US CHARTER SEVEN TOP OPERATORS

US Charter: Can its climb continue?

SEVEN LEADING OPERATORS LOOK AHEAD TO 2023

Covid-19 drove demand for US private jet charter to new heights. But what lies beyond the peak? To find out, we asked Clay Lacy, flyExclusive, Jet Aviation, Jet Linx, Solairus, VistaJet and Wheels Up. Words: Conor Feasey, Megan Kelly, Yves Le Marquand, Alasdair Whyte and Mike Stones

DEMAND FOR PRIVATE jet aviation scaled new heights during the pandemic. Leading the ascent were Part 135 charter operators. It’s not difficult to understand why, as health-conscious travellers sought the sanctuary of private jet cabins. Slashed airline schedules drove even more High-Net Worth Individuals (HNWI) to charter private jets – many for the first time. Less clear is what happens next – particularly if the US falls into recession.

At least there’s no doubting the surge in new business. Clay Lacy reports a 20-50% increase in new customers over the past 24 months. Solairus says new clients represent about 20% of its business growth this year. And flyExclusive has been so busy this year it hired 100 new pilots already with another 50 currently undergoing training. That’s in addition to more than 250 mechanics and service operators. VistaJet highlights the return of corporate clients as top executives (and increasingly their more junior colleagues) dispense with Zoom and take off to visit clients across the country.

Charter companies were so busy, some started to (temporarily) decline new business. Another factor is fatigue. Charter operators and their staff are tired – weary from the relentless pace over recent years. Jet Linx highlighted the toll taken by the large spike in the number of hours each month. It wasn’t just the hours, but the number and type of legs flown. Supply chain delays and frustrations have only added to the strain.

So, has demand for charter truly reached its peak? A definitive yes is the answer from one informed industry insider, who tracks weekly business jet movements. Richard Koe, MD, WINGX tells CJ: “Business jet traffic in the US is clearly past the high point in the post-Covid bounce, in March 2022. That peak was largely driven by charter demand.”

Owner and corporate flight activity was a secondary wave in the recovery and is still trending above 2021 levels, he says. “By comparison, branded charter activity fell below August 2021 levels and is heading down by almost 10% in September 2022, year-on-year.” More happily, US business jet activity in the first three weeks of September was still 29% above September 2019. This is not far off the year-to-date trend compared with 2019. Charter accounts for about 36% of all business flights.

WINGX expects recent gains to ebb, with charter falling back most. US flight activity is expected to end the year close to the full year’s activity in 2021, but still 20% up on pre-pandemic 2019. Then, there is the R word – or recession which, while far from certain, is worrying many. “We would also expect the post-covid bounce to cede more ground as we get into 2023,” says Koe. “Macroeconomic impacts, most obviously the slowdown in business deals, corporate profits and instability in equity markets, are likely to start eroding demand for business aviation.”

A key test next year will be the accuracy of charter companies’ demand projections, according to WINGX. “There will be a challenge for the charter fleets if they have been too optimistic in terms of sustained demand-growth and start to see underutilised capacity,” says Koe.

Does that mean more consolidation? Last year saw big acquisitions including VistaJet acquiring US firm Jet Edge and Europe’s Air Hamburg. Jet Linx acquired Boca Raton’s Southern Jet in March and four others in the past seven years. Could more deals be on the way in 2023? Koe believes the speed of the airlines’ recovery will be a key factor determining the future of Part 135 operators next year. “The biggest support for the charter business is the disarray in airline capacity. On the downside, the recession may accentuate the public critique of rich people flying private, especially with the added toxicity of climate pollution.”

But once clients – particularly new clients – have tried private aviation for the first time, it’s difficult to relinquish its many benefits, Koe concedes.

So, let’s take the temperature of US business with seven leading charter operators. We also look further ahead to what the next 10 years may bring.

Supply chain challenges have frustrated charter operators and, in some cases, degraded services.

Clay Lacy – ‘Market in a constant state of correction’

Joe Barber, Clay Lacy: “Once customers purchase a business aviation product or service, they are bitten by the figurative bug...”

