Filling the gap between airlines and executive aviation: Aero CEO, Ben Klein

Somewhere between flying business class on a commercial airline and taking a private jet, a new value proposition combining elements of both worlds is quietly emerging in the US travel market. 

Founded by Garret Camp, one of Uber’s co-founders, and based at Van Nuys Airport (VNY) in the Los Angeles area, Aero is possibly the most remarkable example of this new breed of airline offering a semi-private experience. 

Interestingly, Aero’s origins are in Europe. Aero started up back in 2019, offering flights out of Farnborough (FAB), an airport in Hampshire just outside London in the United Kingdom. In addition to hosting the eponymous air show every other year, Farnborough also sees many executive jet operations.   

However, the timing wasn’t favorable as just a few months after Aero launched its services, the COVID-19 pandemic struck.   

After this forced hiatus, Aero was back in the market by 2021, although this time with its own Air Operator Certificate (AOC). At the time of its launch, Aero commercialized tickets under its own brand, but it chartered the aircraft from other operators.  

AeroTime recently had the chance to speak with Ben Klein, CEO of Aero, to learn more about the airline’s rather unique value proposition and how it fits into the current industry landscape. 

Klein began by talking about the airline’s decision to find a new home on the other side of the Atlantic. 

“We had to make a decision to consolidate our operations in the place that offered [the] best growth prospects and that was the US,” he said.  

A lawyer by background, Klein joined Aero as general counsel in 2021, and has been at the helm of the startup airline since September 2023. 

Klein, a self-described “aviation nut” who learned to fly aircraft from the age of 12 and holds a pilot’s license, explained how he jumped at the chance to join Aero when the opportunity arose.  

“I didn’t have to think much about the chance to combine my life passion with my career,” he said. “It was an easy decision.”  

For Klein, leading the airline doesn’t mean sitting behind an office desk. Aero’s top executive has the relevant type-rating to fly Aero’s aircraft and can sometimes be seen flying as first officer.  

A rather unique value proposition 

“Aero was created to fill a gap between the first and business class offering in commercial airlines and private aviation,” he said. “Even if you are flying first class, you still need to go through some parts of the process that are painful, such as going through crowded airports, waiting to claim your baggage, etc. You can’t really get out of that part of the experience.” 

“The alternative is to fly privately,” he added. “But this is very expensive and out of reach for most people. Also, people are increasingly paying attention to their carbon footprint.” 

According to Klein, the idea is to provide a private experience but to do so at a fraction of the price “by gathering a bunch of people that want to go to the same destination”.  

“We saw that need in a number of markets,” he said. 

As of June 2024, Aero offers premium services out of Van Nuys to a number of leisure destinations in the United States and Mexico: Aspen, Colorado (ASE), Sun Valley, Idaho (SUN) and Los Cabos (SJD), at the southern tip of Mexico’s Baja California peninsula. 

Klein attributed Aero’s move to California in 2021 to a combination of better growth prospects in the US and regulatory hurdles in Europe. 

“The US market is stronger. It is growing faster,” he said. “But we were also facing more regulatory hurdles in the UK that would have hampered our potential expansion there.” 

However, Klein also highlighted that the move away from Europe was not due to lack of demand.   

“There was plenty of demand in Europe, particularly for an airline of our size. We flew from the UK to Ibiza (IBZ) and to Nice (NCE) and to Zurich (ZRH) and Sion (SIR), Switzerland, during the winter season,” he said. “We just could not grow quick enough due to regulatory hurdles.” 

“You can see now how some companies are springing up in Europe imitating our business model,” he added.  

Although there are several Part 135 operators in the US market offering what is commonly called “public charter” flights, Klein explained how Aero chose to differentiate itself by targeting the highest end of the market. 

“We didn’t see anyone tackling that market in Europe or in the US,” he said. “Even today there are very few operators doing what we do, providing a semi-private service.”  

In addition to operating from small airports with private terminals where you can arrive 15 to 20 minutes before your flight and walk from gate to plane in seconds, Aero has added several premium elements to its service. 

For example, it offers a concierge service that is ready to answer the phone 24/7 with no waiting times and it hosts passengers at private lounges where dedicated staff handle check-in and take care of any luggage. Inflight, Aero tries to mimic the type of service found in private aviation, offering a menu prepared by Erewhon, a well-known LA-area market as well as premium wines and spirits.  

Since October 2023, Aero has also been offering Starlink internet connectivity onboard its flights. 

“Starlink is as good as people say it is,” Klein added. “The internet is even faster than at home and it is very reliable. It doesn’t fall off with a larger number of users.”  

Aero currently operates a fleet of five aircraft, four Embraer ERJ135LR fitted with 16 seats, and one Embraer Legacy 600 executive jet. The former are normally used on scheduled services, while the latter is devoted almost exclusively to charter flights. 

AeroHowever, the ERJ135s are also used on charter services. Klein explained that the 16-forward facing seats and large luggage hold make this aircraft type particularly well-suited for some missions, such as moving rock bands across the country.  

“Charter is a growing segment of our business, and it is getting larger in 2024 than at any other time in the past,” he said. “Charters now account for around 40 to 50% of our revenue.”  

Aero has also launched a service for the events market called “Aero Private” which has proven quite popular. Event organizers, for gatherings such as conferences and weddings, partner with Aero to offer prospective attendees an upmarket way to travel.  

A model not without challenges 

Klein also commented on two sensitive topics relevant to the future of Aero’s business model. 

One is the controversy in the US over the ability of public charter companies operating under Part 135 regulations to offer scheduled services, and whether this should be restricted to carriers operating under Part 121 regulations (the ones that apply to most of the larger mainline airlines).  

