Q&A: Andrew Bettis of AB Jets
Published November 10, 2014 by William Williams
Andrew Bettis is founder of AB Jets, a charter flights company that recently announced it has established a permanent operations in Nashville. Of note, Bettis and co-owner David Turner are maintaining their operations in Memphis.
Bettis (pictured) recently met with Post Managing Editor to discuss his business.
AB Jets is co-based in Nashville and Memphis. How does this arrangement work?
We have jet aircraft and personnel based in both locations. The close proximity of the locations lends to a complimentary relationship with our bases. It allows us to not only serve our primary markets but also our additional customers in the states surrounding Tennessee.
You recently added two Learjet 60s to your fleet of eight jet aircraft. These are not inexpensive. Do you lease or own the jets and what is the typical model in the charter aircraft industry, particularly given most of the players in the industry are small?
Yes, we did add two Learjet 60s from listening to the needs voiced by our customers. The Learjet 60 can carry eight passengers from Nashville to anywhere in the Continental U.S. non-stop, so it is a go-to aircraft for our clients who do business on the West Coast. We also added Wi-Fi so that our customers can stay connected and be more efficient while traveling. Our model is different than traditional aircraft charter/management companies in that we go ahead and purchase the best pre-owned aircraft on the market. We then upgrade the aircraft as needed with new paint, interiors, Wi-Fi, etc. We think that it is a smart move to buy a pre-owned aircraft that has a lot of life left on it where someone else has absorbed the initial depreciation. This way we can pass on a tremendous value to our customers. Along with already having the aircraft in inventory, we have the pilots, scheduling, maintenance and charter revenue already in place. It really creates a path of least resistance for our customers to step into aircraft ownership or a lease at the lowest possible cost.
How do you handle insurance of both clients and employees?
Our aircraft are insured by a AAA-rated insurance underwriter on a fleet policy belonging to AB Jets with above-industry- average liability limits. Our customers rest assured knowing that we carry high limits on our aircraft policies. We also make safety a priority, so that mitigates the chance that insurance will have to ever be used. In fact, we were just awarded the
prestigious ARGUS International, Inc., platinum safety recommendation. Only about 5 percent of the charter companies have achieved this rating worldwide.
You lease space at Signature Flight Support at the Nashville International Airport. How would you describe the relationship between a private charter flight company such as AB Jets and BNA and, in contrast, the relationship between a commercial airline company and BNA?
AB Jets serves a niche group of individuals and companies who recognize how an efficient use of their time equates to add an intrinsic value to their lives and bottom lines. Our passengers travel on their schedules while the airlines expect passengers to travel around airline schedules. We also serve over 5,000 airports direct from Nashville with no connections.
The Metro Nashville Airport Authority has done a great job at providing the airlines, as well as the general aviation industry, the facilities and resources to serve their respective markets.
What type employment arrangement do you have with your pilots?
Our pilots are full-time employees of AB Jets. We don't outsource or use part-time help for our crewmembers. With the number of flights that we operate on a monthly basis, we wouldn't want to do it any other way. Additionally, this arrangement gives AB Jets full operational control of the training, qualification and operation of our pilots. We think that a consumer would be prudent to ensure that the company that they fly with does not outsource this function as some do. When you outsource your pilot functions to another company, we feel that quality and consistency of an operation could be compromised in the area that you least want a deficiency.
Per IBISWorld.com, I see that the charter flights industry offers a modest level of large-company concentration, with the four largest firms in the sector accounting for about 13.5 percent of industry revenue in 2013-14. In fact, more than 90 percent of companies operating in the your industry are nonemployers (that is, the company itself accounts for one enterprise, establishment and employee). With so many small companies, the charter flights industry offer strong competition — with no one company dominating market share. Your take on this?
Yes, our industry is made up of a large number of small companies and divided into tiers of operators who serve local, regional, national and global customers. By getting to know our customers, we are able to understand their preferences for each flight. That's why we recommend that jet charter clients do business with the operators who are local to them. It's the same type of experience a high-net- worth person receives when they bank with a local bank versus a national or global one. At a local bank, the president of the bank will greet you personally. With a national or global one, they most likely have never heard of you.