Who’s in the back today?
In 2018 BC (Before Covid-19), the National Business Aviation Association published research showing that high-ranking executives – C-suite and board directors – only accounted for 56% of flights. The rest of the time business aircraft were carrying technical specialists, middle managers and customers. Next time they repeat it, middle management will make up an even higher percentage.
Companies are flying many first-time business jet users as they try to safeguard their employees against Covid-19 and, possibly, themselves against the prospect of potential litigation if employees were to contract the virus on a commercial flight. That is, if they could find a commercial flight that is still operating to their preferred destination.
It’s a trend highlighted by Suzanne Meiners-Levy, managing partner with Advocate Consulting Legal Group, at Corporate Jet Investor’s fifteenth Town Hall online meeting last week. “A lot of our aircraft used to fly with just the owner and a spouse or two high level executives on the aircraft [before Covid-19], while staff would fly commercially,” said Meiners-Levy. “Folks are doing that less now, which means more passengers on a flight, which is positive from a tax perspective and we are seeing inquiries about that.”
Further evidence comes from a veteran broker who believes personal motivation lies at its core. “We are seeing companies that have only previously used the aircraft for senior managers using it for more junior staff,” he told Corporate Jet Investor this week. “I have had one owner saying: ‘I don’t want my staff exposed to Covid-19, both for their families and because they will bring it back to me!’”
Another trend is the rise in demand for one-way flights, as confirmed by Jet Edge International. “The one-way travel trend that has been trending for years has only been accelerated by Covid-19,” its CEO Bill Papariella told us. “Our platform has created a vehicle for aircraft owners to participate in that market, while also allowing us to deliver an institutional charter product for the charter community.” The US company now operates the largest combined super-mid and heavy jet on-demand charter fleet in the US, with its overall fleet numbering 85 aircraft.
But the biggest trend is the arrival of new customers. And that leads to the biggest question: will they remain customers? Patrick Gallagher, President of NetJets – the world’s largest business jet operator is optimistic. “New interest in private aviation is up like nothing I’ve ever seen before,” he told delegates at our first digital conference CJI Global 2020 last month. “And now things are beginning to thaw out and the markets are starting to re-open, we are beginning to convert these people to customers.”
Gallagher believes many High Net Worth Individuals (HNWI) who have the means to fly privately previously regarded it as a luxury they didn’t need. “Now, they look at it as a necessity, if they want to see their grandkids again or move between homes.”
So, while the cabins of business jets will always remain exclusive places, they are becoming a little less exclusive than they were before Covid-19.