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- [00:00]
Microsoft Representative
Okay, before we get into it, little side note for the IT leaders listening in. I was reading up on a Microsoft Commission survey the other day and learned that teams using Windows 11 Pro PCs report 62% fewer security incidents compared to Windows 10 PCs, including three times fewer firmware attacks. Pretty significant. With security built in, you'll have AI ready it. That sets you up for operational efficiency as well as long term resilience. Upgrade to Windows 11 Pro@Windows means business.com
- [00:34]
IBM Representative
the thing about AI for business, it may not automatically fit the way your business works. At IBM we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [01:03]
The Hartford Representative
IBM when you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, that isn't always easy. Risk can touch multiple parts of an organization at the same time, often in ways that aren't immediately obvious. It might involve property liability or cyber. It could stem from regulatory requirements or challenges tied to a specific industry or the scale of an operation. At that level, managing risk becomes an ongoing discipline, not a one time decision. the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. That means working with companies to identify where they're exposed, decide what matters most, and put practical standards in place so risk is managed as part of day to day operations. And when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting or risk engineering and claims experience developed over time. Learn more@thehartfor.com riskmitigation
- [02:05]
Alan Walsh
Bloomberg Audio Studios Podcasts Radio News.
- [02:10]
Carol Massar
You're listening to Bloomberg Businessweek with Carol Massar and Tim Stanvak on Bloomberg Radio. Our Bloomberg Intelligence team out with a note today. It reminds us that private aviation we know this boomed during the pandemic, yet it could ebb with slowing economies and fuel prices due to the Iran war. It's a trend that could disrupt business plans for charter and fractional operators and prompt some to shrink or exit the market. I'm curious. Valen Walsh can tell us more. He's president of Sentient Jet. It's known for the Jet card. It offers customers a fixed number of hours of private jet travel. He joins us from Quincy, Massachusetts. Alan, welcome. It's good to have you here. I do want to start there with that note that we got from the team earlier today. How, how are higher fuel prices due to the Iran war affecting your business?
- [02:56]
Alan Walsh
First of all, Carl, Tim, thanks for having me, I really appreciate it. Good to see you again. You know, from our side being here for over 25 years and 6700 car owners run our community. It's something from, you know, from our specialists we constantly look at as well. So you know, overall fuel, I'm going to say right now not really having material impact. And you know, are you just passing,
- [03:19]
Carol Massar
are you passing on the additional cost in the form of fuel surcharges?
- [03:24]
Alan Walsh
Exactly. So we look at that on a monthly basis and as I said, for us it's just a straight pass through. It's not something that, you know, we
- [03:31]
Carol Massar
look at, but it's not leading to demand destruction.
- [03:34]
Alan Walsh
It's not, it's not. If I, if I actually look at it, Tim, in April of this year, private aviation flying in North America is actually up 11% year over year and globally 5% year over year. So yeah, not right now, not having an impact.
- [03:48]
Carol Massar
You think it's up because last year during April was the tariff meltdown in the equity market. And I know this is so tied to the equity markets because if people feel, you know, they look at a statement, they feel incredibly wealthy, they say, okay, I could justify, you know, a couple hours on the private jet here rather than flying economy.
- [04:06]
Alan Walsh
Yeah, you know, there's always external factors for sure. That would have been one. I mean obviously what we're seeing right now in the Middle east is another one. And then the knock on impact to commercial flying, you know, tongue in cheek comment is commercial flying right now is probably the best advert for private aviation because it does become that reliable alternative for sure. Whatever thing that we're seeing, you know, people basically people are buying and manipulating their time by using private aviation. So certainly as I said, you know, the cyclical factors right now, this is one. Yeah.
- [04:35]
Tim Stanvak
So who's all flying? You know, remind us about your demographic and kind of if those trends remain consistent.
