Client Affairs
Private Jet Sector Soars In Tough Times

Commercial airlines have been hammered by restrictions on air travel due to anti-COVID measures, but it appears that private jet usage has filled a gap for those able to afford it. However, they still have to wear masks at airports.
Lockdowns and restrictions on conventional civil aviation have
caused a boom in the world of private jets, ZEDRA, the corporate services,
funds and wealth services firm, says.
As noted by this industry last
year, the world’s airline sector has been hammered by the
COVID-19 pandemic, forcing some carriers to bring out the begging
bowl. The jump to remote working fixes such as Zoom or Microsoft
Teams is bad news for business travel – at least until people
tire of these platforms. Aircraft are now rarely on the ground
with demand up by 70 per cent since the third quarter of 2020, as
business owners and VIP travel gets going again, ZEDRA said in a
new note.
The world is still some way from anything like the pre-COVID-19
freedom of travel but, as appears always to be the case, those
with resources have found a way to move around more easily than
the wider population. For those who are rich and connected
enough, private jets have their place, even if it means coping
with the same security grind as the rest of the population.
Flying will remain a chore for a while, so one might as well make
the experience as pleasant as possible. And if travellers can
avoid crowds at airports, it also cuts virus risks.
“At the start of lockdown in March 2020, we saw all sectors slow
dramatically, as it was not clear at that time how the new market
reality would look. Now twelve months on, it is clear that
commercial passenger aviation is likely to remain subdued for
some time, even with the vaccine programme rolling out
successfully in the UK, but demand for private jet ownership has
soared,” Andrew Wilson, head of marine and aviation at ZEDRA,
said.
“In particular, we are seeing increasing enquiries around new
ownership structures, as leasing companies move assets, i.e.
aircraft, away from commercial airlines into the hands of high
net worth and ultra-high net worth private clients. These groups
may be buying distressed assets or repurposing an asset, either
way, we have seen a sustained increase in the level of enquiries
and new business around the registration of private jets, the
demand for advice on how best to hold this asset and of course
jurisdictional registration questions,” Wilson said.
The squeeze on civil aviation has benefited private jet
operators. One such firm, Switzerland’s LunaJets, reportedly sold
15 per cent more flights than in 2019. In 2020, Dubai private jet
industry logged a 21 per cent growth compared with the previous
year, with the most growth happening in the fourth quarter of
2020 (source: Aerotime Hub, 13 February). The report said that by
August last year in the UK, demand for private jets was just
below normal levels while commercial passenger jet flights
crashed by 65 per cent.
Demand for traditional private jet ownership is also soaring,
both ZEDRA and FlyEliteJets note, as business leaders considered
adapting to the new reality of border controls and enforced
quarantines by shifting international business meetings onto a
day-return basis. At the same time, private helicopter ownership
and usage is booming, ZEDRA said.
The business jet market was valued at $15.05 billion in 2020. The
market is expected to reach about $18 billion by 2026, with a
compound annual growth rate of about 3 per cent between this year
and 2026, according to a recent report by Mordor Intelligence. To
set that figure in context, the total aviation market was worth
$169.72 billion last year.
It said: “Over the past few years, there has been a significant
increase in high net worth individuals and ultra-high net worth
individuals globally. This is generating demand for private
travel, subsequently driving the procurement of private jets with
enhanced cabin interiors.”
The report said that in terms of market share, few players, such
as Bombardier, Textron, Gulfstream Aerospace, Embraer, and
Dassault Aviation, among others, dominate the market.