to travel I would envy those as I walked down the aisle of first class on my way back to economy.… But I did not know the price you have to pay.
You have to ask: Is this frequent-flier obsession totally irrational? Is it all a sucker’s game? Is it just plain silly?
Yes, yes, and yes. And I have another embarrassing confession to make.
Two years ago, I actually paid my hub airline $799 in hard-earned cash for the privilege of “fast-tracking” my elevation to low-level elite status. In effect, I bought my way up, purchasing the 10,000 miles needed to attain “Premiere”-ship. Why would I do that?
Because I wanted a little relief from the air-travel grind. A shorter airport check-in line manned by a knowledgeable airline employee. No extra fee for a checked bag. Access to the “premium” security inspection line, where, in a rush, I was less likely to be trapped behind a multigenerational family of tourists. Not having to push for overhead space for my carry-on. An exit-row or aisle seat with a few more inches of room. The possibility, however remote, of an upgrade to Business Class that would buy me a “free” drink, a smile from the flight attendant, and a touch of humanity. Small comforts, but still a modicum of escape.
The Dream of First
If Business Class is designed to make flying a non-event, a transit from which you emerge relatively unscathed, First Class (the international version, not the domestic service that some US carriers call First Class) is in a way just the opposite. It’s flying as an experience to be savored, more about enjoyment and luxury than mere comfort or efficiency. This is the realm that few fliers attain but all aspire to, the place you glance at covetously, your view blocked by the purser as you turn right at the aircraft door on the way to your seat.
For most folks, it’s really not worth vaulting the fare chasm. At the end of 2012, the 12-hour flight from San Francisco to Beijing that cost $5,000 in Business was more than double that in First. Transatlantic fares are similarly skewed. A weekday Chicago-to-Paris flight, about $1,500 in coach, ran $6,800 in Business and a whopping $17,500—that’s $2,000 per airborne hour—in First.
What does the extra $10,000 buy you? Maybe a great wine and as good a dinner as can be prepared in a convection oven at 35,000 feet. Enough movies and music to last a week instead of a weekend. And likely a very nice preflight lounge—though how much can you sit and eat while waiting to take off ? For decades, the greatest distinction between First and Business was, again, the Seat. The First Class seat was typically a big, plush affair, with tons of stretch-out room, a deep back recline, and ample, electronically controlled footrests. Clearly better than in Business. But when airlines began installing “lie-flat” seats not just for the aristocracy in First but also for the mere merchant class in Business, even the wealthiest fliers had to ask if it was really worth the immense price leap. To justify that difference now, First had to be far more than a marginal improvement; it had to be over the top.
But how much wonderfulness can you cram—legally, at least—into 12 hours in an aluminum tube? What else but, as Singapore Airlines hypes it, “Beyond First Class”? A kind of battle of excess ensued. For the select few flying on carriers like Emirates and Cathay and Singapore, the new “Beyond First Class” meant this:
Sleep: full lie-flat beds that convert at the touch of a button, real pillows and Egyptian-cotton sheets and duvets; personal Givenchy robes and pajamas; combinable privacy “suites” where couples can enjoy their very own stand-alone double bed—coyly advertised with rose petals strewn on top (Singapore Airlines cautions occupants to “observe standards that don’t cause offence to other customers and crew,” but who’s kidding who?).
Serious privacy: private mini-pods spaced far apart with electric sliding doors, and complete segregation from the Economy Class hoi polloi—from boarding via a separate jetway to being escorted upon arrival through special exits and immigration lines to a private arrival lounge.
A vast array of entertainment choices: full-size personal television screens with scores of in-flight video choices, first-run movies, and nearly a thousand musical selections.
Extravagant dining—whenever you choose—including generous servings of caviar (over $1,000-a-pound retail Caspian Ossetra), lobster, and even fresh sushi prepared by an onboard chef. (Korean Airlines’ organic farm on Jeju Island grows its own beef, chicken, and vegetables for First Class palates.)
Endless top-quality Champagne and vintage “Grand Cru” Burgundies and fine spirits, plus exclusive cocktail lounges where onboard bartenders mix exotic drinks.
