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JetSuite to Add Scheduled Service at JWA

JetSuite Inc. in Irvine plans to boost its John Wayne Airport traffic to about 100,000 passengers a year, a move backed in part by last week’s investment from JetBlue Airways Corp.

JetSuite is a charter carrier that currently flies 2,100 passengers annually on 1,300 takeoffs and landings from JWA.

The 100,000 additional passengers on about 4,200 flights in and out of the airport next year will come via JetSuiteX, which JetSuite Inc. formed this year as a scheduled carrier.

The capacity—officially 96,180 seats—was approved last week by the Orange County Board of Supervisors as part of JWA’s 2017 allocations for all airlines.

The JetSuiteX total is 2.3% of Southwest Airlines’ 2015 passenger count of about 4.2 million, the largest for any carrier at JWA. But it’s 50 times more than JetSuite Inc.’s charter focus and more than twice as large as the 42,500 seats the airport allocated for its other scheduled commuter airline, St. George, Utah-based Skywest Airlines Inc.

A commuter airline at John Wayne is one that flies scheduled flights on aircraft of up to 70 seats.

JetSuiteX plans to average a half-dozen departures a day from John Wayne on 30-seat aircraft. JetSuite Inc. has flown mainly four- and seven-seat jets for its charters.

JetSuiteX in April began flying from Hollywood Burbank Airport to Silicon Valley and Las Vegas.

It added a daily flight from Carlsbad to San Jose in October as a “toe in the water,” said JetSuite Inc. Chief Executive Alex Wilcox.

He said JetSuiteX aims for “any short-haul market” of under 500 miles and that the company is eyeing Las Vegas and Northern California for John Wayne flights.

“JetSuiteX was created to solve a problem,” he said. “On these flights you spend more time at the airport than you do in the air.”

Short-haul flights should take less time than driving, he said.

“If you’re flying to Tokyo or Europe, who cares about two hours? But if you’re going to lunch in San Jose, two hours is a problem.”

Suite Life

Wilcox co-founded JetSuite Inc. in 2006 with Keith Rabin and Brian Coulter and it began flying in 2009.

It employs about 100 at its offices across MacArthur Boulevard from the airport, and a similar number of charter pilots flying about 20,000 hours a year.

Clients pay $3,000 to $6,000 per hour to charter one of the company’s 21 jets—13 four-passenger models and eight that seat up to seven people.

The new scheduled flights take the company deeper into a different business model: JetSuiteX will sell on a per-seat basis at prices between $129 and $350.

Wilson expects the 30-seat planes—a fleet of reconditioned Embraer 135s—to average 22 passengers a flight in the first year of service, which works out to about 70% capacity.

He also has used the larger jets for charters.

JetSuite Inc. will hit about $70 million in revenue this year, the Business Journal estimates.

Future Flights

JetSuiteX is running at a rate of 137,000 passengers a year in Burbank.

JetBlue’s investment—announced the same day as the larger carrier’s quarterly report and OC supervisor’s approval for the seat allocation—is expected to expand the service to more airports.

“We see a great opportunity on the West Coast,” said JetBlue president and Chief Executive Robin Hayes on a conference call. “The model has plenty of potential to grow.”

JetBlue is known to stake out positions uncommon for airlines.

It built a 196-room boutique hotel in Orlando for employees and is co-developing a public 505-room hotel adjacent to its terminal at John F. Kennedy International Airport.

It also runs a venture capital arm in Redwood City, Calif., to invest in travel technology firms.

“We’re very active in thinking about how [the aviation] industry can change,” Hayes said.

Relationship

JetSuite Inc.’s Wilcox and Coulter were executives at JetBlue.

JetBlue’s founder, David Neeleman, is on JetSuite’s board.

“I have friends there,” Wilcox said of his JetBlue ties. “The chemistry and timing was right.”

Early investors in JetSuite Inc. include Zappos.com founder Tony Hsieh and Neeleman.

JetSuite Inc.’s co-founders have retained stakes that add up to the majority of the company.

JetBlue took a stake small enough that it didn’t have to disclose the value of it as significant relative to its size—it’s the fifth largest U.S. airline by passenger count, with 35 million passengers last year. It had $6.4 billion in revenue last year and a recent market cap of $5.6 billion.

JetSuite Inc. hired Goldman Sachs to seek funding and considered other options before flying JetBlue, Wilcox said.

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