- [04:43]
Alan Walsh
Yeah, so thanks, Carl. So as I said, we have 6,700 car owners within our community and the demographic ranges right now from obviously personal travel, personal aviation, right down to some corporate travel. And the changes that you mentioned, we're seeing two, I think kind of demographic changes, which is getting younger, certainly into kind of like mid to late 40s. But secondarily the other change that we're seeing as well is multi generational family Trips. You know, I think post Covid what we certainly saw was people doing that revenge travel aspect of it kind of hasn't slowed down in that regard. The experiential part of it is certainly top of mind for folks now. And you know, we see it manifest especially during the seasons, the seasonality and the peak travel seasons through, you know, I said multi generational, bigger, further travel.
- [05:35]
Carol Massar
Can you remind everybody about the relationship that you have with flexjet and you know, the parent company Directional Aviation Capital, like just how that structure works and if you're using each other's aircraft, sure.
- [05:49]
Alan Walsh
Thanks. So yes, we are part of the Directional Aviation family. I will say we very defined swim lanes though that we don't really cross over on. You know, sister company FX Air is very firmly rooted in the charter market, sentient very much in the jet card market where we have our own operator network that if we stringently and rigorously control to our safety program, we probably use about 35% of the available network of operators across the US whereas Flex obviously very much in his own swim lane with its own assets that are fully focused on the fraction of lease business.
- [06:25]
Carol Massar
So you wouldn't, would you ever use Flex's assets?
- [06:29]
Alan Walsh
You know, not necessarily. Because it's.
- [06:31]
Carol Massar
Because those jets are owned by the flexjet customers, right?
- [06:35]
Alan Walsh
That is correct. You know, it's different brands within the global brand.
- [06:40]
Carol Massar
So, so it comes came on my radar last year because Alcadderton, the private equity firm backed by Bernard Arnault, the French billionair there, led an $800 million equity investment in Flexjet. You don't see any of that money. That's a completely separate business.
- [06:55]
Alan Walsh
It is a completely separate business and I think there's a much longer term strategy there with the Flex flexjet business. I should say so. You know, from ascension side, even though we're part of the same family, I think that's firmly rooted in the flexjet space, you know, and we'll see that manifest over the next couple of years.
- [07:12]
Tim Stanvak
Okay, what's the benefit of having them all as directional as investors investing in all these different properties? What's advantage that you get being under this umbrella?
- [07:23]
Alan Walsh
So that's a really good question. So I think from our side, Carol, it's like this, you know, when we come across any type of a prospect into the private aviation world, part of our role is being consultative and you know, entry into that is we'll have that conversation around, you know, what's the problem you're trying to fix, what's the solution? What's the right solution for you. And what we do is work on that solution with you. So in some cases it could be fractional, some cases it's jack card, some cases it could be charter. For us coming together as global brands, what it really allows you is we have the right solution for you. And as your needs over time scale up or scale down, depending on your personal business situations, you can move within the family thread. So it certainly provides the one stop shop that's really advantageous because we know each other's brands pretty intimately and we guide you in the right direction.
- [08:14]
Tim Stanvak
No infighting. You know how that is. You know, wanting to be the favorite child.
- [08:20]
Alan Walsh
Yeah. Healthy coop petition. That's probably the best way to say it. Right. There's always a. Sure, I think there's some, some healthy competition. But ultimately, you know what, it makes us all better because we learn from what each other is doing. But yeah, of course we wouldn't be in it if you weren't somewhat competitive.
- [08:35]
Carol Massar
Alan, it's a, it's a special aviation day for us because a couple hours ago we spoke with George Matson over at Wheels up, the CEO of the company. And I'm breaking like a cardinal rule here. I'm asking you to wa in on a competitor. But you know, it's Wheels up is a publicly traded company and has been for some time and the stock has just gotten hammered and the company has had its share of challenges which have been publicly documented and it's in the midst of a turnaround right now. Just from a strategy perspective, I'm curious about your view. Why, why that strategy hasn't necessarily worked out.
- [09:07]
Alan Walsh
Yeah, that's a great comment. You know, for me, I look at that one, Tim, and I just say the way they run their business is certainly it works for Wheels Up. They're doing what they need to do. I think ours, when we look at it is really coming from very much a position of financial strength across the brands, which is very deliberate. So I think, George, they're working through an airplane, we're working through our plan. And that was just probably.