A NAME SYNONYMOUS with US private aviation, Clay Lacy founded Clay Lacy Aviation in 1968 as one of the first jet charter operators west of the Mississippi river. Today, the company offers charter, maintenance and management services at 31 locations from Hawaii to New York State.

The pandemic forced many to rethink how they travelled for business. With record highs reported from various sectors of business aviation, the charter market was no exception. But the success hasn’t come without complications.

“The 20-50% increase in new customers over the past 24 months has landed existing aircraft owners and charter customers in heated competition for access,” Joe Barber, senior vice president of commercial operations, Clay Lacy tells Corporate Jet Investor. “It’s a group that is creating scarcity for the existing customer base.”

This has had a knock-on effect on the charter market. “That surge in demand, and supply chain issues on top of that, has driven prices up in a long overdue correction. I expect that pricing is going to be elastic, but the customer base will be steady.”

“Some businesses have shown they will operate at a loss to keep their doors open”

Joe Barber, Clay Lacy

Private aviation is not typically a service companies or individuals use just once. “Typically, once customers purchase a business aviation product or service, they are bitten by the figurative bug and will likely continue the habit,” says Barber.

In terms of retaining new clients, the National Business Aviation Association (NBAA) Certified Aviation Manager (CAM) says that the industry needs to focus on providing a great and unrivalled experience for its customers. “They are savvy to know when they have good service, even when things don't necessarily go as planned.”

Barber says many new charter customers have moved from company to company or product to product. “In many cases, they have a legitimate reason, like safety, cost or service.

“However, some of those new customers don't know the nuances of business aviation and don’t understand that making the move is less productive than doubling down and investing enough time to give feedback to their current provider.” Barber adds that when it comes to aircraft management, there is a “barrier to exit”.

Despite this, Barber remains optimistic about the future. “We know that the supply chain issues and constraints have degraded some of the services, but we think the customers will migrate to the best providers in time.”

Considering a potential US recession, Barber says it is likely that the customer base will fly less. This in turn could lead the supply and demand ratio to reduce pricing to pre-pandemic levels, although Barber fears other problems will arise in its wake. “There is a common practice among charter operators of racing to the bottom, as some businesses have shown they will operate at a loss to keep their doors open,” he says. “That is just not sustainable for the business and has a negative impact on the industry.”

Savvy customers appreciate a good service, even when things don’t always go as they were planned: Clay Lacy.

Jet Aviation’s David Best says the new customer base is “a major driver”. (Photo courtesy of Jet Aviation).

flyExclusive - ‘Maintenance problems could be a spanner in the works’

Jim Segrave, CEO, founder and chairman of flyExclusive.

JIM SEGRAVE, CEO, founder and chairman of flyExclusive has worked in business aviation through the recession of the early 2000s, the financial crash in 2007 and the Covid-19 recession. With almost three decades of experience, he’s seen it all before, and he’s not worried about another likely US recession.

“While economic concerns are something we know is top of mind for our customers, it is not something we’ve seen to be a major impact in our booking rate,” he tells CJI. “flyExclusive is coming off a busy summer travel season, and based off our internal numbers, we’re positioned to have the busiest fourth quarter in company history this year – despite the rising rate of inflation.”

But there are some aspects of the business that have been impacted by economic issues, particularly when it comes to maintenance, says Segrave. It’s getting harder to access parts for aircraft maintenance due to supply chain issues, making it more difficult to have dispatch availability in terms of planes that are ready to fly instantly.

“Dispatch availability is a top concern across the industry to meet the high volume of customer bookings,” Segrave says. This will be a key factor in retaining clients. So, flyExclusive has brought more of its maintenance operations in-house at its headquarters in Kinston, North Carolina. The company has also added a maintenance-ready “go-plane” that can be quickly dispatched with parts so jets that can’t make it into the MRO can still be serviced.

“Another area we’ve been successful in combating economic markers is with staffing and labour shortages,” says Segrave. To avoid stretched-thin talent, the company has already hired 100 pilots this year with another 50 currently undergoing training as well as hiring more than 250 mechanics and service operators.

