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Originally published Tuesday, March 4, 2014 at 11:38 AM

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New private-jet airline aims for “budget-luxury’ passengers

Europe’s Wijet offers hourly rentals of private jets and is undercutting rivals (although for a still hefty $3,000 an hour).

The New York Times

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PARIS — Alexandre Azoulay would like to tell you something about the rich today: They are not so different from you and me.

The wealthy clients ferried around Europe on Azoulay’s private-jet airline, Wijet, are more likely to request a Starbucks on board than a glass of Dom Pérignon. They dress in Zara rather than Dior. And they arrive at the airport in a car reserved through Uber instead of a chauffeured limousine.

“The codes have changed since the crisis,” when private jets symbolized excess, said Azoulay, president and co-founder of Wijet. “We’re in a phase I call ‘Luxury 2.0,’ where people look at value and pleasure as a joint proposition.”

It is all relative, of course. Wijet, a small startup that began in 2009, charges per hour what most people would find expensive for a round trip to Europe. But just as budget carriers like Ryanair and EasyJet made Spanish beach holidays and weekends in Prague affordable to Europe’s working class by slashing costs, Wijet has set out to democratize air travel at the high end.

By offering private flights for a fixed hourly price of 2,200 euros, or roughly $3,000 — far less than the 4,000 euro or more rivals charge — Wijet is betting that what it gives up in exclusivity it can eventually make up with higher volume.

“It’s about opening up the industry to more people,” Azoulay said.

While the richest 1 percent in much of the world have continued to spend freely through the global downturn, in Europe recession and austerity have eaten into the fattest wallets. Luxury spending in the region grew at just 2 percent in 2013, according to an estimate by Bain & Co., half the pace seen in the Americas and China, and far behind the double-digit growth in emerging markets like Southeast Asia.

The trend has left many European companies that have relied on an affluent clientele struggling to adjust their offerings to respond to these new pragmatic mores. But where many of its rivals — including Air Partner of Britain and VistaJet of Switzerland — might see an existential crisis, Wijet, based in Paris, sees opportunity in catering to a more cost-conscious jet set.

Wijet, which has charged budget-luxury fares since it started, has only five planes, with plans to grow to eight by the end of this year. It has flown more than 12,000 passengers on 4,000 flights. By comparison, VistaJet has 40 jets in its fleet and it carried 27,000 passengers on 11,000 flights in 2013 alone.

They and dozens of rivals are fighting for what remains an exclusive slice of European air transport. Private aviation makes up just over 7 percent of overall departures. And the sector is still trying to regain its footing.

The industry suffered after the financial crisis that began in 2008 and was compounded in Europe by the sovereign debt crisis and recession. Private jet traffic, which fell by 15 percent in 2009, has been recovering slowly but has yet to return to precrisis levels. Hourly flight rates have also begun to creep higher, though they remain well below those of the mid-2000s boom. Stubbornly high oil prices, airport fees and carbon taxes raised operating costs, squeezed profit margins and forced many private-jet companies into bankruptcy.

When Wijet carried its first passengers in 2009, it hardly seemed like the best moment to start a cut-price private-jet airline. But the misfortune of others allowed Azoulay to buy planes on the cheap. And he was eager to exploit what he saw as an unnecessarily complex and opaque sector burdened by layers of intermediaries and hidden extra charges.

“The private jet market is such a black box,” Azoulay, 41, said in a recent interview in Wijet’s offices near the Champs-Élysées. “I know of no other luxury business where you have so much inefficiency. It’s not normal.”

He compares the experience of booking a private jet to shopping in a high-end clothing store. “There are no price tags, there is no standard size and the sales guy is already looking to take a 50 percent commission,” he said. “It’s bad.”

He began sounding out investors in 2008. After several years of losses, the airline broke even in 2013 on annual revenue of around 5 million euros, or $6.9 million, he said. Wijet expects to turn a healthy profit this year, helped by a new partnership with Air France-KLM that will soon offer on-demand connections for that carrier’s first-class passengers.

Wijet’s proposition differs from most private-jet charter companies in that its fixed hourly rate is all-inclusive. Wijet flights are also reserved online, bypassing brokers.

It also avoids the risks associated with so-called fractional ownership, which obliges travelers to buy a fixed number of flight hours each year, whether or not they use them.

Following the playbooks of commercial low-cost carriers, Azoulay has sought to strip out as much cost as possible from operations while still providing a high level of safety and comfort.

“We didn’t set our price looking at the competition,” Azoulay said. “We looked at our costs, and we chose to go to the bottom directly.”

The savings begin with Wijet’s fleet — five Cessna Citation Mustang 510 jets — bought during the financial crisis for about 30 percent off their $3.3 million list price each. With just four seats, fuel-sipping Mustangs are more snug than the Learjets, Gulfstreams and Falcons typically offered by larger competitors.

Most private flights in Europe involve fewer than four passengers, however, and Wijet’s main base at Le Bourget, outside Paris, is within a three-hour direct flight from 90 percent of the Continent. “A lot of private clients are hiring more plane than they really need,” Azoulay said.

Azoulay also zeroed in on ways to save on labor. Wijet employs only 22 people — 13 of them pilots — and its back office is entirely digital. “Our airline is basically managed by an algorithm,” Azoulay said, as he scrolled through a flight schedule on his iPhone.

The only area where Azoulay said Wijet had declined to scrimp was safety and passenger comfort. “Everything that is low-cost is behind the curtain,” he said.

With revenue growth of more than 40 percent last year, and a roster of more than 500 corporate clients, Wijet’s decision to position itself at the low end of the market appears to be paying off.

“People are not going to be willing to pay a premium to fly private anymore,” Azoulay said. “I think that’s done. There’s no way back.”

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