Trans-Exec (Santa Monica) will remain committed to its current business model of operating owned long-range Gulfstream Aerospace jets and is currently transitioning from its remaining GIVs and expanding the fleet of G550s, founder and chief executive David Bilson told ch-aviation in an exclusive interview during NBAA-BACE in Las Vegas.

"I don't ever want to have more than ten airplanes. I realised a long time ago, looking at other companies, that we were not in the transportation business. We're in the experience business. Customer experience is so important to us that if I had more than ten airplanes, I couldn't do what I do right now. I can tell you every airplane that's in the air, who's on board. I could probably tell you what they're eating. And if I get big and had to have middle managers and all this, I'd be too many steps away from my product. So that's the place we want to be, not to mention - and I say this with no greed - it's also probably the most profitable place to be," he outlined.

The operator is focused on long-range charters, mainly from or to the Los Angeles region, and sees a lot of growth in this segment. Bilson highlighted that the amount of work necessary to arrange a charter is roughly the same for a one-hour flight as for long-haul, but the latter would be much more profitable.

Fleet focus on G550s

The California-based charter specialist has evolved to its current, narrowly defined business model over the course of its growth since 1979. Bilson explained that it started as an aircraft management and charter company for a wealthy individual with a single IAI Westwind in 1979, but bought the aircraft in the early 1980s when the customer did not want to own it anymore. Over time, Trans-Exec migrated to Gulfstreams, driven by their very high dispatch reliability. This factor was crucial due to the operator's strategy of owning its aircraft.

"For me, wanting to own the entire fleet rather than just manage airplanes, I needed reliability. I couldn't afford to have them go down on these trips," he said.

Trans-Exec's current fleet comprises one GIV, two GIV-SPs, three GVs, and two G550s, all operated under the Part 135 certificate. It is in talks about buying another G550.

"I am actively working on getting out of the GIV market," Bilson added. He emphasised that the GIV is a perfect type in terms of its range and cabin features, and is still often requested by customers. But as the aircraft age they will eventually have to be replaced with G550s. Bilson expects that the GIVs will exit the fleet within the next three years. He added that while the newer types, such as the G700, are great aircraft, there is a very small number of flights that require their improved performance.

"Our average passenger load is 3.5. So already the 14-passenger G550 is, in some sense, overkill. The G700 is huge overkill for most missions. Eventually, of course, as our G550s age out, we're going to be going into that sort of aircraft. But there's no reason for us to jump into it now, because we're driven by what our customers' needs are, and we don't have customers that want that aircraft," he outlined.

Ownership strategy

The company is strategically focused on owning its aircraft. This allows it to prioritise the charter customers' interests.

"Right now, I think we're the largest owner-operator of independent charter-available Gulfstreams worldwide, and it's great because I'm only beholden to my clients. There is no "owner", because I own the aircraft," Bilson stressed.

Aircraft management companies have to balance the interests of owners and charter customers, and the latter have to contend with limited availability. In contrast, Trans-Exec independently manages the availability of its aircraft and, as a result, has never had to charter an off-fleet aircraft to meet demand. Such an approach builds loyalty with customers, and currently, nearly all charters sold by the operator are directly to repeat customers. While Bilson conceded that it is not easy to make this business model work, it is possible for a company with impeccable safety record and customer service.

He disclosed that Trans-Exec is approached frequently by customers with management requests but is not strategically looking for Part 91 expansion. It could consider doing so only if the transaction would build a mutually beneficial relationship with an owner. However, Bilson draws a line at aircraft from any other OEM than Gulfstream.

"That would be too much of a distraction," he said.

Charter market situation

Trans-Exec bases all of its aircraft out of Van Nuys and remains focused on the California market. Around 80% of all charters touch the local market, and Bilson sees no need to expand with more bases.

"When I've gotten to the point that I've run out of people that can charter my aeroplanes in California, I would expand outside of it. But at the moment we're still at the tip of the iceberg. There are more than enough clients to support the amount of aircraft in hours that I want to fly. So I there's no reason to complicate life and go out," he explained.

Although Trans-Exec has a "remote base" in the Washington, DC, region, California remains core to its business. Concentration on a single base allows it to focus on high-quality services, such as catering and ground handling. Multiplying bases would bring challenges related to ensuring the same level of service.

From the operator's perspective, the current charter demand is holding up well. While international charters are under pressure, it is a matter of demand moving geographically rather than disappearing. Bilson opined that the oft-cited data about current declines are misleading, as they compare the current demand to the Covid bump. He added that, in contrast to other operators, Trans-Exec did not expand during the pandemic - even though it meant rejecting many charter requests at that time - knowing that the spike in demand was temporary.

"I believe that with all these operators getting very busy, the quality and the availability went down to where customers were just happy to get a plane rather than get the quality that charter is supposed to be about," Bilson said. "Now that the market has slowed down a little bit, it has brought back more focus on our product. Customers are really appreciating what we do now more than I've ever seen in our 45-year history."

To retain its guaranteed aircraft availability, Trans-Exec aims to always have a part of its fleet on the ground. Bilson quipped that while having no aircraft flying would lead to the company going out of business, having all of them flying is also bad as it means zero availability at that time. The operator's strategy is to limit the number of monthly hours to no more than 45 hours per aircraft to focus on the most profitable charters rather than chase any flying, which could potentially harm the margins.