From getting through the COVID-19 pandemic to taking ample opportunity of the explosive demand for air travel, Tradewind Aviation is a case study in how to provide long-term growth, sustainability & success.
The carrier is positioned to take advantage of the many pies within aviation, whether it be scheduled commuter services, to catering to the private charter side of things.
AviationSource got to sit down with co-founder and CMO David Zipkin, who founded the airline with his brother Eric to discuss this further, including where the airline currently is, as well as what the future may look like.
The Caribbean Is Their Bread & Butter…
Tradewind Aviation have been very popular on social media, especially when it comes to seeing their Pilatus PC-12 aircraft landing into the likes of St. Barts, St. Maarten & other airports around that region.
In this case, the Caribbean is a major market, as Zipkin explains:
“The Caribbean represents about 40% of our overall revenue, which is interesting because it pretty much started off as a way to keep our fleet flying in the wintertime. About 18 years ago when we first entered the market, that was sort of our strategy. But now it’s become a formidable part of our overall revenue and strategy”.
“The Caribbean wasn’t well known for high level of service in aviation. In fact, it was pretty well known for subpar service. We went down there with the model that we had established already in the northeast, which was to fly shorter flights with the same high level of service that you would expect from a larger jet”.
“And it’s just been a great hit, especially in luxury destinations like St. Bart’s, BVI and others where their focus is on the luxury traveler and they demand a much higher level of service than had existed before we came down there”.
Tradewind Aviation Offers Flexibility in the Northeast…
Another aspect of the business that Tradewind Aviation performs well in is the flexibility that they offer to customers in the northeast United States, which provides a more unique and sufficient offering compared to flying on bigger jets.
“On the surface, it may look like we compete with them”, Zipkin said, referring to some of the U.S commercial carriers that operate in that area.
“But what we’re really offering is a completely different category, especially when you consider the needs of regular commuters. Firstly, because we’re flying with a larger fleet on the same route, and it’s a relatively short route, we’re plotting multiple departures per day”.
“It’s not uncommon for us to be in and out of Nantucket 20 or 30 times, and the Vineyard 15 to 20 times per day. And what that offers to the client is multiple departures per day, so in the high season, pretty much every hour, we’ve got a departure between the New York area and the Islands.”.
“This caters to business travelers where if their schedules change, they know that if they can make the 2pm flight instead of the 5pm flight, then they can move around very easily”.
“Big airlines tend to operate maybe two services per day, and that doesn’t really work for regular commuters”.
“We also save them time through a much quicker boarding and deep planning process with only eight seats, as well as valet services for their vehicles, private lounges and so forth. From a timing standpoint, they’re saving so much more time than using the airlines. You can work all day and be home with the family by 5/6pm for dinner”.
Zipkin Speaks High Praise for the Pilatus PC-12…
The majority of the Tradewind Aviation fleet consists of the Pilatus PC-12, of which in the interview with Mr. Zipkin, he couldn’t speak highly enough of the aircraft:
“It’s a wonderful machine in so many ways. It’s the right aircraft for shorter distances. As an example, New York to Nantucket is about 200 miles. So to fire up a larger jet or faster jet on 200 miles is just overkill from an economical standpoint as it’s much more expensive, but also on the environmental standpoint too”.
“The beauty about the PC12 is that there’s no compromise from a comfort and safety standpoint. The cabin the same or larger than a light jet cabin, and it’s pressurized when we’re flying high. So it’s smoother & safer”.
“When we think about our private charter program, we are oftentimes flying into airports that are just inaccessible by larger jets. That of course, saves a lot of time and hassle. It’s a better experience for those reasons”.
Zipkin also confirmed to AviationSource that Tradewind Aviation has 20 more PC-12s on order, of which deliveries will be spread out over the next few years.
The Business Market is Booming, But There Are Nuances to It…
From what we observed with NetJets placing an order for over 1,000 aircraft this year, it remains clear that the business market is booming.
However in the perspective of Zipkin at Tradewind Aviation, he believes there are nuances to the condition of the business industry:
“I think there are some nuances to the boom of the sector. Coming out of the pandemic, the industry just exploded with demand in a way that had never happened before”.
“More people tried private charter for the first time to be away from others and maintain their sort of space. And that carried through to about eight months ago”.
“The boom in private aviation, while it’s still in effect, has started to wane a little bit in all categories of flight being light jet, medium jet & large-cabin jet”.
“However it’s become a better price point to the point that for folks who tried private for the first time with us, more of them are staying with it coming out of the pandemic, because it has become really cost effective when you consider the time savings”.
“What I really like about the area of business that we are in is that we’re really solving I think a bigger problem for people Large jets are great if you can afford it, but let’s say you are flying five or six hours from New York to Los Angeles. The efficiency as compared to the airlines starts to come down a little bit compared to the short distance side”.
From this perspective, Zipkin then addressed once again why the Pilatus PC-12 is the perfect fit for Tradewind Aviation.
“So you imagine on a PC12, the trip compared to the airlines, we’re saving them half their time, as it takes longer when using an airline.”
“If you’re saving one or two hours on a one-hour flight, that’s a bigger win for people. There’s more value there.”
“That is why I think it’ll continue to boom for some time, especially with the type of flying that we do”.
On the NetJets order, Zipkin said the following:
“I don’t seen the Amazon of private aviation really happening. It’s all about measured sustainable growth and that’s where the strongest companies will come out on top”.