The matter is currently under review by the Federal Aviation Administration (FAA) and has larger established airlines and smaller operators like Aero on opposite sides of the argument. 

Klein expressed Aero’s willingness to get involved in the ongoing public debate and contribute the firm’s points of view to the lawmaking process.  

“I am confident this will be resolved favorably,” he added. 

The other hot potato is sustainability, a particularly pressing issue in the premium segments of the market with their lower cabin densities. 

“There is no avoiding the fact that aircraft burn fossil fuels, which contribute to climate change, and this presents us with an incredibly difficult challenge,” Klein acknowledged. “We are mindful of the effects of flying and advocate for change.” 

“We are also seeing lots of exciting things on the regional side of the industry,” he continued. “Cleaner propulsion technologies that will be well-suited for the sort of short-haul, low density routes that we fly, and we plan to take advantage of that. We want to be among the first adopters.” 

“In the meantime, we do what we can,” he said.  “We are offsetting all our carbon emissions with CORSIA-eligible credits. We don’t ask our guests to pay for that, we don’t advertise it or do anything like that.” 

“By the way,” he added. “I am not naive, and I know carbon offsets are not a panacea, they don’t solve the underlying problem. But it is something we can do now.” 

Klein also highlighted that because of the market segment Aero targets, the carrier is consolidating part of the demand that would otherwise have flown in multiple private jets. 

Aero’s market positioning

In fact, around half of Aero’s customers are no strangers to executive aviation, with Klein stating that it is “50-50 between those that come to us from private aviation and those that switch from commercial airlines”. 

“We’ve got a lot of customers that have access to their own jets, either through ownership or through fractional programs,” he continued. “But when Aero goes where they want to go, they choose us because we offer a better value proposition and the same, if not better, experience.” 

“We also get a number of people that are used to flying first or business class and see the value of upgrading to Aero…the shorter travel times we offer and, frankly, at certain times of the year, our prices can be pretty competitive with commercial airlines,” he added. “In peak season a first class ticket from LA to Aspen can cost a couple thousand dollars and we are not that far off that figure while providing an exponentially better level of service.” 

One thing commercial airline have, though, is feeders that help them fill their planes. Klein acknowledged that this was another challenge for small, independent, and differentiated airlines like Aero, but said the carrier has developed its own marketing approach. 

He said: “Take Aspen, for example, an airport that has limited commercial service, so people that want to visit are going to look for new ways to get there. It’s a small community and we benefit a lot from word of mouth.”  

“We have been operating for three years now in the LA area and we get a tremendous number of referrals. But it takes time to develop. It doesn’t develop out of nowhere,” he continued. “There is a cost associated with this way of marketing. This is why we are very careful about how we launch new routes.” 

He added: “All of our routes share some characteristics. There are lots of people in the LA area that own second homes in the places we fly to. We work with a number of partners on the ground, with home-owner associations and premium hotels in Cabo, Aspen and Sun Valley. We also do traditional marketing on social media, at airports. But we are very much reliant on word of mouth.” 

These are obvious leisure destinations. So, how does Aero handle seasonality? 

 “We are affected by seasonality,” he said. “There are ebbs and flows, yeah. But places like Aspen are great year-round, [it’s the] same with Cabo outside of hurricane season and with so many of our guests having second homes, we see traffic all year round.” 

There is also intra-week demand variation, which is why Aero structures its schedule around the weekend. Unless there is some special holiday or event, it doesn’t fly on Tuesdays and Wednesdays. 

“These are leisure destinations and for the most part we won’t put a seven-day-a-week schedule,” Klein explained.  

With so many regular travelers, is Aero considering the introduction of a loyalty program?  

“Stay tuned,” Klein said. 

What sort of figures are we talking about? 

“From a revenue perspective, we have been growing since 2021,” Klein said, adding that in 2022, the airline doubled its revenue. “We grew another 65% in 2023 and we expect significant revenue growth in 2024.”  

In terms of number of passengers, Klein said the airline flies some 500 to 600 passengers on scheduled services each month.  

So, what’s next for Aero? 

“At the moment we are very focused on building our LA base, which is a fantastic market for us,” Klein said. “We have built a very loyal guest base here that allows us to keep growing and we plan to continue expanding our LA presence by adding new routes.” 

When it comes to network expansion, the airline is focusing on flights from LA in the short-term. However, Klein noted that Aero does intend to launch a new base in the US “in the medium term”. 

“I don’t think it is going to be on the West Coast,” he said. “LA is a strong market for many obvious reasons, and I think there are other similar markets in the US that share some of these characteristics and will present opportunities for Aero to grow.” 

“We just want to be very deliberate about the way we do it and, of course, we will be adding to the fleet with aircraft that have a bit of a longer range and allow us to do routes that we are not able to do now,” the executive added.  

Before the interview ended, Klein took the opportunity to praise the Aero team.  

“I’d like to emphasize what a fantastic and service-oriented team we’ve built here at Aero,” he said. “We have an average NPS score of 93, which is unheard of in the industry. This is indicative of something very unique and special what we have done.  

“These are numbers you see at the type of hotels our guests are going to,” he said. “And our guests often remark that the flight they take with us is just as memorable as their ultimate destination.”  

President US at VistaJet Leona Qi on how the executive jet firm conquered the US 

Executive SpotlightbyMiquel Ros2023-12-27

The post Filling the gap between airlines and executive aviation: Aero CEO, Ben Klein appeared first on AeroTime.

Go to Source