Driving a Deeper Change in Aviation

0:00When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation.

0:34Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. not noise proof of how we can help companies get smarter by putting ai where it actually pays off deep in the work that moves the business let's create smarter business ibm certified plant genius here most people see a busy plant shop but i see a perfectly balanced ecosystem thanks to genius from global payments inventory tracked payments seamless reviews in one place absolutely genius.

1:25From sold-out crowds worldwide to running the shop, genius grows with you. Your Monserra's potted? Healthy roots, strong growth, just like this shop. Big League reliability for your business. That's genius. Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek 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 higher 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.

2:13I'm curious if Alan 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 are higher fuel prices due to the Iran war affecting your business? First of all, Carl, Tim, thanks for having me. I really appreciate it. Good to see you again. From our side, being here for over 25 years and 6 ,700 card owners in 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 are you passing on the additional cost in the form of fuel surcharges exactly so we look at that on a monthly basis and as i said for us it's just a straight pass through uh it's not something that you know we look at but it's not leading to demand destruction it's not it's not if i if i actually look at him in April of this year, private aviation flying in North America is actually up 11 % year over year and globally 5 % year over year.

3:23So yeah, not right now, not having an impact. 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? Yeah, you know, there's all those 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 with everything that we're seeing.

4:03You know, people basically people are buying and manipulating their time by using private aviation. So certainly as I said, you know, there's cyclical factors right now. This is one. Yeah. So who's all flying? You know, remind us about your demographic and kind of if those trends remain consistent. Yeah. So thanks, Carl. So as I said, we have 6 ,700 card 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.

4:44But 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, one day generation, bigger, further travel. Can you remind everybody about the relationship that you have with FlexJet and, you know, the parent company Directional Aviation Capital, like how that structure works and if you're using each other's aircraft?

5:26Sure. Thanks. So, yes, we are part of the directional aviation family. I will say we very define 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 we stringently and rigorously control to our safety program. We probably use about 35 percent of the available network of operators across the U.S., whereas Flex, obviously. very much in his own swim lane with its own assets that are fully focused on the fraction and lease business. So you wouldn't, would you ever use Flex's assets?

6:06You know, not necessarily. Because those jets are owned by the FlexJet customers, right? That is correct. As I said, you know, it's different brands within the global brand. So it came on my radar last year because Alcaterton, the private equity firm backed by Bernard Arnault, the French billionaire, led an$800 million equity investment in Flexjet. You don't see any of that money. That's a completely separate business. It is a completely separate business. And I think there's a much longer term strategy there with the 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.

6:47You know, and we see that manifest over the next couple of years. okay what's the benefit of having them all you know as invest you know as directional as investors investing in all these different properties what's the advantage that you get and being under this umbrella so that's a really good question so i think from our side carl it's like this you know when we come across a 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'll do is work on that solution with you.

7:23So in some cases, it could be fractional. Some cases, it's check cards. 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 personnel, business situations, you can move within the family thread. So it certainly provides the one-stop shop. That's really advantageous because, you know, We know each other's brands pretty intimately, and we guide you in the right direction. No infighting? You know how that is. You know, wanting to be the favorite child.

7:58Yeah, healthy competition. That's probably the best way to say it, right? There's always a, sure, I think there's 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 enough if we were somewhat competitive. version. Alan, it's a special aviation day for us because a couple hours ago, we spoke with George Mattson over at Wheels Up, the CEO of the company. And I'm breaking like a cardinal rule here. I'm asking you to weigh in on a competitor. But, you know, Wheels Up is a publicly traded company and has been for some time.

8:28And 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 yeah that's a great comment um you know for me i'd look at that one tim and i just say the way the way they're one of their businesses is certainly you know it's it's it works for wheels up you know they're doing what they need to do i think ours when we when we look at it is really coming from very much a position of financial strength across the brands which is which is very deliberate um so you know i think george they're working through their plan we're working through our plan uh i know and that was just probably the way it is well how do you see that how do you see sort of the 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.

9:30We are. We are. I know, you know, our swim lane is really looking at the reliability, the consistency, the guaranteed availability. You know, when we look at what we're doing is our own dependability. You know, we've consistently delivered that for over 25 years. That's why we've got such a high loyalty, you know, 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. We're speaking with Alan Walsh, president of Sentient Jet, joining us from Quincy, Massachusetts.

10:09Well, you know, it's interesting just going back to, you know, Tim saying, OK, 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. 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 it, Carl, you know, it's really based on that is what's going to work, what's best, how do we optimize it, but also take advantage of, you know, the confidence of the financial situation.

10:53the company is is run strategically on that it's worked on making sure that we hit our financial targets it made people that we're exceed our financial targets and never really compromise it in any way one thing i'm curious about and just talking with our george ferguson who covers all the majors and um and the aerospace uh sector overall and it's a story we've talked about um alan i feel like over the last couple years a shortage of pilots can you guys get all the pilots that you need? Yes. I mean, if when I look at again, so the way we work in this car, 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.

11:35It'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 the contracts and relationships that we have give us what we need in terms of availability it hasn't come up as a concern uh 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 a entry level or like a you know gateway drug to private aviation for lack of a better term and then once once they're hooked on it, 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 a more expensive product?

12:24It's a great question and help explain the swim lane a bit more. We look at it and certainly people's needs do change 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 to graduating into that swim lane, yeah, by all means, we'll make sure that we broker and bridge the relationship so that they can scale.

13:12All right. You mentioned that your demographic's getting younger, mid to late 40s. Just tell me, has Tim taken a ride on your plane? Hey, highly confidential segment. It's just between us. That's part of it. It's just between us. Hey, Alan, good to catch up as always. Be well. Alan Walsh. You bet. Take care. Alan Walsh, who's president of Senti and Jed, joining us from Boston on this Thursday.

13:36If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions.

14:14Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n dot com. Dog grooming genius here. Most people see a busy dog salon, but I see operational excellence. Thanks to Genius from Global Payments. Scheduling? Personalized. Checkouts? Instant. Absolutely genius. From game day crowds to every groomer in this shop, Genius keeps everything flowing seamlessly.

14:59Schnauzer is styled. Flawless execution. Big League reliability for any business. That's genius. From coast to coast, unlock adventure at Red Lion Hotels by Sinesta, where restful sleep, friendly service, and trusted local knowledge are part of every stay. Red Lion makes it easy to feel welcomed, comfortable, and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip. When you sign up for Sinesta Travel Pass, you'll get their best rates instantly. Go to Sinesta.com to book your stay and unlock the best rates with Sinesta Travel Pass.

15:36Here today, roam tomorrow. Join now at Sinesta.com. Terms and conditions apply.