A bathroom freshened by cut flowers kept sparkling throughout the flight for you and maybe six or seven other passengers, not the four or five dozen per head in Economy. (Carriers like Air Canada, Lufthansa, and British Airways feature windows in some lavs, but not to be outdone, Oman Air’s First-only lavatory on its new A330 reportedly features a bidet.) The “ultimate” bathroom perk, so far offered only by Emirates and only on its A380s, is the in-flight hot shower and steam in two “spa” rooms whose comfortably heated floors are continually kept spotless by dedicated bath/shower attendants. (Consider the opportunity cost of hauling the extra half ton of water across the globe in lieu of a half dozen paying passengers.)
Constant personal attention from a specially trained flight attendant, one for as few as every four to six “guests.”
Is all this wretched excess really good business? Delta and Continental, outgunned and outclassed in the ultraluxury department, dropped First entirely in favor of a larger Business Class in the late 1990s. United and American blanched at the cost of running a First Class sufficiently over-the-top to compete, and they’ve commandeered some First Class real estate to expand Business Class. Yet they couldn’t entirely eliminate First if they hoped to battle for super-high-end transoceanic passengers with the likes of Singapore, an airline that spends $16 million annually just on vintage wines and is historically the world’s second largest buyer of Dom Pérignon Champagne.
Theoretically, at least, the extra operating expense is more than offset by the ultra-high First Class fares airlines command for ultra-luxe service. Consider a British Airways 747 flying from New York to London in mid-March 2013. The advance-purchase round-trip coach fare was about $800, while fully-refundable First Class was an eye-popping $19,500. If—and it’s a very big “if”—even 5 of the 14 cushy sleeping pods up front were actually paid for in full, the front cabin would generate more than $100,000 for the airline—roughly the same as the entire 177-seat coach section at normal 80 percent loads (about $113,000). In other words, the handful of super-spenders in First could be worth to the carrier—again, theoretically—almost as much as the entire mass of “regular” passengers.
In reality, only a small cohort actually pays the full First Class fare, no matter how luxurious the ride. Airlines tend to treat that precise proportion as top-secret, and it varies widely by flight, route, and carrier, but industry veterans estimate that full-fare passengers fill as little as 5 to 10 percent of most First Class cabins. (Even paying First Class passengers don’t all pay retail, considering corporate discounts and other deals for high-volume purchasers.) The rest of those up front are more likely to be upgraded “elites” risen from Business Class, frequent fliers who’ve hoarded “miles” for the trip of a lifetime, and a sizable cadre of “non-revenue” passengers—including lucky (and presentably dressed) airline employees who fly free based on seniority when, rarely, there are otherwise empty seats. All that said, Delta disclosed in 2011 that it sold 14 percent of its seats in domestic First Class (really a hybrid Business Class named “Business Elite”), and some well-timed business-heavy international flights like New York–London can reportedly rack up double that percentage of honest-to-God paid-up First Class fliers.
Airlines don’t like to talk about freebies and upgrades to First, of course, and say they strive mightily to maintain the “integrity of the First Class product.” Who wants to be the only sucker in the front cabin who’s coughing up real cash for the big seat and glass of bubbly? A very few carriers even keep First Class semi-sacrosanct by making it almost impossible to gain access without paying the fare. Singapore Airlines, for example, reputedly releases only one or two First Class seats for upgrade on any given flight, and then only if the supplicant has demonstrated extreme past loyalty to the airline. A “full” First Class mileage upgrade round-trip between New York and Tokyo at peak times in 2012 required, in addition to the hefty Business Class fare, one million frequent-flier miles. That’s just over two round-trips to the moon.
For many global airlines, the business rationale for maintaining a world-beating First Class is ultimately about more than generating revenue from a relative few ultra-high fares. Just Google “Emirates showers” to appreciate the massive free publicity a couple of glorified (OK, glorious) onboard lavatories can generate. It’s also about image and publicity. A great First Class enhances the airline’s overall reputation—if First Class is so great, coach can’t be that bad—just as the hugely expensive Concorde burnished the image of its owners Air France and British Airways. In the end, First Class is largely about aspiration. It creates a dream of air travel, a goal for the poor soul stuck back in Row 41 for nine hours, or the sales guy flying monthly from O’Hare to Omaha and diligently tracking his “status” and “miles.”
Membership Has Its Privileges
There’s only so much you can do in the air to separate the merely big spenders in Business from the true price-is-no-object First Class flier, but there’s a lot you can do on the ground to create the aura of exclusive luxury. Like much else in the industry, the airline “club” or “lounge” is a world of stratified privilege and privacy—for a fee. Especially since 9/11 turned the airport into a high-stress zone, the airport club has been a key part of the total air-travel experience.
