Aero’s Semi-Private Ambitions

The Los Angeles-based public charter carrier is more premium than JSX. Is there a market for it?

Dear readers,

One day last week, after dropping off my daughter at school, I decided to do something I almost never do (because I'm old and jaded and it's a giant time-suck). I accepted an invitation to tour an airplane. My host promised me that this time would be special, because this was no ordinary commercial jet. It was a semi-private one with differentiated service that whisks people from Van Nuys around the American West, and, since May 12, to New York.

Don't worry: this is not another JSX story This is about Aero, a more premium outfit than JSX, with just 16 seats on its ERJ-135s (14 fewer than JSX). Since the ERJ-135¹ can’t fly cross-country, Aero uses a Legacy 600 with 13 seats for New York, though it doesn't sell them all because who wants to pay $5,000 (one-way) to sit between two strangers on a cramped divan (that’s private jet-speak for couch) for five hours?

Aero CEO Ben Klein, who joined the company in 2021 as general counsel and became CEO two years later, gave me a tour of a parked ERJ-135 that would be departing for San José del Cabo a half hour later. After our discussion, which continued in the lounge, I had a few thoughts about why I should write about Aero in this newsletter.

First, the core model of semi-private intra-West flying makes some sense given the wealth in Los Angeles, but I don't see how the economics work for New York, a route that Aero flies only once a week.

Second, the people who pay at least $2,000 to fly one-way to Cabo look very fancy, judging by the clothing and handbags I saw in the lounge.

And third, if you work for an airline, Aero might want to partner with you.

It's really that third piece that made me want to write about Aero. The vast majority of my paying subscribers either work for an airline or serve as a vendor to them, and I don't like to waste their time by introducing them to companies that don't overlap with their businesses. But the gap between semi-private jet and premium airline service is closing. Major carriers are making big investments to improve their premium offerings in order to attract high-net worth passengers. "Delta has made a significant investment in Wheels Up, right?" Klein said. "This is catering to their premium side. Listen to these earnings calls: [it's] premium, premium, premium. That's what we do."

To a large Part 121 carrier, Aero could be a competitor or a collaborator. American and Southwest thus far have been in the former camp, complaining that semi-private airlines poach their passengers — notably in Texas, where JSX often flies the same routes as American and Southwest. You may recall that at the end of the Biden administration, Southwest and American argued to federal regulators that the public charter model used by JSX and Aero was not safe, and that these carriers need to fly under the same regulations as commercial airlines. The FAA had planned to tighten its rules, though I doubt that’s a priority for the Trump administration.

Other airlines opt for partnerships. Notably, through agreements with United and JetBlue, JSX customers can earn MileagePlus or TrueBlue points for many flights. Aero doesn’t currently have an agreement like this, so I asked Klein if he might be interested in something similar. "There's a lot of possibilities," he said. "We [could] tie up with somebody else in this space. There are airlines out there that are looking to increase their premium offerings.”

Partnering with an established airline could also shelter Aero from aggressive competition or more robust lobbying efforts against Part 380 operators, because companies generally don’t seek to put their partners out of business. Maybe that’s moot anyway — my sense is that Southwest and American have moved on to other priorities. But Klein told me "I'm not so sure about that,” and "we'll see."

Now for a few other things about Aero.