“Even if you look at NetJets, when you think about how large their fleet is and also the fact that this order is over time, even for them, that’s somewhat measured growth. And that’s how they have grown since their inception”.
A key message that Zipkin gave throughout this interview was the element of time, and how people favor that over cost.
And the model does seem to be working for them, especially on the element of charging by the hour for charters.
Tradewind Aviation Attacking The Principle of Additional Costs…
Charging by the hour for charters and placing a nominal membership fee on top is something that Tradewind Aviation is against.
As Zipkin believes, he thinks this is unneccessary in this industry:
“Memberships are fine in concept, but what we don’t believe in is charging a membership fee on top of your hourly costs. And quite a few of our competitors do that”.
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“They charge in the aggregate a nominal fee, which is sometimes significant if you don’t fly a lot. But still it’s really unneccessary. So when we talk about no membership fees, we’re not charging on top of the hourly fee. The client shouldn’t pay for anything beyond that”.
“We instead have two programs that we use for this. Firstly, called the Good Speed Program, clients can pre-purchase a block of hours being 10, 20, 40 hours, and for doing so they get a discount and they get other perks.”
“You can consider that a membership, but on the scheduled side for the commuters, we have our Ticket Book Concept where you pre-purchase a bunch of seats on the flights, for which you also get a discount on as well.”
“So you know, the membership and the concept is fine, but we just don’t believe in charging it on top of your per seat or per hour cost”.
Strong Fleet Expansion on the Way…
Tradewind Aviation has some strong fleet expansion on the way as they continue to gain a lot of ground across the United States & Canada.
“We have 26 aircraft right now. We expect this to grow to 50 in the next three to five years”.
“We manage well, but not overextend beyond what we can cover in terms of maintaining a very high level of service.”
“And so those regions that we have in the Northeast, Southeast and the Caribbean, the general coverage is about 300-400 nautical miles around the center point of that region.”
“So with our fleet of 26 aircraft, we can cover that quite well by floating the aircraft when we can”.
Such growth has enabled Tradewind Aviation to recently open up it’s first base in the Southeast, being Palm Beach.
When asked about whether this is part of an overall strategy to further connect the U.S services and the Caribbean, Zipkin said:
“Good question. What we really offer with the PC-12 is regional planning.”
“Our bread and butter, our perfect flights, will be Palm Beach to the Bahamas or Miami up to Tampa or Atlanta and that sort of thing”.
“While the PC-12 is an incredible machine, there is a distance at which it becomes less effective.”
“And so southeast to northeast or southeast to the Caribbean or Northeast to the Caribbean, that’s really better done in our jets, being the Citation CJ3s. And we’ve always been doing that”.
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Proud of their Efforts in Environmental Sustainability…
Coming out of the COVID-19 pandemic, there has of course been a big push on environmental sustainability, particularly on becoming net-zero by 2050.
Last year, Tradewind Aviation acquired its 4AIR Level 1 Carbon Neutral Rating, highlighting some of the paths that the airline has taken over the last 12-24 months.
One avenue of discussion within this is around sustainable aviation fuel (SAF), and Zipkin was clear in the challenges of SAF distribution and implementation currently:
“We’re very proud of our decision to pay to offset all of our flying.”
“A lot of companies are still doing it as an opt-in for the client, and for a short while we tried to do that, but very soon after, we decided to just make it our expense and our cost, because it’s important to us”.
“Whether it’s a training flight or a revenue flight, we pay for that offset”.
“The problem of availability of SAF seems to be somewhat regional. The Northeast is having a tough time supplying it and there are other parts of the country that are doing a little bit of a better job.”
“I am going to NBAA in a couple of weeks to get the latest update on the availability”.
“[SAF providers] are doing a great job in really tracking the market and providing opportunities for operators.”
“But yeah that’s a big hindrance right now, both on availability and also on cost, as it is very very high.”
“We’re talking multiples, not percentages, but that is starting to come down and at some point, it will be feasible”.
“Pilatus have also told us that our PC-12s are SAF-ready as well”.
Tradewind Aviation Considering Expanding into Europe…
Looking towards the future, Zipkin at Tradewind Aviation is looking to go above and beyond in terms of plans for expansion across it’s five-year plan and beyond.
“We want to be the premier operator of what we like to call regional mobility. There are lots of great markets for what we do pretty much everywhere in the world. Within the five-year plan, it’s nationwide for the United States.
“Once we have achieved that, then we will start to look at other markets, specifically Europe. So it’s really about expanding responsibly. The margins are very small, and to overextend is a very risky proposition”.
“We’ve seen some pretty public examples of that recently where companies have tried to really kind of expand with what you could call “the Amazon mentality”.”
“You know, just be everything to everyone all over the place, burn through tons and tons of cash with the idea that maybe you could tap the brakes and make money at some point in the future, but it just doesn’t work that way”.
“It’s important to adopt the sustainability model. Not just from the environmental side, but on the financial side too”.
Overall…
From the conversation that we have had with Zipkin, it remains clear that Tradewind Aviation is going to be a company that will last for a very long time.
Through the measured approaches to growth and sustainability from David, and his brother Eric, it is clear that making decisions such as not going public and keeping things measured and controlled is the right way to go about things in the context of a post-pandemic period, where whilst elements are pretty positive demand-wise, things can go wrong if you take too much advantage of it.
All eyes will be on the carrier to see how the rest of this decade goes.
With their plans for fleet expansion and market expansion, Tradewind Aviation are a company to keep your eyes on moving forward, as they could very well become the catalyst for positive and successful change in this market for years to come.
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