Air Charter Service predicts more new customers, bankruptcies for 2021

By Doug Gollan, January 15, 2021

Private jet card and on-demand charter broker ACS expects a rebound of business travel, more bookings from travel agents, and instability for the private aviation sector

Air Charter Service has 27 worldwide offices, spanning all six major continents arranging private jet, commercial airliner, and cargo aircraft charters and onboard courier solutions arranging over 23,000 charter flights in a typical year. Recently, Andy Christie, group private jet director, shared his view on the private jet travel outlook in 2021. Below are some highlights.

What do you see as the mix of business and leisure travel going forward?

Due to the impact of the pandemic on business travel, throughout 2020, ACS has seen a decline in business-related bookings of minus 31% compared to its 2019 figures. This is a stark contrast to the positive significant increase in leisure inquiries (+49%) and bookings (+14%) that we have seen in 2020.

We expect to see private business travel improve substantially in 2021 and return to approximately 85% of the levels of business travel bookings that we saw during ‘normal’ times in 2019. However, we expect leisure travel numbers to make up for this shortfall in business travel. As companies re-engage with the world, they will find that disruption to scheduled services will make business itineraries difficult – as a result, businesses will start to turn to charter despite the inevitable economic problems that the world faces.

How has the influx in new customers translated into actual flights?

ACS has seen a 25% increase in new customers booking throughout 2020. However, we expect this larger customer base will be traveling less on average next year compared with the average customer in 2019, taking smaller numbers of longer trips. Following months of lockdown, people can’t wait to travel again and are wanting to go on trips for a longer duration to make the most of their time in a destination. The introduction of remote working arrangements is also likely to contribute to the increase in the number of people traveling for longer.

We expect the trend of new customers booking to continue in 2021, with a further 25% increase in the number of people opting for private air charter next year. However, as we expect these new clients will be booking fewer flights per customer, we are predicting the total number of bookings across the market to remain constant with 2019.

Which destinations do you think will be most popular in 2021?

Mexico and the Caribbean will always be strong end destinations for American leisure travelers. With relatively low coronavirus numbers and highly tourism-dependent economies, many Caribbean island nations like Antigua and St. Lucia started to welcome back international tourists for nonessential travel as early as last June. Despite global bans on travel and ongoing border closures, travel between the United States and Mexico has also continued relatively unrestrained through 2020. We see this interest in travel to Mexico and the Caribbean continuing in 2021, as we predict that international travel may remain a little slower this year. Travelers will prefer taking trips closer to home and more familiar destinations for their first vacation, before reaching further afield.

How do you see booking technology impacting private jet charters?

Owing to a lack of travel confidence in 2020 due to travel restrictions being put in place and ever-changing government updates resulting in vacation cancelations, people will be looking for a more personalized, trustworthy service when booking trips in 2021. This may play into the hands of high-end travel providers, and less so with impersonal booking platforms. Despite only seeing a 5% increase in online inquiries in 2020, ACS saw a 25% increase in new clients overall. This is because people increasingly want to speak to an account manager in person, whereas previously they would have dealt with us digitally.

Do you expect to work more closely with luxury travel agencies?

ACS is also expecting an approximate 30% increase in the numbers of high-end travel agents booking private jets. With the need for a more personalized service increasing, high-end travel agents offering bespoke itineraries will see a resurgence in demand. With the continued disruption to the scheduled air network and the lingering hygiene fears surrounding commercial aviation, we expect more of these agencies to turn to private air charter to create the bespoke travel experience that their clients demand. This has already been illustrated by the tremendous uptake of ACS’s private jet training events for travel agents in December and interest in attending further events next year.

Air Charter Service introduced a carbon offset program last February. What type of interest are you seeing from customers in about sustainability?

The new customer base of clients choosing to travel by private jet is more conscious and aware of carbon offsetting and its value.

Despite the strong rebound of private aviation compared to other travel and hospitality sectors, after JetSuite, are you concerned about more bankruptcies?

We expect to see a number of insolvencies in our industry for those business models which required high levels of growth in order to stay in business. There are a number of companies that have invested heavily in gaining market share to make highly leveraged business models work. The reduction in sales earlier in the year will have caused serious damage to their already finely balanced finances. We are already seeing a reduction in marketing spends from these companies who often portray the results of heavy marketing investment, as well as loss-leading pricing, as illustrations of the success of their business model in order to generate new investment. Without the new customers generated through these strategies, the rate of growth will slow and, for some, that will mean serious cash flow issues which may lead to insolvency.

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