An area where the company is thriving is in the fractional jet ownership space, which Segrave says has seen “tremendous growth” in recent years. “We currently have 145 contracts out to customers for planes that are expected to be delivered between the second and third quarter of 2023,” he says. “While demand from these new clients is driving business, it’s our existing commitment to service that is helping them make their decision to own with us.”

And the new clients will stick around too, he reckons. “During the onset of the Covid-19 pandemic, passengers began putting a higher premium on in-cabin safety,” he says, which led them to the world of private aviation. “As the pandemic continues to subside, these new customers don’t want to give up this new amenity in their lives. What we’re seeing at flyExclusive is that they’re continuing to stay with us rather than returning to the commercial market.”

Jet Aviation - ‘The new customer base is a major driver’

NEW CUSTOMERS gained during and after the global pandemic, plus the loyalty of existing customers, are helping leading charter provider Jet Aviation grow its business and shape new services.

“The new customer base is a major driver in our offerings,” David Best, senior vice president Regional Operations and general manager Americas tells Corporate Jet Investor. “The economic upturn after the pandemic connected us with many new customers and we look forward to continuing to serve their needs as they grow in the aviation space – evolving from charter customers to aircraft owners.”

One of the most global business jet operators, Jet Aviation has a managed fleet of more than 300 aircraft. Founded in Switzerland in 1967, the company today offers FBO services, staffing, charter, aircraft management, completions, maintenance, and defence. Since 2008, Jet Aviation has been a subsidiary of General Dynamics and employs about 4,000 staff at some 50 locations across the globe, including the Pacific region and the Middle East.

The company accommodates all sized aircraft and has seen the benefits of flying private as commercial carriers worldwide struggle to rebuild their services after the global pandemic. “Our focus in charter has been mostly in large cabin products,” says Best. “And we see our core customer base continuing to be served with high quality products and services tailored for each unique market.”

The global pandemic proved the immense contribution of private jet aviation, he says. The charter market answered “the remarkable call to action”. At a time when the airline industry was reeling from the impact of Covid-19, the sector proved its flexibility and efficiency by playing a significant role in the repatriation of citizens and supplying personal protective equipment (PPE) and vaccines. Charter operators also guaranteed access to airports that the airline industry could no longer reach. “We proved, once again, that business jets are a tool unlike many others and continue to rise to the occasion,” says Best.

Meanwhile, in keeping growing green preferences, Jet Aviation is continuing to offer customers sustainable choices, wherever possible, to reduce the environmental impact of its infrastructure and operations. The company is committed, it said, to supporting efforts to reduce business aviation’s carbon footprint. The solutions it is providing include the permanent offer of sustainable aviation fuel at specific locations along with Book-and-Claim offered everywhere, facilities built to Leadership in Energy and Environmental Design (LEED) standards, reduction in single-use plastic, onsite recycling programmes and waste management systems.

It is a trend that can only accelerate over the next 10 years, the company believes. “The commitment that companies, like Jet Aviation, are making to sustainable aviation solutions will be more and more accessible and vital,” Best tells CJI. “Customers will be able to better utilise safe, efficient aircraft with a significantly reduced carbon footprint.”

“Business jets are a tool unlike many others and continue to rise to the occasion”

Over the next 10 years, technology and efficiencies are going to be at the forefront of the market. “Customers will be able to better utilise safe, efficient aircraft with a significantly reduced carbon footprint.”

Jet Linx reports the surge in demand has led to “a huge spike” in crews’ monthly flying hours.

Jet Linx - ‘The aircraft owner today may be our Jet Card Member in future’

JET LINX’S SUMMER traffic figures showed a big drop on June 15th 2022. Not one of the operator’s aircraft flew as the company’s 550 employees came together for its sixth annual Safety Summit. Speakers included Darren Ellisor, the Southwest Airlines captain who safely landed an aircraft after an engine incident and explosive cabin decompression, and Dr Mark Rosekind, an expert on fatigue.

