COVID-19 to Boom Private Jet Industry: ‘COVID-19 Free Travel’ to Turn Propeller18 June, 2020
No question that aviation industry has seen dramatic drop due to COVID-19 globally. The industry is expected to lose up to USD 84 million of cash reserve in this year as reported by IATA on its recent publication dated June 12, 2020. This can turn into new opportunities for some as the demand for air-travel is never likely to come to an end. Private aviation has experienced a spike in passenger willing to avoid crowdedness and indeed, to maintain a safer, flexible and more privileged way of travel. Even at the early stages of the pandemic the increase and market demand towards to private jet industry was apparent.
With normalization processes around the world passengers looking for safe travel options are getting more. A study by European private jet charter operator Globe Air AG shows that 270 person-to-person interactions is possible in airline passenger travel where one could be exposed to pandemic “less than 20 on private flights”. An Australian private jet operator recorded that there has been a considerable increase in demand that caused struggles to respond due to lack of flight crew or aircrafts. Likewise, a Singapore based operator had also reported almost 9 % surge in similar demand. Similarly, a US based private jet operator’s executive also stated that the demand has grown almost 20% and the price difference between private and airline has been declined due to health concerns compared to 2019.
Admittedly, private jets are not only used for business or holiday trips. As they are mostly referred as air taxi operators in general aviation regulations of many countries overall figures of 2019 shall be a tip to consider during and post COVID-19 times. Accordingly, it is estimated that the size of global air taxi is projected to hit USD 6,63 billion by 2030 according to a study conducted in 2019 and the passenger capacity of air taxi travel is expected to reach to approximately six passenger on board for each flight which is seen as one of the most lucrative drivers for the operators. This absolutely means that there is no reason to say private jet industry is to shrink due to COVID-19. It is foreseeable that the demand in air travel will experience a jump with the removal of the travel restrictions. On the other hand, the passenger confidence criterion, as one of the cornerstones of aviation particularly in COVID-19 times, will support the increase in demand towards private jets. Moreover, with the fuel costs being lower, private aviation would be even more beneficial for its investors and other stakeholder. Another advantage for a private operator is that it is much easier for such flights to obtain flight permission when compared to airlines conducting scheduled flights.
Given the fact that the private jet industry is highly linked to tourism and travel services, new cooperation models between tourism and aviation companies might be promising since COVID-19’s impacts on people and movement is likely to continue. Merger and acquisition transactions between air operators and air operator- tourism companies may impulse investors and this may result with positive big impact on both tourism and travel industries and creates a domino effect on industries related to employment and certification of flight crew, supply chain, hospitality.
An example from Turkey, an aviation hub and holiday destination, there are 194 air taxi operators as stated on annual report of Directorate General of Civil Aviation in 2019. Considering the facts and increasing share of private aviation, one might clearly state that Turkey has potential to create significant investment opportunities, since the country positions itself on highly competitive edge. Rentals, leases and jet memberships as a package of privileged services would be helpful for industry’s recovery in this difficult time and thus a business model of ‘COVID-19 Free Travel’ absolutely turn propellers to generate income.
Şafak Herdem - Ezgi Aysima Kır