Airline clubs originally were, literally, clubs. When American opened its first “Admirals Club” in 1939 at New York’s LaGuardia, entry was by invitation only; the airline’s top executives chose the invitees. With mass travel and the jet age, airline “clubs” became freestanding enterprises—open to anyone for a fee, daily or annual. Though often crowded and hardly posh, they still offered escape from the noise and bustle and grime of the terminal, a relatively tidy bathroom, a free biscuit and coffee or modest glass of wine, and a place to plug in the laptop. But far from luxurious, as one blogger-flier described his airline’s “bus terminal” lounge at ultrabusy O’Hare:
It used to be a membership Club, but is now available to persons buying day passes, signing up for credit cards, paying with points … in fact, virtually anyone with a pulse and money can now enter, which means it’s overcrowded. Showers [don’t] work, the attendant said [the airline] doesn’t maintain them. The lounge attendants are rude and unhelpful. Cheap drinks are on the house, but not an open bar. Anything of quality must be paid for. A pretzel is [the airline’s] definition of food. Absolutely abysmal.
The “real” First Class lounge—not for the mere road warrior—is often in another universe. You need an airport map to find it—and that only comes with an International First Class ticket or extreme eliteness. Hidden away from the crowds, up the elevator, around the corner, down the hallway, there’s actual food, cushy armchairs, a clean shower and private dressing room, even a touch of design elegance. Cognoscenti have favorites. Virgin Atlantic’s Heathrow outpost—the “Clubhouse of all Clubhouses” it gushes—offers shoulder massages, a Martini Loft, and a “poolside lounge.” United’s First Class club at San Francisco—a preferred gateway for wealthy travelers to Asia—resembles a luxury hotel lobby, complete with Chinese wall hangings, a constantly refreshed international buffet, and suited attendants who speak in hushed tones. Lounge lizards also speak fondly of Thai Airways’ Bangkok club, Qantas’ lounge in Sydney and British Airways’ modestly self-described “sanctuary away from the outside world” and “the epitome of elegance” at Heathrow.
In the ongoing competitive battle for the world’s ultra-premium fliers, though, Lufthansa has taken the club concept to the next level—with not just a premium club, but an entire, stand-alone First Class–only terminal at its Frankfurt hub. Don’t even try to get in with a Business Class ticket, much less a First Class ticket on another, lesser, airline, even if it’s one of Lufthansa’s “alliance” partners. That lets me out, but a senior West Coast airport executive I know who visited the establishment not long ago testified that it is all, well … first class.
You pull your limo right up to the door, next to another passenger’s half-million-dollar McLaren roadster, and the valet will happily take care of it. Your elegantly suited “personal assistant” waits at the entry to take your coat and escort you through your private security screening, taking care not to crease your suit jacket. Up the elevator to the chic, minimalist lobby done in rich earth tones and filled with white orchids. You’re whisked to an elegant lounge area, where you can relax with a crystal glass of bubbly and a few imported olives as they take your ticket and handle all those bothersome check-in formalities. (Your passport and documents are returned as you board the plane, after a private immigration check.)
While waiting, your private spa room is available for a massage shower, a facial or, should you prefer, a milk bath (a deal at €60), complete with premium toiletries and a fluffy bathrobe. Then it’s time to unwind at an elegantly sleek cocktail bar with a liberal pour of single malt or 85 other whiskeys. Should you wish to dine, a top-flight restaurant (gratis) awaits across the terrazzo slate floor. After dinner, check the scores of international periodicals in the library, watch a new movie on a private DVD player, or enjoy the cigar lounge—presumably stocked with mellow Havanas and some old brandy.
Prefer a preflight nap? There are private sleeping rooms with full beds and private baths and, don’t worry, your personal assistant will make sure to wake you for the flight—but not too soon. He or she is in direct contact with your plane to make sure that it waits for you. Only then are you escorted down the airside elevator to the waiting new Mercedes or Porsche, your luggage already stowed, that whisks you to the door of the First Class cabin. All in all, it sure beats shuffling through the twelve-deep check-in line at Newark on a rush hour Thursday afternoon.
It’s tough to top Lufthansa’s palace, but luxury airlines continue to try. Singapore’s ultra-super-duper First Class lounge is called—what else?—“The Private Room.” It’s so exclusive that when it first opened, reportedly even a First Class ticket wouldn’t get you in. To be “invited” you also had to have paid full fare for that ticket. After the 2008 economic downturn, the airline relaxed the rules a mite, but until then, pretenders to true First Class status, through upgrades or frequent-flier awards, were said to be discretely directed elsewhere.
