Buy the ticket, enjoy the ride
NOTE: The below originally appeared as the editorial in our November 13 One Minute Week newsletter. To find out more, and sign up for free, please click here.
It has become a tradition for us to be the grumpy publication at air shows. Other magazines have headlines saying turnaround, bouncing back and upturn, and we get to talk about flat markets and the IMF saying global growth is slowing. And, sadly, now is not the year we change.
Rolls-Royce this week said that they were less bullish about business aviation. Warren East, the CEO of Rolls-Royce said: “There are are fewer people buying new small jets, and those that have them are not flying around in them as much as they have been in recent years.”
Alireza Ittihadieh founder of Freestream Aircraft agrees: “It may not have felt like it but the peak of this cycle was in 2014. We are now heading into the downmarket. It is a new dawn, a new reality and we need to embrace it even if we wish it was not true. We need to wake up to the new dawn.”
We are not going to see a sudden drop in the market as in 2008 and there are lots of things to get excited about at NBAA. In the run up to the boom there was a lot of talk about growing the market and finding new customers. We will see more of this at NBAA this year.
Online charter sales are rising thanks to companies like PrivateFly, Victor, Jetsmarter and others. At NBAA, two new marketplaces Stratajet and Stellar will also be fighting it out. Stratajet has been public about its ambitions for a while. Stellar has been in what Silicon Valley companies call Stealth Mode (it broke this at CJI Miami).
At past NBAAs, XOJET founder Paul Touw got attention for ordering aircraft. This year he will get it with Stellar. He says it will allow operators to truly benefit from revenue management systems for the first time.
The industry is still recovering from the economic disruption in 2007 and 2008. Today’s charter customers are often tomorrow’s jet buyers. Disruptors like online charter may help drive the next upturn.