Dallas — Fractional ownership makes travel via private jet more affordable in comparison to fully owning a private jet but how does it stack up against premium cabins in commercial airliners?
In an exclusive interview with Airways, Volato CEO Matt Liotta compared private to commercial aviation and detailed how his company is redefining the fractional ownership industry.
Volato currently offers fractional ownership and charter offerings with a fleet of HondaJets and Gulfstream G280s operating across the Americas.
Brent Foster: What key factor most distinguishes Volato from other private jet or fractional ownership operators?
Matt Liotta: “The fractional programs currently out there all sort of share a similar trait, if you will, which is that they are timeshares. Mainly you determine how much you are going to use the plane and that amount of usage, whether that is hours or days, which in turn determines the size of the share that you need to buy.
If your flying changes during that contract period, you are sort of out of luck. I mean, there are potentially some things you can do but because it is a timeshare that is really what it comes down to, you are making a long-term commitment based on what you expect to be the case.
The way Volato works is that it is not a timeshare, regardless of the share size you buy with us, from the smallest share to the largest, you can fly as much or as little as you want. So in that way, it is completely different than every other fractional operator out there.
What we like to say is, ‘If you bought your own plane, you could use it as much or as little as you wanted. And when you weren’t using it, you could monetize it by making it available for charter and earning a share of that revenue by working with a charter company.’
In our program, we have offered that same kind of approach but we turned it into smaller pieces. So when our customers want to use our plane they can use it as much or as little as they want and when they are not using the plane, we are making it available for charter and we are sharing it with the owners of that plane.”
What are the biggest advantages of the HondaJet fleet for Volato?
“The HondaJet is what I would say is the most modern and efficient plane that is ideally suited for four passengers or less. Believe it or not, in private aviation space, 70% of all missions are four passengers or fewer. Now that doesn’t mean that everyone flies on the HondaJet but the point is that when you look at the numbers this is a great plane from the efficiency standpoint for those kinds of missions.
What could somebody expect when they compare their four-passenger mission in the HondaJet with let’s say similar light jets? Well, on many of the light jets that are six seats like the Phenom 300, there is actually less legroom than there is on the HondaJet. Now, granted, it has more seats on the HondaJet but they are much closer together.
So, what our customers experience is more legroom and a quieter cabin, and lower operating costs because the HondaJet uses less fuel than the other comparable light jets which becomes really important as you talk about sustainability.
One of the things that Volato does is carbon offset all of our flights. How can we do that? Well, the HondaJet is super efficient so the less fuel you use the easier it is to offset.”
Are there any challenges involved with the use of the HondaJet?
“Well sure, there are challenges to every jet because you can sort of say each jet has its pros and cons depending on what you want to use it for. For example, the HondaJet’s range is less than other jets. So, if you’ve got really far missions it may not be an appropriate jet.
Certainly, if you want to put a bunch of people on it, it’s not a great jet because it is small. Those are certainly factors. In general, for what I would say are two-hour, four-passenger flights, those are really easy missions to do in the HondaJet.”
What can Volato customers expect in terms of their geographical accessibility?
“We do not have any geographical restrictions in the continental United States. We’re everywhere within the continental United States on a regular basis. If you were to look at a map of where our planes are right now, it would be everywhere.
We also operate internationally to include Canada, Mexico, the Caribbean, and even a little bit of South America. Just think about it in terms of how far are you really going to go in two hours internationally. That’s sort of the reality of the situation.
Certainly, at any given time, we’re probably doing more flights in the southeast than anywhere else but also that’s the top market for private jets in general and of course, it’s a major population area for the United States.”
Do you operate longer-range flights with stopovers? Let’s say Miami to Los Angeles for instance.
“Absolutely, there are no limitations. It can require, depending upon the mission, one or more fuel stops but if that’s what our passengers want to do, they can certainly do that. One of the things that’s interesting, when you think about commercial airline service, is that generally we’re all trained for good reason that a nonstop is better than a stop. But in the private jet world, fuel stops are not inherently bad.
First of all, they’re pretty nice, you can stop at a fixed base operator (FBO) and stretch your legs. That can be nice, especially with a small jet. You top up and sometimes be in and out in just 30 minutes. You’re not having to deal with the whole boarding process or gate changes or any of those other negative things that we traditionally associate with stopovers.
Sometimes there are interesting places to stop. For instance, some FBOs have local artists or sometimes there’s even a neat place to eat at the airport where you purposely take longer than you need just because you want to refuel yourself.
