FEBRUARY 3, 2015
When it comes to riding Silicon Valley's soaring tech boom, the sky's not the limit -- it's simply the next rung in the ladder. In another byproduct of the digital Gilded Age that has turned the Bay Area into one big startup-tropolis, the tech community is undergoing a remarkable altitudinal adjustment. Whether it's Intel using its fleet of corporate jets to essentially run a private regional airline, or the retired Apple big shot getting his pilot's license so he can zip back from his San Luis Obispo home to have lunch in Cupertino, or the San Francisco twenty-something learning to fly because it's a "beautiful hobby" that lets him "defy physics," the region's tech warriors are spreading their wings.
"I'm seeing more and more young people who've made money from tech startups and are now buying planes," said Walt Gyger, owner of the Trade Winds Aviation flight school at Reid-Hillview Airport in San Jose. "Back in 2008, people were holding off on spending on a dream like flying, but that money is coming back now."
Big tech companies are using private jets to shuttle their CEOs between meetings in Santa Barbara, Seattle and Denver, sometimes in a single day, and the IPO-endowed are using their stock-option windfalls to buy fractional shares in NetJets planes. Vickie Buonocore, publisher of San Mateo-based In Flight USA, has noticed an increased interest in private aircraft, especially among companies "looking for ways to quickly get their executives around the country and the world. Private planes let you go where you want and when you want, without security hassles or waiting in long lines."
And with the worsening congestion on Bay Area roads, flight student Tom Munka said it's only a matter of time before he and his fellow pilots will be "aero-commuting" around the region. Munka, a 23-year-old San Franciscan working for a telecom company and learning to fly at Sterling Flight Training Center in Concord, said he hopes to buy a plane after he gets his license and use it initially for leisure but eventually for business.
"If it becomes cost-effective to travel around by plane, then I might do that," said Munka, as he pursues his "beautiful hobby." He said "with the traffic becoming so congested, it can take one hour to drive across San Jose. In L.A., we're starting to see more and more people aero-commuting, with the airport parking lots full by 7 a.m., and I can see this as a reality for more and more people in the Bay Area, too."
The flexibility and speed of private aviation have been shown to help boost the bottom line, an important point given the competitive pressure cooker Silicon Valley is these days. One industry survey showed that companies using private aviation enjoyed an 11 percent higher market-cap growth than those that didn't use it and that they also generated more income due to productivity.
Access to smaller airports is a big part of that efficiency. According to the General Aviation Manufacturing Association, business aviation serves 10 times the number of U.S. airports (more than 5,000) than are served by commercial airlines, which total about 500. So it's no surprise, as Buonocore points out, that "there are more and more corporate people who want to rent aircraft. And you have aircraft operators standing by, waiting for their phone calls, just like a taxi service."
While business aviation may not necessarily be experiencing a dramatic boom, some industry data indicate a strong and steady increase in activity year over year ever since the market hit bottom in 2008. U.S. sales of piston engine airplanes and business jets jumped nearly 10 percent from 2013 to 2014, while overall airplane shipments rose nearly 6 percent, according to GAMA, with more growth expected in 2015.
Jim Lafferty of Lafferty Aircraft Sales, based at Mineta San Jose International Airport, sees the impact of those sales figures each day. With planes coming and going nonstop, and work proceeding at the airport on a huge new facility co-owned by Google, the scene is what you'd expect to see in the middle of an economic renaissance. "There are hangars full of airplanes everywhere you look, some based in San Jose, others in places like Monterey and Stockton, that are constantly flying in to pick up or drop off businesspeople," said Lafferty. "There's a lot going on -- it's crazy out here."
Large-scale operations like Intel's -- whose fleet of private aircraft shuttles employees daily between corporate outposts in California, Oregon and Arizona -- are the exception, and GAMA studies show that smaller companies operate the majority of business aircraft, with 59 percent of firms operating business aircraft having fewer than 500 employees. But just below the Intels of the aviation world rests a long string of options, descending in price and offering a custom-fit flight experience for each substratum of the tech world's peripatetic.
There are private planes for hire, like the ones from JetSuite, that have become go-to travel choices for the Valley's rich and powerful. With state-of-the-art avionics, a board of directors that includes Zappos wunderkind Tony Hsieh, and onboard Wi-Fi and XM Radio, these aircraft provide a just-in-time experience that's seemingly cut from the Silicon Valley cloth. It's not cheap: one recent "Daily Deal" offered a private four-seater jet, one-way from San Jose to Oakland, for $536.43.
A less expensive option is an "all-you-can-fly" airline like Surf Air, a startup that offers a monthly membership for $1,750 (with a $1,000 sign-up fee) that lets members hop on daily scheduled flights up and down the state, pretty much to their heart's content. "A lot of our members could afford something like NetJets but would rather invest that money in something else," said Justin Hart, vice president of member acquisition for Santa Monica-based Surf. "The new commodity is time. You have your typical executive in the Bay Area, who's making $400,000 a year but chooses not to buy his own plane. But he needs to get to a meeting in L.A. and he knows his company values his time, so he can't afford to wait in line for 90 minutes at LAX, dreading what awaits him at SFO."
Marcus Lovingood, a 29-year-old movie distributor and owner of a digital ad agency in L.A., uses Surf to fly up to the San Carlos Airport for business three or four times a week. He figures he's saved his eight-employee company, Futureleap Media, $30,000 since he first joined Surf Air a year and a half ago. "We were spending $2,000 to $3,000 a month for travel in California, with me taking Southwest flights three times a week and using up a lot of my valuable time," said Lovingood. "Surf Air just made so much sense."
Other entrepreneurs are learning to fly, either for fun or for business once their startups get off the ground. "We've been seeing an uptick this past year in the number of people learning to fly, and a lot of them are from the tech community," said Bert Postma, a pilot and member of the Stanford Flying Club. "This area is much better off than other parts of the country, so a lot of people here can afford to get into general aviation." Postma said students have included "young people from Google and Stanford," as well as a recently retired senior executive at Apple, and techies who fly to work from as far away as Oregon. And many of them," he said, "end up buying their own planes."
Bill Sutherland, director of marketing operations for Apple, said friends got him interested in flying in 2009, and when an in-law told him about how he used his plane for his own business, "that flipped my switch. "Someone said it might make sense to buy my own plane for my training, so I got a used Cessna 172 for like $118,000," said Sutherland, who knows at least six fellow Apple employees who fly. He has since upgraded a couple of times, using his plane to visit family across the country. Sutherland said he kept one of his old planes and rents it out, but he sold his Cessna 206 "to another Apple guy, so it's staying in the Apple family."
Source: Mercury News online, by Patrick May (email@example.com).