27 September 2016

Merger of Wijet & Blink is good news for small jet customers

Interesting news today, of the merger between Paris-based Wijet and its UK rival Blink. The move will create a second European air taxi ‘superpower’, with the leading charter fleet of Citation Mustangs in Europe.

The new company will continue to operate under both brands at first, but eventually be consolidated under the Wijet name.

The entry-level ‘air taxi’ is a highly-competitive segment of the private jet market, which has continued to grow share, and outperform bigger jet aircraft, in these cost-conscious times. With a combined fleet of 15 aircraft, the new Wijet will offer greater consistency of service and benefit from operational efficiencies and buying power – for example in pilot training, maintenance and fuel.

This will make them more competitive and able to price themselves attractively against rivals, including the other leading Mustang operator GlobeAir, which has a similar size fleet.

This news demonstrates the enduring success of Cessna’s Citation Mustang aircraft in today’s market. This has been PrivateFly’s most popular charter aircraft in Europe this year, offering a cost-effective and reliable option for 2-4 passengers, for flights of up to two hours.

The Mustang is the first rung on the private jet aircraft ladder – a step up from turboprops, but still much more competitive than medium-sized jets. For example the cost of a one-way charter in a Mustang from London to Paris can be as low as £2,900, versus £5,300+ on an 8-seater Citation XLS or other similar size aircraft.

For more aircraft and pricing trends, see our quarterly Private Jet Charter Trends report.

This is the latest ripple in a merger wave of recent years, in the highly-fragmented aircraft operator market. Before this merger with Wijet, Blink acquired Italian operator MyJet (in May 2015). And in another major industry consolidation last summer, Luxembourg-based Luxaviation joined forces with ExecuJet – taking them to 250 aircraft under management.

Read more: Are industry mergers good for customers?

But the key point with the air taxi business model of Wijet and others, is that all these aircraft are 100% owned by the operator (rather than managed and chartered out on behalf of private owners), so their success is highly dependent on maintaining volume and efficiency.

This creates similarities with an airline business model, where scale, turnaround and utilisation of assets are absolutely essential. This merger will allow the new, larger Wijet to benefit from shared customer bases, and to attract new customers across different European markets, via more competitive pricing.

So this is good news for customers. However it’s ironic, that even with this improved efficiency, tax rules will continue to make Wijet more expensive for some flights than its rivals. If a private jet customer flying on a domestic route uses an operator based outside that country, no VAT is added – effectively incentivising the customer to choose an overseas company. This rule applies in the UK, France and elsewhere in Europe.

So wherever a customer is based, with over 2,500 charter aircraft available in Europe, it pays to compare a range of operators for each flight.

To compare private jet charter pricing on a Mustang or any other aircraft, our expert Flight Team is available 24-hours. Contact us or call +44 1747 642 777.

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