“We are buyers and looking for new acquisitions every day”

“With the demand our industry has seen in the last 12 months, our crew members have seen a huge spike in the number of hours they're flying on a monthly basis,” says Jamie Walker, president and CEO of Jet Linx. “It is not just the hours. We have seen the number of legs they were flying changing. We wanted to discuss what we are doing to mitigate fatigue and create a conversation where we can learn and improve together.” He stresses that he does not see safety as a competitive area but one where the whole industry should come together.

Walker says that his team has adapted well to the rise in demand. “I would say that when we initially saw the spike in demand in 2021 it was fatiguing, but after a few months our team became accustomed to the flow. We also proactively stepped in to mitigate demand by stopping new sales from October 1st to January 1st. It was not just about safety, which always comes first, it was also very much about customer service. We never want to be in a position where we have to leave someone stranded on the ramp because we can't handle all the demand. We'd rather say ‘no’ to signing up a new Jet Card Member in return for delivering upon our guarantee of service to our existing Jet Card Members.”

Jet Linx has grown its fleet in 2021 and 2022, but not as much as hoped. Dozens of aircraft owners took advantage of higher prices to sell aircraft.

“We had to manage a significant amount of transition from current aircraft owners moving away from their ownership position and into a different position,” says Walker. “The Jet Card Member today is going to be an aircraft owner tomorrow. And the aircraft owner today may be our Jet Card Member in the future. It all depends on utilisation and how they move through their private aviation lifecycle.”

Jamie Walker, president and CEO of Jet Linx.

While Walker is confident the company will grow significantly in the next 12 months – growth is not his key focus. “Our goal is to serve fewer, not more. While the fleet only grew by say five net aircraft, we have started to trim the number of Jet Card Members we serve to create more availability for the fewer we serve. It is about keeping a high-quality product,” says Walker.

The company now serves 21 locations out of what it sees as 85 greater metropolitan areas in the US. Jet Linx has acquired five companies since 2015 – the most recent was Boca Raton’s Southern Jet in March – and is looking for other opportunities.

“Having done this as many times as we have done it, that deal could not have worked out more seamlessly. It took less than 90 days to integrate – granted it was only seven airplanes, but we could do 25 airplanes in not much longer,” he says. Walker sees this as a big advantage as it allows Jet Linx to acquire smaller operators, where most buyers are focused on bigger fleets.

Jet Linx adds the aircraft to its existing Air Operator’s Certificate simplifying operations. “We're just absorbing the business and bringing those team members and those clients over into the Jet Linx family,” he says. Walker stresses that the company is also a patient buyer. “If we can't find the right terms to get a deal done today, we will sit and we'll wait another six months or 12 months and find the right timing.”

As well as being a buyer, Jet Linx is regularly discussed as a possible target for other business aviation companies. “Our equity owners – whether it’s our base partners or our private equity partners – are not looking to sell,” he says. “There is a long tail in this industry and our platform is unique in its ability to bolt-on acquisitions rather seamlessly due to our on-going support of local operations from our National Operations Center in Omaha. We are buyers and looking for new acquisitions every day.”

Cabin comforts: Jet Aviation has maintained top standards by temporarily halting new sales. (Photo courtesy of Jet Aviation).

The cabin door is open: Growing private wealth will tempt more HNWIs to try private aviation before becoming loyal customers, according to WINGX. (Photo courtesy of Jet Linx).

Solairus - ‘New clients bring in a fifth of our growth’

Paul Class, Solairus says new clients accounted for about 20% of the company’s business growth this year.

NEW CLIENTS HAVE been flocking to the industry over the past two years and for Solairus they account for a huge slice of the company’s growth.

“New clients represent approximately 20% of our business growth for 2022,” Paul Class, senior vice president of Charter Sales, Solairus Aviation tells CJI.

The company, which was founded in 2009, has 70 base locations across the US and manages more than 275 private aircraft. Through its own fleet it offers charter on the likes of the Gulfstream G600, the Global Express XRS, the Global 5000, Falcon 7X and the Challenger 300. Class, who has been in his position at Solairus for almost a decade, thinks the company will be able to keep the new clients too. “They are retained by offering aircraft and flight crew who provide the highest level of safety and service.”