- [09:38]
Carol Massar
How do you see the value proposition that you offer customers? And to borrow a phrase that you used earlier, like your swim lane versus their swim lane and sort of where they overlap and where they don't overlap because at the end of the day, I think it's fair to say you are going after similar demographic.
- [09:52]
Alan Walsh
We are, we are. I know. You know, our swim lane is really looking at the, the reliability, the consistency, the guaranteed availability. You know, when we look at what we're doing is, is our own dependability. You know, we, we've consistent. We've consistently delivered that for over 25 years. That's why we've got such a high loyalty within our cardholder community. They know what we're going to deliver. We're there for them 24 hours a day from a service standpoint and an experience standpoint. But really what we're giving them is that reliability and the confidence that we're there.
- [10:26]
Carol Massar
We're speaking with Alan Walsh, president of Sentient, joining us from Quincy, Massachusetts.
- [10:31]
Tim Stanvak
Well, you know, it's interesting just going back to, you know, Tim saying, okay, we don't like to ask you about a competitor we just had on. But having said that, you know, they've been doing some capital raises. Is also being part of this larger company that when you do need capital, it's easier to access?
- [10:46]
Alan Walsh
Well, yeah, I mean, if you look at the financial position, I think of the Directional Aviation Group, it's been in a very, very, very strong and healthy financial situation forever. You know, there's never been that time where there's been that type of a constraint. I think if you look at the overall strategy on a car, you know, it's really based on that is what's going to work, what's best, how do we optimize it. But to also take advantage of the confidence of the financial situation. The company is run strategically on that. It's worked on making sure that we hit our financial targets. It's made where exceed our financial targets and never really compromise it in any way.
- [11:26]
Tim Stanvak
One thing I'm curious about and just talking with our George Ferguson who covers all the majors and the aerospace sector overall. And it's a story we've talked about. Alan, I feel like over the last couple of years a shortage of pilots. Can you guys get all the pilots that you need?
- [11:43]
Alan Walsh
Yes. I mean, if when I look at again, so the way we work in this car is we have an operator network that we do business with, you know, the pilot, you know, we have, I suppose, contracts with them. They will actually go and source all of the pilots. It's not been a challenge. I mean, certainly we have people that move back and forth between the airlines for sure. But right now I'm going to say, you know, it's not a major challenge. The operators and the contracts and relationships that we have give us what we need in terms of availability. It hasn't come up as a concern.
- [12:14]
Carol Massar
Alan, back to the relationship with, with your, your sister company Flex. If we Think about their swim lane. Would that would. Would somebody like Sentient Jet would be like an entry level or like, you know, gateway drug to private aviation, for lack of a better term. And then once, once they're hooked on it, maybe they. And maybe they get. Maybe they make more money, maybe they have a big exit. Then would they move to Flex? Because that would actually include fractional ownership and that's actually more expensive product.
- [12:46]
Alan Walsh
You know, it's a great question and I suppose help explain the swim lane a bit more. You know, we look at it and certainly people's needs do change, Tim, for sure, over time, where they can scale up and they can scale down. But if you look at it in terms of the hours that you would typically use in a year, you know, the jet card fits right in that swim lane of somebody that's flying between 25 and 75 hours per year. If you scale up beyond that and your needs change and you're in, you know, 100 hours plus a year, depending on what your personal needs are, then fraction is the right. Certainly is the right fit for you in that regard because, you know, it's going to give you the economies of scale there for sure. So, you know, again, I go back to us being the consultative mode is if we see somebody that's graduating into that swim lane. Yeah. By all means, we make sure that we broker and bridge the relationship so that they can scale.
- [13:34]
Tim Stanvak
All right. You mentioned that your demographics getting younger, mid to late 40s. Just tell me, has Tim taken a ride on your plane?
- [13:41]
Carol Massar
A highly confidential segment, just between us. That's part of between us.
- [13:46]
Tim Stanvak
Hey, Alan, good to catch up, as always. Be well, Alan Walsh. You bet. Take care. Alan Walsh, who's president of Sentient Jet, joining us from Boston on this Thursday.