Private jet operator Alerion Aviation (Long Beach) will add its first turboprop Beechcraft King Air 350i to a fleet of heavy, super-mid-sized, and mid-sized jets, CCO Richard Ziskind said in an exclusive interview with ch-aviation.

The aircraft management company will operate the new aircraft under Part 135 regulations in the United States. In addition to the incoming aircraft, Alerion operates three GVs, one Legacy 600, one Global 5000, one Gulfstream IVSP, three Gulfstream G200s, one Gulfstream G280, two Citation Sovereigns, one Challenger 300, one Cessna Citation X, and one Learjet 60.

“Managing airplanes is our core competency, and then the offset of that is we utilise the dead time by selling charters on it. Now, there are some companies out there in the industry that may own their own airplanes and float their own airplanes, and their primary aim is to put as much charter on the airplane as possible because they have the risk of ownership. But we keep our model simple,” he explained as he discussed Alerion’s business model.

Charter availability on aircraft managed by Alerion depends significantly on the aircraft owner. “Some owners will use their airplanes 10% to 20%. And the rest of the time we do charters,” the CCO said. However, he pointed out that sometimes owners decide to go with fewer charter flights because doing more means more wear and tear, while others will choose to charter out their planes as much as possible.

“In the charter, you cover all the variable cost, and then the margin is split,” he said, adding that Alerion has created an owner portal so that owners can see the whereabouts of their aircraft at any time as well as access all information related to scheduled flights, costs, fees, flight logs, and maintenance. “We show them how many 135 hours they flew, how many Part 91 hours they flew, and we credit the revenue that we made on the charter against the fixed costs. And then what we do is we offset that revenue cost against their flight charges and fuel.”

Demand from business and private owners

Most of Alerion’s work is for business travel related to meetings off or on-site for executives. Nevertheless, in terms of aircraft owners Ziskind says some 60% to 70% are private individuals while 40% to 30% are corporations.

“Those flying with Alerion are usually selling new products that are taking off in various industries,” he explained. “It's everything from the food business to the car business, to the investment business. A lot of venture capitalists are clients, the tech business is always going to be there. But for us, being on the East Coast, or predominantly on the East Coast, we see more of the financial product oriented, successful businesspeople who need aircraft to move around. So, it’s finance, it's legal,” he added.

The most popular routes operated by Alerion mirror its fleet: they go mostly from the northeastern part of the US to the southeast or southwest. “The anchor of business aviation has always been the Northeast, the Southeast, and West Coast. Now the Midwest is a different market. You know, it's more of a mid-sized light jet market because they can get around on a Learjet or a Hawker, or a Gulfstream G200, say if you're in the oil business and you want to go from Houston to the Permian Basin, or you want to go from Oklahoma to South Dakota,” Ziskind said.

He noted that if you are an international businessman, and if you're on the West Coast and dealing with the entertainment business, you will likely have a heavy jet. “Everybody has heavy jets, because entertainers go all over the world, and that's another business we carry. We carry some entertainment and sports teams, and we've recently started working with some sports figures as private individuals,” he added.

However, Ziskind also sees the Miami market booming and said he hopes to expand Alerion’s reach among medium-sized companies that own aircraft.

“The companies we work with are mostly medium-sized; they're companies that, over time, have bought maybe one or two airplanes. They don't have huge fleets. They're not large corporations that may have three to four airplanes or six airplanes. And those companies are growing because they need the flexibility to travel around and do their business, to move their executives,” he explained. “Most of our companies use a lot of the airplanes to bring customers in to visit their factories and facilities. So if you're a factory or a facility and you're doing business in Europe, and you want to expand your business, you may fly someone in from Europe to spend a couple of days with you, and then bring them home back to Europe.”

A key market remains coast-to-coast travel in the United States but Ziskind says that international flight demand persists. “The key markets, obviously, are always going to be the northeast, to the south, the northeast to the west coast, the West Coast to the East Coast, the West Coast to Hawaii. The summertime, Europe. I've seen Asia kind of go down a little bit, but it's still there,” he said.

Alerion does operate international charters, but Ziskind says that the number of pilots on a certain aircraft will often determine its availability for international travel, particularly because of mandated rest times.

Alerion currently employs 55 pilots. “With pilot salaries going up, the demand for pilots in recruiting, a lot of pilots have chosen to be contractors because they can make a lot of money and control their own schedule and fly when they want to fly,” the CCO stated, adding that he had to tell owners that pilot salaries need to rise in order to retain quality flight crew.

Your competitor is your client

Ziskind explained that most of Alerion’s business comes by word of mouth nowadays, but he added that the company also does aircraft purchase consulting at times, usually with the goal of keeping the aircraft in question for management.

“It's a small part of our business. It's not a huge part, because we work with a lot of industry people,” he said.

“The unique thing about private aviation, unlike the airlines, is that your competitor is also your client,” he pointed out. “And if you think about it, we all need each other in private aviation. Some companies may manage certain types of airplanes, and we may manage other types of airplanes, but maybe we get a lead, whether it be for an airplane that we don't manage - like certain turboprops - and we may say, ‘well, we can recommend this company that we know’, and vice versa. The same happens with insurance brokers, aircraft dealers and everybody in the business on the charter side: guess what? The big operators use our airplanes to charter them when they're short. And if we have a charter, or they have a mechanical, or we have a mechanical, we may go outside our fleet to use one of their airplanes to cover a trip we can't do. And they also do the same thing. So our competitor is our client also, and this is the only business that I know of where it's like that.”