Class also thinks that High Net Worth Individuals (HNWI) are beginning to view the industry in a different way since Covid-19, which he reckons will stick. “The pandemic has caused a large group of HNWI who previously viewed charter as an excess luxury to now view it as a necessity,” he says. “While some will certainly return to previous options, it is expected that most who have made the decision to move to private jet charter will remain.”

His thoughts echo Jetcraft’s recent five-year forecast which predicted HNWI populations are set to increase globally by at least 21% over the next five years, which could contribute to $66.6bn in transactions by 2026.

His optimism is despite the threat of a US recession on the horizon. “I would expect a recession to slow some travellers down,” he says. “However, I would not expect a significant decrease in activity.”

Answering our question about what the next decade of aviation looks like, Class says: “The US charter market remains fragmented and filled with inconsistent service. I hope the next 10 years allows the industry to establish an environment that allows for charter companies to offer services based on aircraft that are dedicated to the sole purpose of delivering quality charter service at a rate that is profitable for an operating company.”

Shared vision: Corporations see the sustainability benefits of a shared jet programme, according to VistaJet.

VistaJet - ‘Unprecedented demand to grow further’

THE PAST TWO years have seen “unprecedented demand” for VistaJet’s pay-for-hours-flown subscription programme, partly from new entrants, according to Leona Qi, president of VistaJet US. Now, the return of corporate flight departments is lifting demand even further.

It’s a story that starts with Covid-19. From 2019, safety-conscious travellers wanted to avoid the perceived health risks of commercial airline travel. The decline (and further decline) of scheduled airline services added fuel to that spark. Up to 70% of enquiries about VistaJet services have been from people new to private jet flying.

“The new trend is that corporates have increased their flying hours because there’s work to be done in person”

But over the past six to eight months corporate flight departments have re-emerged as major clients. “The new trend is that the corporates have increased their flying hours because there’s work to be done in person. And, most depart from one office, use the aircraft as a flying boardroom, then arrive at the next meeting,” Qi tells Corporate Jet Investor. “Corporate clients are flying two and sometimes three of our aircraft at the same time. With people returning to work, there’s a lot of clients to see and deals to be done in one day.” It’s not just top executives who are returning to private jet aviation. With the paring away of scheduled services corporations are increasingly putting more junior, but none the less vital staff, in private jets.

Another, sometimes neglected, factor driving demand for private jet charter is the vast wealth distribution across the US, she says. “A lot of times we have clients calling from the Dakotas or Nebraska – and you wouldn’t think that would be home to entrepreneurs worth hundreds of millions of dollars. But it is.” Plus, these business people urgently need to see new and existing clients and can no longer rely on scheduled airline services to help them make their next appointment.

“Business aviation is the ultimate convenience tool – and I don’t see this going away anytime soon,” says Qi. While the slowly recovering airline schedules may tempt some executives back to their first-class cabins, VistaJet believes few of their clients would want to relinquish the comfort and convenience of private jet charter. “Before the pandemic only 10% of people who could afford to fly privately did so, but the pandemic has changed that.”

But how worried is VistaJet about the prospect of a much talked about global recession hitting charter bookings? While acknowledging the risks of an economic downturn and the challenge of supply chain disruptions, Qi remains confident about the company’s business model. “Business aviation is a deep and mature market.” Qi tells CJI. Also, the company’s business model provides some insulation against short term market fluctuations.

“Investors love VistaJet because we have a three-year subscription model,” she says. While previously clients were required to book a high number of hours – the minimum number being at least 50 hours – Vista’s new products have cut that to a minimum of 25 hours a year.

Vista’s shared jet programme also finds favour with corporations. “If you own an aircraft and fly fewer than 200 hours a year, you don’t really need to own aircraft,” she says. “But with VistaJet, you can fly on a shared economy basis.”

Corporations (and their shareholders) increasingly see the sustainability benefits of a shared jet programme compared with ownership, adds Qi. More than 85% of clients choose to opt in to the company’s carbon offset programme.

The US market accounts for about half of VistaJet’s business, with new client memberships reaching the highest in its history. 70% of US hours sold in the third quarter are attributable to new VistaJet Program Members. At least there’s no shortage of aircraft supply. During the first six months of 2022, Vista added over 100 aircraft to the fleet and expanded its managed fleet, both through two strategic acquisitions of Air Hamburg and Jet Edge, bringing Vista’s total fleet to over 360 aircraft.

