Private Aviation: The New First Class

Charter travel is the new first class. In 2021, 3.3m private flights took off around the world. That’s a record. The previous one was set in 2019. 

Barring the unexpected, can we expect this trend to continue? According to a recent report on private aviation, the global market for ‘passenger chartered air transport’ is expected to grow by 7.1% during 2023 from U$49B to US$53B billion. It is expected to reach $67B by 2027.*

What’s driving demand for aircraft charter services? 

Private or business aviation in the US alone now accounts for a quarter of all air traffic in the country. This is up from around one in five flights before the pandemic. What happened? Private travel, it seems is as addictive as any other agreeable activity. 

Many who switched from first or business class to charter during the pandemic to avoid long lines, crowds and hassle have discovered that it has much to recommend itself. No waiting or ‘dead’ time at airports, fewer touch points as private planes usually fly from small airfields rather than commercial airports, and of course the privacy and convenience. Passengers arriving at the airfield or fixed based operator are dropped off at the jet. They meet virtually no one but the crew. The same happens at the other end when they arrive at their destination. 

And now that the pandemic is over? 

Post-pandemic, ‘revenge travel’ took off and with that came a massive spike in private travel. One company racked up 30,000 flight legs in 2021, up from 19,000 in 2019. While the travel frenzy has since calmed, a new normal has emerged. Private aviation now has two customer bases. The old one, comprising corporate travellers, heads of state, celebrities, and royalty – the ultra-wealthy jet set. And the merely wealthy, who have discovered private travel appreciate its benefits but choose to use it selectively. 

What’s making charter travel affordable? 

The changing shape of supply. The cost of ownership and charter travel is falling as new aircraft that are smaller and more efficient to fly begin to replace the old fleets. More and more companies are using sophisticated technology and powerful applications to track aircraft availability and pricing in real-time, realising vast efficiencies in flight scheduling and allocation. The cost savings can then be passed on to the customer effectively broadening private charter’s customer base. 

Increased demand and a different bands of affordability have led to an explosion in membership programs. These allow companies to offer their customers a level of stability – both in terms of availability and costs – as well as access to a global and comprehensive network of private aircraft. This option is popular with the new class of private traveller as are jet-card subscriptions – which are like prepaid cash cards but for hourly jet travel. Those who can, opt for ‘fractional membership’ that gives them fractional ownership of aircraft. 

What’s the fallout from this uptick in private aviation? 

It’s great that private travel is no longer the preserve of corporate travellers, heads of state, celebrities, and royalty. But this dramatic shifting of the demand curve comes with consequences. 

A lot of shortages. The sudden and dramatic increase in demand for private jets just as supply was slowing and parts inventories shrinking combined with staff shortages is squeezing the industry from all directions. 

On the plus side, the market for used jet aircraft has taken-off … . Summer 2022 saw prices for single flights spike up to 40% during summer 2022. 

The domino affect of that is good business for flight brokers – who work with multiple services to find the right service for clients. Like an Expedia for private travellers who are driving demand for everything from inter-city travel in the US, transatlantic European breaks and group charters to mega events in the Middle East. The latter have drawn huge crowds from India and Pakistan as well as the UK and US. 

What’s the future of charter travel looking like? 

Its looking promising. People who came for the need will stay for the convenience. The flexibility of private travel has a certain attraction that’s hard to ignore. More and more people are combining business and pleasure travel. The market for expeditions, luxury and resort travel is huge and booming. International group private charter is also growing rapidly as the world rushes to attend a packed calendar of global events and conferences often with friends and family in tow. 

So far North America remains the largest market for private charter followed by Asia Pacific. We expect the Middle East and South Asia to see rapid growth in the coming years as regional investments in travel and tourism attract private travellers in ever larger numbers whether for luxury vacations to exclusive resorts or multi-city expeditions or group charter for the rich ecosystem of mega-entertainment mushrooming in the region. For instance, the number of private aircraft in the UAE is expected to increase from 150 currently to 250 by 2025

We expect business travel will also deliver significant growth in the coming decade as the economic diversification strategies being pursued by both Saudi Arabia and UAE boost foreign direct investment and an inflow of talent to the region. 

*Market figures reflect estimates for Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, and USA.

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