Today’s International First Class travel is all about privacy and seamlessness. A world of isolation where, from the time you reach the airport until you arrive at your destination, you need never even glimpse the rest of the passengers, much less rub shoulders with them, except for the select few—rarely more than a dozen—in First. Of the 526 seats on Lufthansa’s superjumbo A380, only eight are in First. It’s a rarefied universe where the goal is, really, to emulate the experience of a private jet (but with the long-haul range and technical reliability of a major airline). As one Wall Street analyst observed in Newsweek, “real” First Class fliers today could “probably afford to take their own Gulfstream.” If “super-first class is edging close to the cost of hiring a private aircraft,” the analyst mused, “why would you bother” with the airlines?
Why, indeed?
Real Players
No matter how cushy your First Class crib or how luscious your after-dinner chocolate truffles, you’re still in the commercial aviation system. The only complete escape is to stop “flying commercial” altogether—and take a private jet. The infamous “master of the universe,” fictional financier and villain Gordon Gekko put it this way in his immortal rant to an aspiring acolyte in the 1987 movie Wall Street:
Wake up, will ya, pal? If you’re not inside, you’re outside, OK? And I’m not talking a $400,000-a-year working Wall Street stiff flying First Class and being “comfortable.” I’m talking about liquid. Rich enough to fly in your own jet, rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player …
Not only do you not “waste time,” but flying outside the commercial airline system you escape:
Lines at the airport terminal: Typically, there’s no terminal as such at all. Your driver pulls up to the front door of the airport’s “fixed base operator,” or “FBO” (a firm like Jet Aviation or Signature Flight Support or Million Air that services private aircraft), and you walk right into the executive lounge, where someone takes your luggage, offers you a drink, and tells your waiting pilot you’ve arrived. (Big FBOs have nice pilot waiting lounges.) On landing, your plane taxis right up to the door; your car waits at the curb to whisk you to your business meeting or the hotel they’ve reserved for you. No muss, no fuss.
Security drama: So far, there’s no TSA screening at all of individual passengers unless in the very rare case the pilot requests it. No magnetometers, no wands, no groping, and no lines. When TSA had the audacity to try to collect background information on private-jet passengers, operators successfully rebuffed this “invasion of privacy” of their elite fliers. As the CEO of a leading corporate jet-maker once observed mildly, albeit in a different context, “[aircraft] owners are influential people.”
Boarding delays: The plane waits for you. Just give the FBO receptionist your plane’s tail number (the identifying numbers on the back of the plane, starting with the letter “N,” in the United States, called the “N-number”) and he notifies the pilot that you’ve arrived. Don’t worry about airline schedules. Generally, you can change your FAA-required instrument flight plan 30 minutes before departure.
Airline food: What you want to eat or drink is delivered fresh to your aircraft door by a local charter-catering firm. Some focus on the high-end palate, but even the omnipresent “deli platter,” fruit plate, and defrosted shrimp cocktail still easily beats a $6 snack pack.
Publicity: It’s a matter of public knowledge where your commercial flight is traveling. Its altitude, speed, direction, and arrival time are all available in real time to anyone with an Internet connection. Not so for private planes. Only the FAA knows for sure your flight details. Your whereabouts can in most cases be hidden from the public and prying news media—amazingly useful if you’re a top executive visiting a potential corporate takeover target, a football coach courting a hot prospect, or, better yet, an unloved head of state fleeing with the national treasury. During the 2011 “Arab Spring” uprisings, demand for private charters in the Gulf Region soared so fast that one-hour flights on an 18-seater were reportedly going for as much as $18,000.
Destination restrictions: Commercial airlines fly to fewer than 500 or so of the nation’s 5,000-plus public airports. Private planes access the rest—rural areas and small cities, not to mention remote airstrips.
All in all, air travel off the grid is liberating. You drive to the plane, get on board, and go. No tiresome process, no mass herding, no mystery. And it’s the only way to go when time is really tight—corporate jets cruise at about to normal airliner speeds—or when complex itineraries are changing fast.