While wary of the many challenges ahead, Qi is confident about the future of charter and Vista’s place within that landscape. “There’s a reason private jet aviation is called business aviation,” she says. “That’s because it’s a valued business tool, which is essential to the future of business.”

One of many: Vista’s fleet totals about 360 aircraft after the firm’s acquisition of Jet Edge and Air Hamburg.

Wheels Up - ‘Several levers to drive continued growth’

DESPITE WHAT Wheels Up founder, CEO and chairman, Kenny Dichter calls the uncertain macroeconomic environment, he believes the firm has a number of levers that will continue to drive growth.

From selling King Air memberships to acquisitions and a SPAC (special purpose acquisition company), Wheels Up is now into the third phase of its evolution and it is the bottom line that matters. Sales are up 49% in the past year and the company is planning to be profitable by 2024.

In August, Wheels Up’s new chief financial officer, Todd Smith, who joined from General Electric earlier this year, said: “None of us are satisfied with the current level of profitability of this business. So, we are going to work very, very hard to accelerate that and make that happen as quickly as we can.”

Speaking to investors upon release of Wheels Up’s second quarter (Q2) results, Dichter said: “While our top-line was strong, we are cognisant of the uncertain macroeconomic environment. We do not expect to be completely immune, but the good news is we believe we have several levers to drive continued growth.”

Wheels Up posted a negative EBITDA (earnings before interest, tax, depreciation and amortisation) of $46.9m in the second quarter (Q2) of 2022. That brought the total loss for the first half (H1) of this year to $96.3m – versus a loss of $17m in H1 2021. However, the company has plenty of cash on hand ending June 2022 with $427m. This is after spending $108m on the acquisition of charter broker Air Partner. Wheels Up also has an unfinanced fleet if it needs to raise extra cash.

Smith said: “We have significant cash on hand and balance sheet flexibility, which gives us the security needed to weather the macroeconomic conditions and the time to execute on our key initiatives, which we expect will ultimately deliver profitability.”

Wheels Up is relying on improving efficiency in aircraft operations to make a big difference to profitability. The firm will also keep looking at changing revenues and programmes, with things like fuel surcharges, higher pricing, raised minimums and lower guarantees if needed.

There is also a push towards technology – Wheels Up spent $7.4m on software in the last quarter alone. The firm has now added all its owned, managed and committed aircraft to a single flight management system.

Kenny Dichter, founder, CEO and chairman, Wheels Up.

Speaking to investors after the publication of the firm’s Q2 results in August, Vinayak Hegde, president, Wheels Up said: “For the first time in Wheels Up history, we have a holistic view of our supply that provides full visibility into our aircraft availability and maintenance, and the schedules support pilots including the vacation and training schedules. This allows us to see upfront where there is a mismatch in demand and supply and adjust.”

Wheels Up can use this platform to schedule more crew and avoid maintenance on peak days, said Hegde. It also allows Wheels Up to react quicker to change and more accurately forecast demand.

The firm has exceeded expectations in hiring 350 pilots over the past eight months, according Hegde. It has also announced partnerships with Delta and ATP Flight School to assist with training.

“We do not expect the overall macro pressures on pilots, parts and maintenance to subside anytime soon. That is why it’s imperative we proactively address these pressures to continue to execute at a high level,” said Hegde.

Wheels Up will also have a single aircraft operator’s certificate next year which will help to improve operating efficiency.

Although another acquisition is not entirely off the table, Wheels Up is more concerned with bedding in existing businesses at present. Smith said: “Just a little bit of flexibility in case there’s something strategic that comes along that we want to invest in. There is a high score rate that we are going to be very judicious with any decisions there.”

Dichter is confident that the company can keep growing. Wheels Up is expecting its third-quarter revenue to rise 25% year-on-year. It is predicting 2022 revenue of between $1.48bn and $1.53bn compared with $1.2bn last year. That is way up from $332m in 2018.

