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Roger Jewett: Calgary’s not-so-frequent Flyer

How one entrepreneur is giving new meaning to the idea of a seat sale

Mar 6, 2014

by Max Fawcett

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Jump On CEO Roger Jewett
Photograph Heather Saitz

Like most people, Roger Jewett was tired of paying high airfares. But unlike most, Jewett had the ability to do something about it. In 2013, after three years as the CFO of Enerjet, a charter airline based at the Calgary International Airport which flew Boeing 737s and claimed much of its business by ferrying people to and from the oil sands (and most of that from Monday through Thursday), Jewett acted. He started Jump On, a company that combines Groupon’s business model with the ready supply of airplanes in fleets such as Enerjet’s. The result is a unique – and potentially successful – new business. Alberta Venture’s Max Fawcett talked to Jewett about where it might ultimately go.

Our flights only go if we fill up the plane. We call that the “jumping point,” and that’s where we’ve booked the number of passengers needed to ensure the flight is profitable. – Roger Jewett, Jump On

Max Fawcett: How did you come up with the idea for Jump On?
Roger Jewett:
We [Enerjet] had three 737s sitting idle on the weekends, and we were looking for ideas on how we could put them to work. But anything we came up with that depended on the traditional [business] model just had too much financial risk – to try to launch scheduled flights on a weekend the traditional way, you’d have to commit to going, you’d have to have multiple flights, you’d need to commit to a three month schedule, and you could lose your shirt pretty quickly if the word didn’t get out and you didn’t fill them up. So one day, it hit me: What if the flights only go if we fill up the planes? I chatted with Enerjet about it, and it didn’t really fit the way they wanted to do things, so I negotiated to start Jump On myself and contract Enerjet to fly some flights.

MF: You’re a chartered accountant – surely you know that the airline business can be a graveyard. What’s going to make Jump On different?
RJ:
Well, why do airlines go broke? Massive capital costs of acquiring airplanes, and flying empty planes – or being forced to drop your price to compete. We have no up-front capital costs because we don’t own or lease the airplanes – we borrow them. And our flights only go if we fill up the plane. We call that the “jumping point,” and that’s where we’ve booked the number of passengers needed to ensure the flight is profitable.

MF: What’s the appeal for the charter airlines you’re working with? Why are they letting you borrow their planes, as you said?
RJ:
Right now, what they do is they charter the entire plane to an oil company, and it’s up to the oil company to find the people to put on it. The charter airlines aren’t in the business of marketing flights, passenger by passenger, like the scheduled airlines do. So, really, we’re helping do that marketing for them. The way I look at it, the more airlines and airplanes we have available, the more people that will pay attention to what we’re doing, which benefits all of my airline partners.

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MF: Have you gotten any pushback from the big two?
RJ:
WestJet noticed. They matched us on a couple of flights. But our model is such that that won’t put us out of business, because if they match our price on a flight maybe I won’t sell that flight out but I don’t lose any money because the flight doesn’t go. I don’t need to fly half-empty planes. And then what have they really achieved? Nothing, because I haven’t
gone broke.

MF: What’s the endgame for Jump On?
RJ:
There’s no target exit. It’s about creating a viable business in Alberta, because there are so many planes here and we have an affluent society where people can afford to take off for the weekend. Next, we would go to Vancouver, because there are aircraft there, it’s a good market and it’s still kind of regionalized.

MF: Is there a way to take advantage of any economies of scale there?
RJ:
Right now, what happens is the aircraft sits the weekend, and Sunday night we fly back. But what we could do is fly into Vancouver on Friday night, and then immediately do a departure out of Vancouver. Now we’re doubling our utilization of the aircraft, we’re doubling the revenues and there are efficiencies built into that because it all happens on the same weekend. There’s a bit of work to do before we get there, because before we sell that Vancouver flight we need to make sure the Calgary flight is going. But we’ve already built that into our website, and we’re planning to test that in the new year.

MF: How big could the business get?
RJ:
We believe there’s a $50 million business here, easily. That’s the dream. But I’ve run the numbers, and if we can optimize the aircraft over time that’s definitely achievable.

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