Over the last three years, private aviation has soared. In 2021, 3.3 million private flights took off around the world, the most the industry has experienced to date and 7% higher than the industry’s previous boom in 2019. Even at the height of the pandemic, private aviation saw sustained demand while the rest of the travel and tourism sector plummeted.
Yet is the industry set to become a victim of its own success? This surge in interest is creating pressure that the industry is, arguably, not ready for. If steps aren’t taken to alleviate that pressure soon, the continued flood in demand could start to cause cracks that will be difficult to recover from, costing the industry the growth it has worked for.
Pressure point: Manufacturing
A shortage of raw metals, parts and electronic components is causing manufacturing delays across the board, with every technology-related sector experiencing supply chain issues. In private aviation, this disruption is felt two-fold, with reduced supply hitting at a time of increased demand. Economic uncertainty is adding to the problem, with many suppliers unwilling to hold too much stock at once in case of a recession – creating further delays and bottlenecks along the supply chain. With private owners and aircraft lessors alike competing for new aircraft stock, aircraft operators will soon struggle to add new aircraft to their roster to fulfil their influx of flight requests.
Pressure point: Demand for used aircraft ownership
The used aircraft market is booming – but there just aren’t enough to go around. As is the case in any sector, scarcity creates price increases, and low availability has caused used aircraft prices to rise 25%-30% in recent months. This fierce competition for aircraft is driven in part by those private charter operators looking to add more aircraft to their fleet (and unable to secure new models thanks to those manufacturing issues) and in part by an uptick in interest in private ownership post-Covid. Interestingly, young affluent people are one of the biggest growth markets for aircraft ownership, with under 45s accounting for 27% of sales according to pre-owned aircraft sales specialist Jetcraft.
Pressure point: Maintenance
The more journeys an aircraft makes, the more routine maintenance it needs – and with more aircraft in the air than ever before, maintenance facilities are under pressure to work through a higher volume of repairs and renovations than anticipated, at a faster pace. Again, both the speed of growth and the threat of recession are preventing maintenance facilities from keeping up with demand. A steep investment in new equipment, locations and personnel are needed to make sure maintenance is readily available in spite of the surge, yet concerns that an economic downturn could see a sudden decline are potentially preventing active investment, in turn stalling growth by keeping more aircraft on the ground.
Pressure point: Admin
Both brokers and operators are feeling the strain of increased interest in private charter bookings. For brokers, it’s more customers to secure bookings for in a highly competitive market. For operators, it’s an overwhelming number of requests to sort through, price, quote for, and secure – not to mention the added layer of managing the time and location of those bookings as efficiently as possible. If brokers and operators can become as efficient as possible when booking clients on to private charters, it could relieve some of the pressures felt elsewhere in the sector.
Zaher Deir, founder of AeroBid, believes that this efficiency is the first step to easing the industry’s pressure points and enabling more sustainable – and less risky – growth. He comments: “As an industry, we need to change how we operate, following the example of other sectors to use data and real-time communications to make our charter bidding processes easier and more effective. Just look at the problem with empty legs for instance: every empty leg is an opportunity to transport paying customers, but they are being wasted. If the industry can improve its efficiency, it will be able to sustain its rapid growth, which was why AeroBid was founded in the first place.”
What exactly the future holds for private aviation is impossible to tell, but what is clear is that consumers have developed a taste for private aviation that, if managed effectively over the next year, could have a transformative effect on aviation.
