Taking the temperature of the private jet market



If you wanted to take the temperature of the private jet market, there was no better place to bring your thermometer this week than to Corporate Jet Investor’s London 2021 online conference.

From the prospects of retaining new clients to the impact of industry consolidation and Sustainable Aviation Fuel (SAF), if it happens in private aviation (or is going to happen), you would have heard it analysed, interpreted and evaluated during the three days of the conference.

More than 570 delegates heard news and views from over 80 speakers. The audience was quick to ask questions and share their own insights and opinions during the presentations and in various networking forums.

The three beacons lighting up the prospects for the private jet market were the roll out of vaccine programmes rejuvenating private travel, the arrival of new customers (and hopefully their retention) coupled with the return of corporate aviation.

Hamish Harding, Action Aviation chairman, detected a “vaccine bounce”, as people became more confident about travel after receiving their injections. “As we see vaccines roll out, they [prospective buyers] want to be ready to move as soon as they can get their vaccine.”

‘Vaccine bounce’

Many speakers looked forward to a time when vaccines would free private jet travellers and c-suite executives (and some of their teams) from the tyrannies of yet another Zoom call meeting and foreign holidays foregone. ‘You can’t go on holiday on Zoom,’ pointed out several speakers.

The contribution of first-time clients was a recurrent theme of the conference, which began on Tuesday February 2nd. Andy Priester, CEO and president of Priester Aviation, reported his client acquisition rate last year was 270% above 2019. “These were folks who had not flown before and, seeing the value proposition, decided to spend their dollars in private aviation,” he said.

Caution was voiced by Kevin MacNaughton, Air Partner MD – Charter. While new business has genuinely risen, business flyers and existing flyers have kept their planes in their hangars for longer than previously. He did not expect corporate clients to return before the fourth quarter of this year.

One of the few to report growth in corporate aviation was Robert Gates, Global Jet Capital head of International Originations. “Towards the end of last year, we saw a lot of corporate activity, especially here in the US, despite flying hours being muted. I don’t know whether that’s because we are still providing operating leases and some others in that environment were not.”

Finding inventory has become one of the biggest challenges of 2021, according to Rebecca Johnson, JetHQ, president, EMEA. “It’s not only finding inventory but finding it at the right price. We’re having to look real hard.”

Turning to consolidation in the charter sector, Ford von Weise, Citi Private Bank, director, head Global Aircraft Finance & Advisory Services, noted the industry is changing more now than in the past 20 years. Fabian Bello, Journey Aviation CEO, thought consolidation – such as Wheels Up’s plans announced this week to merge with Aspirational Consumer Lifestyle – would create opportunities. He predicted smaller-sized operators could prosper through offering bespoke service. “We have an opportunity to make it, even if we don’t have 100 or 200 airplanes.”

Another 1bn gallons

Sustainable aviation received considerable attention, as speakers highlighted the need for action to forestall government regulation. Recent investments by SAF producers Neste and World Energy are predicted to deliver another 1bn gallons of supply within three years. But the price premium over fossil fuel remained a problem and some capacity went unused, said Jonathan Wood, Neste vice president, Renewable Aviation.

Banks could play a key role in encouraging sustainable aviation, said Marie-Laure Gassier, BNP Paribas, head of Business Jet Financing. While sustainability remained mainly the responsibility of manufacturers and regulators, banks could encourage their clients to use carbon offset schemes. It also made sense to set higher financing rates for older and more polluting aircraft, she said.

Brexit continued to tax the minds of those in the private jet market in the UK, Europe and elsewhere. Many questions remain unresolved and, with masterful understatement, David Kendrick, from the UK Civil Aviation Authority, noted: “This is phase one, we are still making progress here.”

The last session of the last day of the conference ended in upbeat fashion as Gates, from Global Jet Capital, invited delegates to look forward to the new ‘Roaring ’20s’ for business aviation. “There’s so much liquidity out there,” said Gates. “The world economy is coiled to really run. It’s going to boom. It’s just a question of when?”


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