But don’t let anyone tell you that flying private is just about business efficiency. There’s an undeniable emotional charge of being above it all (literally and figuratively) in a private jet. You’re a “player”—as Mr. Gekko would say. It’s everyone’s dream. Why else would Playboy’s Hugh Hefner, the ultimate dream marketer, buy an old DC-9 (last sold to AeroMexico and stripped for parts) and call it “Big Bunny”? Why else was Donald Trump’s recently replaced vintage Boeing 727, fuselage emblazoned eponymously (reportedly in 23-karat gold leaf, no less), so often parked in full view of a busy runway at New York’s close-in LaGuardia Airport? Why do Google’s founders have their own fleet of jet aircraft?
I’ve been fortunate, while in government, to experience flying off the commercial grid—on Learjets piloted by my boss the FAA administrator, on the agency’s premier plane, registration “N-1,” a 1989 Gulfstream IV painted light blue and white, and emblazoned with UNITED STATES OF AMERICA on the side; even once, wide-eyed, on President Clinton’s Air Force One. After traveling on N-1 for a two-week, multi-stop journey through Asia to negotiate liberalized aviation agreements, it was tough to return to my normal perch in commercial Economy. Not because the government jet was super-plush—it wasn’t; our onboard catering consisted mainly of bring-on-board corn chips and bottled salsa—but because the plane was always there and ready when we needed to move: no boarding line, no seat assignment, no announcements. True freedom to move about the globe.
No wonder the masters of the universe love it—though there’s sometimes a downside: facing the jealous outrage. Everyone detests those who fly on private jets. OK, that’s more than a bit overstated, but there’s a modern cultural reality: In the eyes of many, corporate-jet flying is antisocial, elitist, even somehow a little corrupt. Flying private can rile-folks up almost viscerally.
The CEOs of the Big Three automakers learned that the hard way when they came to Washington, DC, to beg Congress for a $25 billion taxpayer bailout in the midst of the 2008 recession. They could easily have flown commercial—on almost-hourly flights to convenient Reagan National Airport. Instead, each auto bigwig took his own deluxe corporate jet for the 90-minute flight. The round-trip cost? About $20,000 (each) compared to the $837 First Class fare. Congress was decidedly unimpressed: “I mean, couldn’t you all have downgraded to First Class or jet pooled or something to get here?” jabbed Congressman Gary Ackerman of the House Financial Services Committee. “It could have at least sent a message that you do get it.… It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo.” A disgusted Congress stalled the massive bailout package, demanding that the automakers’ jets be sold.
The lesson wasn’t lost on other corporate high-fliers. Within a year, Citigroup and Time Warner, for instance, were selling down their considerable corporate fleets. And the price of high-end corporate jets—having soared after 9/11 as businesses sought executive transportation with less “hassle”—tumbled. The year before the automakers’ PR disaster, more than 1,000 US corporate jets were sold, buyers were waiting years for the newest models, and owners were “flipping” used jets like McMansions before the 2008 recession. Just two years later, prices had dropped more than 30 percent, some as much as 50 percent. Owning a private jet, bemoaned one aviation executive in Executive Travel magazine in 2011, became “akin to maintaining a mistress on the side.”
Of course, you don’t have to buy a private jet to fly on one. At the low end of the high-end business are air taxis—essentially mini-charters where you can buy a single seat “on demand.” There are more than 2,000 air-charter operators in the United States alone, and brokers will be happy to find you just the ride you need to meet your flight-distance range, seat, configuration, and schedule requirements—figure $10,000 to $15,000 an hour all-inclusive to charter a large Boeing 737 airliner. It’s the only way to go for presidential aspirants trying to hit half a dozen cities per day with media in tow, or a pro basketball team whose elite athletes are entitled by contract to tons of extra legroom.
Or, if you really want to own something, but not a whole jet, how about just a little piece of one? Billionaire financier Warren Buffett’s NetJets popularized the jet “fractional ownership” idea, starting in 1986; now that business model accounts for about 15 percent of all US business aviation flying. NetJets buys business jets by the dozen—in 2011 alone, it acquired 120 Bombardier jets, total cost $6.7 billion—then sells them in pieces as small as one-sixteenth. Your share of the price plus a monthly fee affords access to “your” jet, or one just like it, on as little as four hours’ notice for about 50 hours of flying a year. You still pay a fixed hourly charge, but it’s less than the rate to charter a plane and you can sell your share of the aircraft—think timeshare condo. Prices change, and they don’t like to talk prices anyway (If you have to ask … ), but the cost for one-eighth of a mid-sized jet (equivalent to 100 hours of flying) in 2012 was close to $1 million—plus maintenance and operating costs. For the less-frequent flier, NetJets offers Marquis “debit cards” (others have similar products) that let you buy as little as 25 hours a year flying time on a spiffy seven-passenger light corporate jet—prices start at about $125,000, fuel extra.
