Stratos Jets says franchising offers operators independence versus private equity

With private equity’s growing interest in charter operations increasing the level of industry consolidation, Darren Engle, chief operating officer, Stratos Jets, said franchising offers a solution. 

Stratos Jets launched its franchise model in 2023 in an effort to rapidly expand the brand through independently owned and operated agencies. “By aggregating demand through one brand we are standardising industry safety standards, process and best practices,” said CEO and founder Joel Thomas last year.

An effort, the company says, has come into sharper focus with interest from private equity firms heightening, including a $600m investment in VistaJet and an $800m investment in Flexjet. 

The first recorded private equity investment in charter came back in 2016 when Alcuin Capital Partners became a minority shareholder in Air Charter Service. 

Engle believes the private equity model of buying up brokerages only creates more fragmentation, and there’s no real opportunity other than an exit for the owner.

“The more consolidation you get from private equity, the more fragmentation you create in the wider industry,” said Engle (pictured inset).

“You’re starting to see people talk about the commoditisation of private air charter, because when you’re a smaller brokerage competing against another smaller brokerage, what other value can you provide other than the cheaper price?”

Engle said Stratos’ solution creates an ownership model where independently owned and operated jet charter brokerages can come together under one brand. Keeping their autonomy, but making use of the wider, recognised brand. 

“So if they’re a small three to five million dollar jet charter brokerage, they can have relationships established as if they’re 100 million dollar brokerage, because they have the same corporate name with the relationships and trust it has built since 2007,” added Engle.

The Stratos Jets franchise fee is $200,000. According to Stratos Jets, the opportunity to own a high functioning private jet franchise is open to anyone with the character, belief, and work ethic to achieve success. It says good candidates are existing charter sales agents and private flight advisors, jet charter brokerages, fixed based operators, and aviation manufacturers. Travel agencies, luxury villas, marketing professionals, and those representing high net worth individuals, such as family offices and talent agencies also make sense for the ownership through franchise model.

“We’re looking at consolidating demand through one brand and we’re doing that through our platform,” said Engle. “Our focus is being advocates for our agency owners, focusing on safety within the industry, focusing on the customer experience, financial services and operational support.

“If you buy a Stratos Jets franchise, you benefit from performance-based, rather than fixed, expenses which reduces risk and provides the necessary infrastructure to sell any volume of business. You still have all the upside, but now you don’t have to use your own operating capital and your team members aren’t required to do everything themselves.”

A charter SME’s view 

Emanuele Pavoncello, CEO and founder, PrivateJetFinder, said his company adopted the “white glove” boutique service model to overcome market challenges posed to small, independent businesses. 

“We also adopted an on demand charter offer, looking to always source the most cost effective solution to our clients. Operational efficiency within our team is a must, as well as internal communication, to make the client feel at home with tailor made service,” he explained.

The Dublin-based company also operates an affiliate programme, channeling flight requests and new client interest from charter brokers, travel agents and hotel concierge. “Our affiliates are mainly charter brokers, so we act as master broker to provide them real time quotes at best market price,” said Pavoncello. “Other affiliates are luxury travel agents, hotel concierge and also many websites on general aviation sector.”