The private jet industry is growing steadily and one Los Angeles company is tapping into an even bigger appetite for luxury travel.

Trans-Exec Air Service, whose ultra high-end fleet of executive jets is based at Van Nuys Airport, recently took delivery on its ninth Gulfstream jet, a G550, and is ready to take another later this year a total investment of more than $100 million.

The second delivery will boost the size of the fleet to 10 far-from-ordinary jets, equipped with amenities that include dual lavatories, gourmet galleys and luxury sleeping accommodations for six to eight people. But how many of the planes, which cost about $6,000 per hour to fly, is enough?

“It’s a delicate balance in this business and a lot of people don’t get it right,” admitted company President David Bilson.

Sales in the private-jet industry are expected to reach a record $17.6 billion this year, up from $15 billion in 2006 and $12 billion in 2005 no wonder in a day when security concerns have made flying unpleasant and less than reliable.

However, Trans-Exec operates in the rarified air space of executive charters and fractional jet ownership in which well heeled executives and private parties grab a jet at the closest airfield and fly sometimes on a whim to destinations that traditional commercial carriers may not even serve.

The industry’s 800-pound gorilla is Berkshire Hathaway Co.’s NetJets Inc., which offers fractional ownership and rental of its jets. Fractional ownership starts at one-sixteenth of a plane, which gives the fractional owner roughly 50 hours of flying time per year. The company, which operates globally and has a fleet of some 600 planes, has been owned by Warren Buffett’s investment holding company since 1998.

AvJet Corp. of Burbank and Blue Star Jets Inc. are major jet charter operators in the L.A. market. But rather than operating as a traditional jet charter or fractional enterprise, Bilson’s company is something of a hybrid. It operates something like a country club with membership limited to between 30 and 40 members who sign on for one- to three-year commitments, starting at $600,000 and ranging up to $2.5 million a year based on use.

Like a country club, members pay the fees each month, and most stay on for life. And the amenities are similar too, with the jets featuring private bedrooms, $1,000-a-glass champagne, fully-equipped spas with estheticians and gourmet cuisine. Bilson said there is often a waiting list.

Born from necessity

Bilson got involved with the company back in 1979 when it launched as a straight charter operation out of Van Nuys Airport. Bilson, 16 years old at the time, had been working washing airplanes for a small flight school when one of the pilots decided to start a charter company, and hired Bilson as his first employee.

As a typical charter firm, the company largely flew corporate execs and wealthy individuals around the country, and also had contracts to fly helicopters for local TV news stations. The company bought its first plane when a wealthy heir wanted to sell a plane the company had managed for him. In 1991, the firm bought its first luxury jet.

“When we bought our first Gulfstream, I realized I had to make the huge bank payment on it, and it seemed unwise to rely on unpredictable off-the-street charter business,” Bilson said.

So he offered four of his existing charter clients a trade of profit margin for cash flow in the form of a commitment for a certain amount of flying a year for a flat fee. Admission to Trans-Exec’s club is exclusively through invitation by Bilson or through the recommendation of a member.

“I figured that it was going to average out sometimes there will be 12 people flying having a steak dinner, so I will lose a little money, sometimes one person eating fruit so I make some,” he said. “Sometimes you have to take a loss to make money in the long term.”

Bilson called flat-fee use the “priority program,” and officially launched it in 1992. It quickly got so popular he didn’t have time for off-the-street charter. The plan seems to be paying off. Trans-Exec has seen double-digit profit margins for more than a decade.

That’s pretty good, in a business where margins are typically 2 to 3 percent, according to Bilson.