In recent years the market for “entry-level jets” or “personal” jets has started to recover. The Brazilian Embraer Phenom 100, for example, priced around $3.5 million, normally carries just four passengers. Sometimes compared to flying in an extra-large SUV with a tiny toilet—if you can call it that—its maximum cabin headroom is less than five feet. Among its customers: the Pakistan Air Force, which reportedly purchased three or four for—believe it or not—flying VIPs. An even cheaper alternative, the Eclipse, was sold in large numbers to an air-taxi firm founded in 2002 named—what else?—Jetson Systems.
The prices of private jets climb rapidly with greater seating capacity, speed, range, and luxury. In the mid-size market, there’s the iconic Learjet, originally introduced nearly 50 years ago and “designed for the upwardly mobile” in the words of manufacturer Bombardier. Toward the upper end of the corporate jet market, the “Cadillac” of private jets may be the ultra-long-range $50 million Gulfstream 550, a plane meant to ease those tedious New York–Tokyo commutes for up to 18 passengers. Aside from its high-end entertainment system and optional beds, there’s a broadband multilink system—“an office in the sky”—that lets passengers e-mail and surf the net at data speeds up to 3.5 MB per second, even at 40,000 feet over Siberia. At the top of the luxury heap—list prices start over $60 million—is the Boeing Business Jet (Airbus has its own version), known simply as the Bizjet. It’s essentially a VIP version of Boeing’s ubiquitous 737, a plane that carries more than 150 passengers in commercial service, but just two dozen or so in private luxury. A third of the BBJs sold to private owners since the launch in 1996 are heading to the Middle East, according to CNNgo.com. What could be handier for an extended family (or the Family)?
Jet-purchasing decisions aren’t just about utility, of course. Add a healthy dose of testosterone. With $80 million burning a hole in your pocket, you want the next greatest thing. Why spend $50 million on a Gulfstream V when there’s a Gulfstream VI just around the corner for only another $20 million or so? For near $65 million, the Gulfstream 650 promised to be faster and more technologically advanced than anything else on the market, the fastest non-military jet in the world. Even four or five years before scheduled production, demand was so huge that Gulfstream had to devise a special process for would-be purchasers. Just to get on the waiting list entailed a $500,000 deposit, and orders would be taken in the order the deposit money arrived at J.P.Morgan’s Midwest branch—starting at exactly 12:01 a.m. on April 15, 2008. Smart buyers opened local accounts at the bank branch in hopes of making an instant electronic-funds transfer precisely when the window opened. Roughly 500 deposits arrived in the first 24 hours, enough to fill the manufacturing schedule for years. The plane Morgan Stanley analysts dubbed the “crown jewel of business jets” begins service in early 2013.
The only way to top a plane that promises to fly near the speed of sound is to fly faster than it. Enter the Aerion, a supersonic 12-seat business jet expected to be built in the next several years and to sell for a mere $80 million. Although it’s still a concept, Aerion says there’s been plenty of interest in a plane that will let you have two breakfast meetings the same day, on either side of the Atlantic; it has 50 letters of intent to buy from potential purchasers, each accompanied by a $250,000 deposit. One of the first orders was signed at the 2007 Dubai Air Show. Sheikh Humaid bin Rashid al-Nuaimi, the 80-year-old emir of Ajman, one of the UAE’s seven emirates, must be in a hurry.
Beyond the Aerion, there’s only the private A380 being outfitted for Saudi prince Al-waleed bin Talal, Citigroup’s largest individual shareholder. Hyped as “The Flying Palace” by Airbus, the $488 million behemoth, certified by the FAA to carry up to 853 people in the commercial version, will house an onboard garage (for the Rolls). A cylindrical elevator will rise from the owner’s private entrance to the five king-bedded master suites, each complete with computer-generated prayer mats that always face Mecca, plus a couple dozen First Class sleeper seats, presumably for the help. On one of the jet’s three floors is a concert hall complete with baby grand that seats ten, which is not far from the marble steam room, the “wellness” room with “scented breezes,” and the boardroom with holographic screens of world financial markets. All something to contemplate as we battle for the armrest back in 42B.