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Some airport terminals are learning from the luxury-hotel business

Some airport terminals are learning from the luxury-hotel business

THE private-jet industry advertises itself as the height of luxury for the rich. But travelling through the ramshackle, ugly buildings it used to use as terminals was rather like going commercial. No longer. At one of Dubai’s newest facilities for private jets—built by Jetex, a fast-growing chain—passengers strum guitars on hammock-shaped sofas around a coffee table dressed up as a campfire, before being whisked away to their planes in limousines. Others amuse themselves playing table football or having elaborate spa treatments.

It is unsurprising that such a facility has emerged in Dubai. But the boom in luxurious terminals that look more like playpens for adults than somewhere to fly from is spreading. Jetex has opened 39 of them in more than 20 countries since 2005. Adel Mardini, the firm’s boss, is clear about how he wants to disrupt the industry. He says he wants airport facilities to feel “like a five-star hotel”.

Often little more than a Portakabin filled with stained sofas, private-jet terminals—or “fixed-base operators” (FBOs) in industry jargon—used to be grim affairs, mostly run by individual, family-run firms. They competed on price rather than quality, losing money on their facilities in return for steep mark-ups on jet fuel, notes Adam Twidell of PrivateFly, a booking service. But the financial crisis blew up this model. Businesspeople used to account for over 80% of the FBOs’ trade and were generally in too much of a hurry to note the tattiness. But now they use private jets much less, and wealthy individuals have taken up the slack.

They have the time and the money to be pampered at airports with all the services a smart hotel can provide, says Mr Mardini. Terminals must compete as much on service as cost. That gives branded chains of luxury facilities an edge over the mom-and-pop outfits of old, which are being swept away by consolidation. Over the past 15 years the number of independent operators has fallen by a third in America.

Mr Mardini also wants to imitate the hospitality business in other ways. He plans to franchise out the Jetex brand, just as hotel groups do. Independent FBO operators, meanwhile, are preparing to resist the new global chains such as Jetex and Signature by pooling their marketing budgets and loyalty schemes.

Luxury brands that currently have little to do with aviation are muscling in. Harrods, a department store, has opened FBOs under its own brand at Luton and Stansted airports in Britain, and wants to franchise out its name. Hotel chains, too, see FBOs as their natural habitat. The first Hilton-branded hotel in an FBO opened last summer on the idyllic St Simons Island in the state of Georgia. Three chains—Peninsula, Aman and Four Seasons—operate their own private jets and are considering moving into ground facilities. The luxury-FBO upstarts could be disrupted by the very firms they are seeking to emulate.

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