October 24, 2024
As the warm days of summer move the crisp weather of fall, at least one association boss is warning that the private jet rebound could be set to stall.
David Edwards, CEO of the Air Charter Association, a European trade group representing over 250 brokers and operators, said he is concerned about members hyping the nascent private aviation rebound. He pointed specifically to companies talking up increases in call volume to actual purchase levels of private flights.
Speaking during Corporate Jet Investor’s Town Hall, Edwards said the group has asked members to think about the repercussions of saying everything is back to normal. While the business has recovered from April lows, activity is still as much as 20% below 2019 levels.
“There’s elements of positivity without a doubt. I think we need to be realistic. One of the things we really asked our members during the summer is, can they think before they post. When we sit down with governments…we tell them about the air charter industry. Sometimes I go into those meetings where I presented with ‘facts’ that have appeared in newspapers which say everything is back to normal. We’re all fine.”
Edwards said, “While it’s been a not too bad summer, those numbers are being driven by things outside our control, scheduled airlines not doing anything like they used to. And we need that to continue for the rest of the year.”
He predicted, “By quarter-four when all of the government support disappears, that’s when in our traditional quiet time, we’re going to be having the challenge of our life…While it’s okay at the moment, as the airlines begin to provide more services again, where are we as a result of that?”
Edwards said feedback from members is that the recovery to date is being driven by leisure travel, raising the question of how long and strong that push can remain. And, when will business travel rebound?
The latest WingX weekly tracking report shows the concerns may be well placed. Deficits in the U.S. moved from 30% in June to 21% in July. However, flying so far in August has only ticked up to 19% below pre-COVID levels.
There are bright spots. Texas is back to 87% of normal activity this month. Private jet arrivals into Aspen are up 40%, Telluride arrivals increased than 90%.
On the flip side, Florida is going backward. Flights so far this month are down 2% compared to July. WingX said there is also softness in California, and New York remains in a funk.
By contrast, the Europe private jet market is up 2% in August compared to the same period last year.
Edwards qualified his outlook by adding, “I’m talking as a travel body. I’m not talking as a commercial salesperson. If I was a commercial salesperson I would say everything is great. As a trade body talking to the government, I have to give them facts.”
Adding to the strain, said Edwards, is pricing drops. He said reports show rates down by as much as 15% in a “tight margin business.” He added, “There isn’t that much money in operating aircraft.”
He warned operators that are discounting prices are creating a slippery slope for the industry. “If people want to sell themselves for less than costs, that’s up to them, but it doesn’t help for the longterm future of a market. If that’s how we are selling it to people who are new to the industry, as the cheapest way of getting around, that doesn’t set up the future in a great way. You can’t run these (expensive) assets at very low prices.”
He warned the industry that releases hyping the recovery aren’t just being heard by consumers. He said regulators and governments that will have to decide on further assistance read the same articles. So far, the industry has recovered from a drop of nearly 80% at its lowest point in April.
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