The private aviation industry has been on one wild ride since COVID. During the height of the pandemic, private jets topped everyone’s list. Since 2023, however, the industry has changed. In an interview with Crain Currency Editor Kristen Oliveri, Andrew Collins, co-CEO of Flexjet, Sentient Jet's parent company, discusses the way forward for private aviation, opportunities that this new landscape presents and how sustainability fits into the conversation.
What is the state of private aviation today?
Flying private became more popular over 2020-22. During the pandemic, jet cards offered a solution for safe and private travel, appealing to many travelers who may have been considering flying private. In the midst of the “bleisure” and digital-nomad trends, we saw customers traveling more and as they pleased, making the jet card an ideal solution.
In 2023, the industry is drastically and quickly changing. After two years of a surge in demand and a historic influx of first-time flyers, it was only a matter of time for the demand to peak and return to pre-COVID levels. While the industry has seen a leveling off in sales and volume, we also believe it's incredibly promising and brimming with potential. When faced with the increased popularity, Sentient Jet thoughtfully chose a path that reduced growth but improved profitability.
Tell us about the digital transformation that Sentient Jet has gone through.
We first launched our mobile app in 2016, allowing cardholders to book flights on demand. With all industries becoming more digitally accessible, we also saw an opportunity to differentiate and launched our newest innovation: automated text-to-book. A first for the industry, this allows card owners to get quotes and book travel to and from anywhere in the world via text, working directly with our complex proprietary system. With user-authenticated, automated, AI-like interaction, users can quote and book a flight in less than 60 seconds.
How does sustainability factor into how you operate?
Our carbon-offset program goes beyond traditional programs by offsetting all aviation emissions — including water vapor, aerosols and nitrous oxide, which together account for two-thirds of the emissions an aircraft produces while flying.
Sentient Jet funds all offsets itself. Our sustainability program offsets 300% of the flight emissions on each and every customer flight at zero cost to the card owner. We have spent time reviewing our flight volumes, shared impact in the skies and various options to help continue driving this initiative forward. Our multimillion-dollar annual investment demonstrates our strong commitment to sustainability and continues to set a new industry standard. We hope to lay the groundwork for other private aviation companies to implement their own sustainability measures.
Also, as of this past spring, all Sentient Jet card owners are able to track their carbon footprint and emission-offset records via their post-flight invoices [available on Sentient Jet’s Card Owner Desktop Site and through the Sentient Jet Mobile App]. Another first for the industry, we use our own software to calculate each individual’s offsets and share it with them at no additional cost.
While sustainability is a challenging topic when it comes to the private aviation industry, we are proud to be leading the way with our investment and partnership with environmental leader 4AIR, the first and only rating system focused on comprehensive sustainability in private aviation.
You partner with other well-known brands and events to provide exclusive experiences for your clients. Can you share a few examples of that?
We offer an unparalleled safety program as well as exclusive partner benefits for our jet card owners, including access to first-class destinations and residence clubs, one-of-a-kind experiences, premium retailers and more. We recently announced our 10th annual Exclusive Benefits Guide, including offers from a wide range of partners across hospitality, food and wine, technology, retail and many more. These offers provide jet card owners with approximately $184,000 in total value.
We align with brands that we have long-standing relationships with and reciprocate our mission of providing jet card owners with a more thoughtful way to fly. Under service, we have exclusive offers from Flexjet Helicopters; Exclusive Resorts; the Eden Club; The Little Nell and PS, aka Private Suite; to name a few. For safety, we have partnered with REVA, the largest dedicated fixed-wing jet air ambulance company in the Americas, which provides medical assistance via air ambulances and seaplanes and a travel protection program with insurance benefits. Lastly, our sustainability partner, 4Air, also provides an option for clients to become a beyond-neutral and climate champion.
How do you plan to continue to innovate in the private aviation sector?
We believe people deserve a better way to book and fly private and have developed a premium yet practical flying experience to be more accessible to the public. Most recently, we added a coast-to-coast guaranteed program for Super-Mid flying, along with a unique summer offering to fly trans-Atlantic. We'll look to have quarterly offerings that layer on top of the product while we continue to work toward perfecting our clients’ digital experience as well as our creative thinking with sustainability.
