Travelers quickly become accustomed to the comfort of private jets when they have the privilege of flying on these devices. This industry continues to gain altitude thanks to the pandemic. While regulars of the business class of commercial flights are among the new adopters, some wonder if they will revert to their old ways.
This clientele is critical for major airlines such as Air Canada, Delta Air Lines, Air France and Lufthansa, to name a few.
More willing to untie the purse strings, these travelers can account for between 55% and 75% of carrier profits, even if they only represent 10% of passengers, according to data from strategy consultancy McKinsey.
Manufacturers of business jets like Bombardier, Gulfstream and Textron have added to their order books, as the ultrarich have turned to this mode of transportation to get around.
At the same time, well-heeled travelers who cannot afford a private plane have turned to operators like VistaJet, NetJets, Flexjet and XO. These companies lease aircraft at hourly rates typically over US $ 1,000 or offer seats in jets.
PHOTO PROVIDED BY VISTAJET
Leona Qi, President of VistaJet’s US Operations
“In the third quarter, the volume of flights was up 19% compared to the same period in 2019, before the pandemic,” said Leona Qi, president of the US operations of VistaJet, in an interview with Press. More than 70% of the increase in volume came from customers who were not regulars. ”
VistaJet currently operates a fleet of 80 Bombardier business jets. It will have 16 more devices at the end of 2022.
For 2021, the aviation analyst and information firm WingX expects a 6% increase in activity compared to the volume recorded in 2019, when the market finally broke record levels in 2008.
This trend could continue with fears surrounding the Omicron variant. But in the industry, some customers are expected to return to the major carriers when international traffic eventually picks up.
“The airlines will in a way become competitors with us in an attempt to bring these travelers back to business class,” observed Bombardier President and CEO Eric Martel on October 28, during a conference call with the media.
Costly benefits
Airlines have not said their last word to demonstrate that they are making efforts to mitigate the risk of infection. For example, disinfection kits are available at their expense.
Despite this, the retention rate for new customers is expected to remain high, the industry is believed to be. In the United States, only 10% of people who could afford to travel on private jets did so.
“It’s a huge market that is not being served,” said NetJets president of service and marketing Patrick Gallagher in a recent interview with Press. I guess they [les compagnies aériennes] will [tenter de reconquérir les voyageurs d’affaires]. It will all depend on what they do to deliver different value for those first class seats. ”
While business aviation is gaining height, prices are still much higher. At VistaJet, for example, fares can be at least 30 times higher than a business class ticket.
The time savings are notable. There are several steps that travelers can take to get to the airport. They can also travel to their destination non-stop.
“In a private terminal, there are around 20 points of contact,” illustrates Mr.me Qi. When you choose a company [aérienne], that’s about 700 points of contact. A commercial flight is scheduled. No matter the time and place, it is. There is no flexibility. ”
Sustainable?
Brian Foley of Brian Foley Associates is among analysts who believe there is a risk of increased competition between airlines and business aviation.
It will always be more expensive to board a private jet, but more and more people are trying the experience, says the analyst.
Word got out. I believe we reach the peak [en matière d’activité]. For now, the airlines are weakened. They do not yet have the means to counterattack.
Brian Foley, of the firm Brian Foley Associates
For her part, Isabelle Dostaler, dean of the Faculty of Business Administration at Memorial University in Newfoundland, sees the two sectors competing, but wonders for how long.
Traditionally, business aviation is dependent on the economic context, but the pandemic offers the sector “better visibility for the years to come”, estimates the expert.
The lack of international links around the world also works in favor of the industry, believes Mr.me Dostaler.
Who can afford to fly in a private jet?
PHOTO MARTIN TREMBLAY, PRESS ARCHIVES
A Bombardier Global 7500
You have to be well off, but profiles may vary.
The ultrarich
You have to be wealthy to afford a private plane. A new aircraft can cost up to US $ 75 million (like Bombardier’s Global 7500). According to Honeywell, annual operating costs are approximately US $ 4.5 million.
The well-to-do
They are used to first class on international flights, but don’t want private jets. They go for the operators. VistaJet members, for example, have to commit to a two- or three-year contract. The bill is therefore high.
The occasional
These travelers travel less, so they opt for companies like XO by reserving a seat in a private plane. The price of a seat varies depending on the route. It costs around US $ 1,200 to fly between Florida and New York.