Fuel stops in the private world are really different from stops in the airline world and it’s worth experiencing them to decide whether or not fuel stops are important to you.”
Can you detail Volato’s new, no-monthly management fee fractional ownership program? Is Volato targeting more occasional flyers with the expansion?
“What will happen now is customers will have the option of choosing between a pricing program that does involve a monthly fee and one that does not. That changes how much it costs when they use the plane and it’s just a different approach.
Generally speaking, people who are more consistent flyers, who are regularly using the service, would probably do better with the monthly fee and people who are more occasional flyers would probably do better without it.
I think there are a number of people who are occasional flyers who can afford private aviation. They’re interested in private aviation, but it bothers them to pay for something when they’re not using it.
This is a program that is more geared for that. It doesn’t restrict them, they can still use it as much or as little as they want, but I think it feels different when you don’t fly and get a bill. So in this case, when you don’t fly you get a check, which feels a lot better I think.”
If fractional owners with Volato opt for the program with the monthly fee, how can revenues earned by their plane when they are not flying help cover those costs?
“If the revenue share exceeds the monthly management fee, then it offsets that. But it may not. Of course, if somebody came up with a new program where there was no monthly management fee and you did not fly then of course we would pay you that month. That’s exactly what we did.”
How does Volato stack up in terms of affordability and efficiency in comparison to premium airline cabins for offerings on two-hour flights?
“I think there is always this desire to somehow compare a first-class airline seat with private jets. It’s a tough comparison because they are very different in pricing. One thing you should think about is, what a seat costs versus having a four-seat plane. You could say okay, well what’s four first-class seats? How does that compare? It’s still not even. It’s still more expensive.
One way to think about is, how much more expensive is a first-class seat on an airliner versus a coach seat? It’s a substantial step up and if you were to think about a similar step up from first class and you were able to move some people, now it’s starting to make more sense. But I also think that still doesn’t really fully think about the value.
One of the things that I think people forget is if you have a coach ticket, economy plus, whatever the name is for the in-between or even the first class. These are different levels of service on the plane. But in order to get on the plane you go through the same security line, you go through the same gate, you have to wait the same amount of time for boarding. Everything is the same. The only difference between a premium airline seat and an economy one is on the plane itself.
There is a lot of time and stress that comes from going through the normal airport system. From parking to security, you don’t necessarily know how the security line is going to go. These days, even if you have a premium service where you get access to a lounge, now there are lounge lines too. There is just a lot of time that goes into it.
I’ll give you a perfect example, I’m in the Jacksonville area and I travel to Atlanta a lot. So for me to drive from my house to the Jacksonville airport is about an hour’s drive and then it’s about an hour’s flight to Atlanta but I’m going to need to get to the airport an hour early to deal with all those extra things.
So, what you’re thinking about there is an hour drive, an hour wait, an hour flight, that’s three hours to get to Atlanta. If I fly private, it’s the local, private airport which is about a 30-minute drive for me and it’s still about an hour flight there so I’ve saved literally about half the time.”
Going forward, do you think Volato’s no-monthly management fee fractional ownership program will represent a shift that attracts more premium commercial flyers to the private aviation industry?
“I do think that there is a group of people who can afford private aviation but still choose not to do it for a variety of reasons and I would like to think this is an opportunity to take away at least one reason not to do it.
So in that sense, maybe it expands the market and at the end of the day, what we are trying to do is offer these program choices to accommodate people and provide the best value for them.
If it does provide greater value than our other program, then we’ve done a great job.”
What do you foresee for the future of Volato and the fractional ownership industry as a whole?
“Our future is more planes, more customers, we’re rapidly expanding and I think that the private jet industry offers a really important utility, that saving of time.
Or, it might not even be time, it might be the ability to get somewhere that is not well-served by commercial aviation. That’s a very common issue as well. You’ve probably seen that airlines have reduced service to certain places and that really changes the difference in terms of value and time in comparison to private aviation. So, I think that’s really important.
I also think the trends for commercial airlines have been heading towards lower and lower cost, more affordability, more seats in the plane, and fewer services, and if that’s what the market wants, that’s what the market should get.
However, I think that as fewer premium options are available and as the service gets more affordable and has less luxury to it, I think there is for people that can afford it and want that extra level of luxury, I think private aviation becomes more appealing.”
Excellent, thank you, Mr. Liotta, for sharing your time and insights with Airways.
Featured image: Volato HondaJet on display. Photo: Volato