MORE INSIGHTS: Understanding greenwashing and why it matters
By PETER KRULL
Creating a legacy for your children, grandchildren and generations to come takes lots of foresight and planning. It also means investing in companies that are working toward a sustainable future. Unfortunately, because ESG investing has become a buzzword, greenwashing has become more prevalent.
Investopedia defines greenwashing as “making an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly or have a greater positive environmental impact than they actually do.”
Morningstar categorizes 627 mutual funds or exchange-traded funds as being ESG (environmental, social and governance) or sustainably focused. That’s a lot of funds with a lot of different and diverging definitions of what sustainable, responsible and impact investing (SRI) means.
And while I truly believe in diversity of opinion, I still have a hard time understanding how some managers can include companies such as ExxonMobil or McDonald’s in their SRI portfolios.
Regardless of your beliefs or what types of companies you’re interested in investing in, it’s critical to do your research to avoid greenwashing. A term from my high school Latin class is appropriate here: ‘caveat emptor’ — or buyer beware.
DEFINING ESG AND SRI
First, it's important to understand the difference between ESG investing and sustainable investing, because both investment managers and the media often equate the two.
ESG is simply a set of metrics quantifying the environmental, social and governance risks within a company. Many investment managers then use that data to adjust allocations of traditional indexes, thereby reducing a portfolio's “ESG risk.”
Sustainable investing is more intentional. The investment process analyzes which sectors, industries and companies are and will be leaders in a new, cleaner and more sustainable economy. Which technologies will make society healthier and more resilient? How can we reduce emissions and transition to renewable energy while at the same time keeping in mind the importance of equity issues?
Sustainable investing represents a step beyond ESG investing by being solutions-based and focusing on innovation. At the end of the day, I would define the practice as true growth investing.
The example I typically use to delineate the two types of investing is this: An ESG portfolio that reduces its exposure to ExxonMobil is “less bad.” A portfolio that eliminates the company entirely is better. But a portfolio that replaces ExxonMobil with First Solar is truly sustainable.
Most of the 627 ESG funds listed by Morningstar are likely “less bad” and a function of investment managers' focus on indexing. The easiest way to integrate ESG metrics into a portfolio is simply layering them onto an existing index. It’s also cheaper.
But as with most things, cheaper isn’t always better. It takes effort to create a portfolio from scratch; to understand issues such as climate change, resource scarcity and equity; and to find innovative companies leading us into the new economy.
In my experience, responsible investors want solutions-based portfolios, not “less bad” ESG indexes. And large fund managers are, at their core, institutional investors, and they invest for individual investors in the same way that they would invest for themselves.
The solution for individual investors is multifold. Before selecting a fund manager, ask a lot of questions, including how much experience the manager has in responsible investing. Does this person understand the differences between ESG and sustainable investing? What types of companies and industries is the manager investing in? And how does the manager plan to avoid the “less bad” portfolios?
If you already have a fund manager or family office, make sure the manager understands your goals. Create a family mission or motto to ensure that your investments are aligned with what you’re looking to achieve. Make sure to have regular meetings to ensure you are in sync and your team is adjusting your investments accordingly based on new developments and changes in technology and information available.
Ensure you also have conversations with your family so they understand your goals and the importance of avoiding greenwashed funds.
Consider separately managed accounts (SMAs) instead of mutual funds or ETFs. SMAs own individual securities in your account and make it much easier for the investment manager to focus on solutions instead of indexes.
Finally, don’t be afraid to switch to an adviser who is an expert in sustainable investing. Because responsible investing isn’t one-size-fits-all, an expert can understand which values are important to you and guide you through the greenwashing maze.
An expert also will help you navigate the negative political rhetoric that currently plagues ESG so you can be comfortable with your decision. Remember that ESG is simply a set of numbers. It’s risk metrics. And when used well, it can help you create a sustainable portfolio that can have a positive impact on the world, and your family, for generations to come.