The Price Of Private
Often, time, necessity, or even a global pandemic brings about changes. The aviation industry has never been the same over the past 20 years. The September 11th Attacks, followed by the economic meltdown of 2008 forced the industry to accept new realities, thus forcing radical changes to not just generate profits but remain relevant. Although most major airports are showing signs of some recovery, it is time to embrace a new normal.
Never before in our modern times has anything such as the COVID-19 Pandemic affected the aviation and travel industry as we’ve seen. At the beginning of the Pandemic virus, many airports were seemingly ghost towns with the
looks of abandonment. Now that some states have begun to reopen, many airlines are now offering creative incentives to regain passengers. In the past month of May TSA screened 500,000 passengers. Issues such as social distancing still remain a serious factor as there have been spikes in many states.
The counter measure to the major commercial airlines’ policies has been in the private travel sector. Historically, private jet
travel was for the upper bracket income affluent. However, in response to the current Pandemic crisis private jet travel is now becoming “ubered”. NetJets and XO are redefining what it means to travel via private jet. According to Andres Morales, the executive vice president of global operations for the aviation consultation company Skyline Group MC. “The private jet industry is currently experiencing a boom, capitalizing on the commercial air travel slump. With more companies and individuals buying private aircraft, there are more jets flying under capacity so they look for different ways to offset their cost of ownership. That has resulted in an increase in the accessibility to flying private through different digital platforms that connect the consumer to a private aircraft.”
What’s driving this trend in private travel is that for starters, passengers are looking to avoid crowded airports and terminals, and pressurized aircraft cabins in the face of the COVID-19 outbreak. According to GlobeAir, a European charter operator, Possible exposure to COVID-19 Coronavirus is 30 times lower when flying privately. In this post 9/11 era of travel, long lines at TSA are frustrating and in the case of those who can afford better, TSA lines are simply horrific. Second, commercial airlines are dropping less profitable routes to smaller airports which has now complicated commercial travel to second-tier destinations. As a result, this has positioned private travelers a viable option. And third, affluent passengers who usually travelled business class are getting fed up with flying commercial. As there is no immediate cure or treatment for the Corona Virus, the demand for affordable private travel will only increase.
Flyers still need access to second tier areas which are home to smaller airports which have been cancelled by some carriers. This is an ideal profitable scenario for private jet owner. In the state of Alabama, private jet travel is a very viable option for flyers whose destinations are just outside of the major cities as the FBO’s in
those areas are more than capable of handling the increased passenger traffic. Recently, the U.S. Travel Association declared the industry "in a depression." At the end of May, the number of passengers was 86% lower than last year, even though larger numbers of passengers began flying again. The Official Aviation Guide (OAG), a global travel data provider, has found that U.S. airlines cancelled nearly 1,700 routes between January and May.
Another asset is the recent drop in fuel. At the beginning of April, North America fuel prices were down 60.1% year over year and 38.3% compared to a month ago, although week-over-week they inched up by 1.4%. In late March Congress passed the CARES Act which consisted of a $2 trillion bailout. Airlines have received $50 billion of that amount which includes $25 billion in loans and loan guarantees from the federal government, and another 25 billion in grants. The CARES Act also waives segment fees and the 4.3 cents per gallon portion of the fuel tax. Fuel is the number one expenditure in operating aircraft. As fuel prices have lowered, so will air fares.
Amenities are a must. In an era where the major airlines are charging rising fees for comfort as
well as the leg room debate, private jet travel offers a solution. In-flight entertainment screens in many cases have been replaced by personal device holders. Luxury lounges are
a major amenity offered by most private aircraft. Many lounges are equipped with recliner-style seats, plush couches, and entertainment consoles. The food served on private aircraft tend to be better and compliment a better flying experience much different than mass produced commercial food and beverages. Comfort, convenience, and privacy are the main gains as well as direct routes which shaves off time. With private jet fares within reach of the average citizenry, as well as the amenities available, the demand for private jet travel will only increase in these ever-changing times.