It is easy to hype up demand by talking about charter requests or new enquiries. But if you are looking for hard evidence of the demand for private jets, NetJets has provided it.
The fractional aircraft company has stopped selling entry-level Citation XLS or Phenom 300 jet cards, shares and leases. NetJets had already tried to manage demand for light jets by removing peak-day travel from new sales. Now if you want a light jet product, you need to join a waiting list.
“In 57 years, the company has never seen so much demand,” says Patrick Gallagher, president sales and marketing, NetJets. “But we will not damage customer experience by over selling.”
The operator flew 20% more flights in May this year compared with the same month in 2019. In June they were up 36% on June 2019 and travel around the July 4th holiday was up 45%.
Gallagher stresses that the company is still selling shares, cards and leases on larger aircraft and is seeing strong demand from corporates and as Europe opens-up.
Gallagher believes the demand NetJets is seeing now is not just a summer fad. In fact, its biggest concern is for the US spring in 2022. This is traditionally the busiest period for US charter. It is also a quarter where the weather often disrupts flights. Despite NetJets’s fleet of 450 QS-tail aircraft in the US, 100 in Europe and well over 200 aircraft managed by the Executive Jet Management subsidiary, Gallagher is worried that there will not be enough aircraft available for charter on peak days if they were to continue selling at the same pace.
“We are in a strong position as a buyer of third-party charter when needed to supplement our fleet, but there is finite capacity,” says Gallagher. “They are only about 4000 Part 135 [charter] aircraft in the US and only a small portion of that meets our criteria and on peak days we do not want to be in the position where we cannot satisfy customer expectations.”
This is despite growing its fleet. NetJets has already added 20 aircraft to its fleet in the first half of this year and plans to add 35 more new aircraft to its fleet in the next six months. In 2022 it plans to take more than 60 new deliveries. But this $2.5bn of new aircraft it is not enough.
Most of the new demand has so far been from individuals but Gallagher says the company is well-placed to manage corporate travel which is now back to its pre-pandemic levels and balances demand through the week. NetJets has also been working on efficiency and building out its service hub network which partners with maintenance companies like Gama Aviation’s Jet East as well as OEMs to make aircraft available faster.
Gallagher, who has been in business aviation for 20 years (and at Marquis Jet/NetJets since 2008), says he has never seen a market like this. “The demand is amazing and we realise it is across the industry and not just at NetJets. It is a long time since we have seen FBOs and maintenance shops so busy. It is very exciting, but we have to keep our standards,” says Gallagher. “We are building a business model for all economic conditions.”
Despite NetJets’s fleet of 450 QS-tail aircraft in the US, 100 in Europe and well over 200 aircraft managed by the Executive Jet Management subsidiary, Gallagher is worried that there will not be enough aircraft available for charter on peak days if they were to continue selling at the same pace.