“I think we see a lot of enthusiasm about business travel, which hasn’t really shown up in the last couple of years. I think that coupled with our service and now the global platform that Air Partner affords us, we feel good about the demand,” said Dichter.

Driving forward: Business aviation could grow much larger as it transforms into advanced air mobility, with electric/hybrid aircraft adding last mile connections to complement business jet flights, says Richard Koe, WINGX.

US charter - The next 10 years

“PREDICTION IS DIFFICULT – particularly when it involves the future.” Mark Twain’s assessment of forecasting finds favour with the US charter operators consulted by Corporate Jet Investor. The challenge becomes even greater when we ask for predictions about the charter business of 2032.

Most charter companies agree over the next decade change will be shaped by the two Ts – technology and talent (acquisition and retention). The first, technology, covers the potential offered by innovation in the form of digitalised booking systems, eVTOLS and even supersonic aircraft.

Technology will play a large part in keeping the market competitive, according to Joe Barber, senior vice president of commercial operations, Clay Lacy. “Over the next 10 years, the charter user interface will evolve,” he tells CJI. ”The fleet operators have done a fantastic job of re-engineering the booking experience and making it digital and with less friction. On-demand charter will adapt to stay attractive in the market.”

That market is also keenly anticipated by Leona Qi, US president VistaJet, whose sister company XO is moving towards a 100% digital marketplace. This will welcome new generations to private jet travel by significantly lower its cost, says Qi. “XO’s digital booking system will attract the next tier of flyers who want the advantages of private jets – comfort, convenience and private terminals with straight lines and fewer touchpoints – but at much reduced cost.”

Technology may even offer supersonic solutions, she suggests. “The ability to fly from London to New York in two-and-a-half hours would make a supersonic jet the ultimate time machine. Who knows, by 2032, there may even be a supersonic jet in the VistaJet fleet.”

Time is also highlighted by Jim Segrave, CEO, founder and chairman of flyExclusive. “In the next 10 years, customers’ value of time is not going to change but what will is the industry’s ability to prioritise that value in new ways through technology and integrated systems,” he says. “Anticipating and planning for those changes will always be top-of-mind at flyExclusive so that we can continue delivering for our customers in innovative and creative ways.”

“By 2032, there may even be a supersonic jet in the VistaJet fleet”

According to Jet Aviation, over the next 10 years, technology and efficiencies, many focused on sustainable aviation, are going to be at the forefront of the market. “Customers will be able to better utilise safe, efficient aircraft with a significantly reduced carbon footprint,” says David Best, senior vice president Regional Operations and general manager Americas, Jet Aviation.

The second T stands for talent, which many consider both a challenge and an opportunity. “The pilot shortage will highlight companies with a solid culture and core values; they will better attract and retain staff and will have a competitive advantage,” says Jamie Walker, president and CEO of Jet Linx. The company began preparing for the pilot shortage in 2017, after anticipating a large majority of pilots would be lured to join Part 121 carriers, he says. That led the business to forge a partnership with Southwest Airlines to launch Destination 225 to “cultivate the first and only pathway from Part 135 to Part 121”.

Prompt action is likely to prove critical to avert crisis, believes Walker. “The pilot shortage will definitely reshape it in a significant way. If you combine the pilot shortage with a recession, companies that are not well capitalised or well-run could be in real trouble.”

Richard Koe, MD of WINGX, picks an optimistic note on which to end. The number using private aviation, either as owner or charter customers, is still a small proportion of those who can afford such travel, he says. Even with negative headwinds in the economy, the industry should be able to attract new users.

Business aviation, not just the charter fleets, is still fragmented and this will change as the user-base expands and even more investment comes into the sector, according to WINGX. Koe predicts the emergence of a composite ‘on-demand’ sector, differentiated from the traditional aircraft management operations, which is focused on third party transit, through product options from spot-market seat to whole aircraft leasing. “The sector could get a lot larger as it morphs into advanced air mobility, with electric/hybrid vehicles adding last mile connections to intercity business jet transit.”

CJI Connect

Conor McDougall Garmin [email protected]

Greg Principato National Aeronautic Association, President and CEO [email protected]