lending practices. However, I see the potential for change in what fractional clients and their team of aviation industry advisers require from fractional share providers, which will likely include providing recurring financial information, operational analysis, and any information that provides an understanding of the ongoing viability of fractional share providers.” So, operators may have to clear higher hurdles in the future before launching their businesses or accessing additional capital to grow. However, where does this put customers unwittingly disadvantaged by these businesses? Is there a need for regulation to protect them and ensure they get what they paid for? On the one hand, Waguespack tells BusinessAIR that some of the customers caught up in the crossfire of these failing companies needed to be more scrupulous. “If the pricing looks too good to be true, it is,” Waguespack says. “It’s unrealistic. It’s not a sustainable model.” After all, Waguespack points out, private aviation is, in fact, a luxury. BUSINESS AS USUAL? Amid the trouble in the market, not all operators share the same grim outlook. At least one is unperturbed and views things as business as usual. Matt Liotta, co-founder and CEO of Volato, the Atlanta-based fractional jet and aircraft management company—which competed fiercely with Jet It—told BusinessAIR the disruption in the private aviation sector actually proves the ecosystem is healthy. “When there’s an excessive amount of demand,” Liotta says,
“new people come in to try and build businesses, and the market works out who’s successful and who fails at giving that new opportunity a try. Sometimes business ideas are great, like ours, and other times, they’re not so great, and the market sorts it out.” More pointedly, Liotta says the failure of Jet It and other companies in the space doesn’t mean the fractional and charter market is skidding but rather indicates a healthy capitalistic market at work. Better yet, Liotta believes it represents more growth for his business, likening it to the banking crisis earlier this year, where high-interest rates caused some regional banks to go under due to missteps on their end, driving their customers to more established banks. But even though Liotta admits demand for private travel has softened and his company isn’t yet profitable because it has positioned itself for growth by reinvesting revenue to gain scale and improve operation, he maintains the thing that sets the firm apart is an investor aligned with its long-term vision. “We have a long-term business plan, and we’ve shared it with our investors,” Liotta says, noting that most are the company’s customers. “And they’ve provided us [with] the capital to execute our business plan.” Aside from that, he remains adamant that what also distinguishes his company is its discipline toward growth. “The first way we’re disciplined is if your typical missions require more than the HondaJet can do,” he says. “We don’t try and sell you a HondaJet that’s not a great fit for you.” Citing one of the errors that Wheels Up made in its pricing model—offering a fixed price on
Jet It initially grounded its airplanes because of safety concerns about the HondaJet, which were later disputed.
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