Brian Foley: ‘Charter industry could be setting up to fail’
Some business jet charter providers could be setting the industry up for exclusion from any future government aid programmes, after over optimistic assessments about the sector’s prospects given to media outlets, warns aviation consultant Brian Foley.
Commenting in the publication Forbes, Foley said: “Based on the comments and press releases of a few business jet charter providers, one could be led to believe that the industry is on fire, as well-heeled travellers avoid the airlines. While there may be some outlier examples, the data generally does not support these claims, and worse, the unsubstantiated exuberance may be setting the industry up for exclusion from any future government aid programmes.”
Foley noted there is growing concern that summer may have been the high point for the aircraft charter season. “Once the frolicking at the beach is over and people return home, the focus normally turns to business trips in the fall. However, all one needs to do to predict the strength of the upcoming business travel season is to look at their own trip calendars, which for most road warriors are pretty scant compared to last year.”
Richard Aboulafia, Vice President, Analysis, Teal Group Corporation, told Corporate Jet Investor, “I’ve known Brian for 25 years and I don’t think I’ve ever disagreed with him!”
Right now, the greatest risk to the industry concerns macroeconomics, said Aboulafia. “The present business aviation downturn reflects the pandemic and associated travel concerns. We still haven’t been hit by the decline in corporate profits and equity markets that will probably outlast this pandemic. That will impact business aircraft orders.”
Aboulafia continued: “Of course, the greatest opportunity is if, somehow, that doesn’t happen and we get an economic recovery, a travel recovery, and no damage to company finances or stock prices. Not likely, but not impossible.”
Foley concluded, private aircraft charter has recovered significantly more than the airlines but still is not back to normal levels. While summer travel may have aided the recovery of business aviation, the upcoming business travel season could erode any gains.
With the business travel season just about to start, Aboulafia predicts that October is going to be a “big one” for the segment: “We’ll start to know more about any second waves, or treatments, by then, and we’ll be better able to gauge the full impact of the pandemic to the economy. But really, all months are important these days.”