As COVID-19 prevented senior business aviation executives from meeting in person last week for their November annual conference at the Fontainebleau hotel in Miami, speakers at a virtual edition of Corporate Jet Investor Americas 2020 provided an optimistic outlook for private travel.
Speaking separately, senior executives from the three largest operators of fractional and chartered aircraft offered an optimistic view of the rebound and the likelihood of it having wings.
Andrew Collins, CEO of Directional Aviation’s jet card and charter units – Sentient Jet, FXAIR and PrivateFly – told attendees that he had recently restored his pre-pandemic budgets for the year and “ reached most of these numbers ”.
Kenn Ricci, its president, was not at the conference this year. It may have been linked to the launch of its SPAC which went public on NASDAQ for $ 200 million. The funds are earmarked for aviation-related acquisitions, but perhaps more around futuristic concepts.
Collins had good company for his optimism. Kenny Dichter, founder and CEO of Wheels Up, told attendees his company will increase membership from 6,000 at the end of 2019 to 10,000 by the end of the year.
Known for the parties he throws for members, Dichter joked about the new customers, “They haven’t joined in 2020 for The Masters or Super Bowl parties that we have alongside these big events. They joined to fly.
He said the company he founded in 2013 is on track to hit $ 1 billion in revenue next year, and after acquiring Delta Private Jets, Travel Management Company, Gama Aviation Signature and Avianis , as well as the launch of an aircraft sales division, he still hopes for more acquisitions. .
Speaking of the recovery, he noted: “If you watch the flight action, we’re at pre-COVID levels, and you only have one leg of the demand stool pushing that, and that would be the trip. high net worth. We are really optimistic that the traditional holiday flyer and the business flyer, which are the other two legs of the stool, will make a comeback. I think we’re going to see unprecedented levels of theft in the national profiles.
He predicted: “When the three stages are launched, I think you will see hours of unprecedented flight … COVID-19 was an accelerator. We are well positioned at the entry level. It is a repositioning of priorities. “
In a sector where large corporations rarely agree on much, the bullish outlook was shared by NetJets, the world’s largest private jet operator. After initially declining at the start of the crisis, NetJets reversed the trend in July. This enthusiastic prospect is still in effect.
Patrick Gallagher, chairman of Berkshire Hathaway’s business aviation unit, said the fractional-stock and jet-card seller will take delivery of 10 new private jets by the end of 2020 and more from 30 for the full year. Additionally, he said plans call for at least 40 new aircraft deliveries in 2021 and every year for the next decade. “We think we have a nice and long way to increase new business.”
In terms of activity, he says theft is at around 85% of pre-COVID levels, with expectations that the numbers will rebound to 2019 levels by the middle of next year.
Some customers who have bought his 25-hour jet cards, which cost hundreds of thousands of dollars, have already walked through that time and bought stocks, a multi-million dollar commitment that spans three to five years.
Since the Great Recession, private jet travel had not kept pace with the growth of affluent households over the past decade, Gallagher says. COVID has taken these new rich people aside.
Their reaction? “Why did I wait so long?”
Will these newly created private leaflets remain once the pandemic is behind us? “The rate of acquisition and retention is faster than I’ve ever seen it,” Collins said.
Gulfstream, Textron, Embraer
Other speakers were equally optimistic.
Rob Scholl, senior vice president of sales at Textron Aviation, said turboprop and small private jets are attracting first-time buyers. “These are companies or individuals who do not need to come to a board of directors for approval. It’s a streamlined decision-making process. They themselves need to go out and travel to run their businesses, and that’s where we’re seeing a lot of demand right now. He described the growth prospects for the next few years as “very strong”.
Michael Amalfitano, CEO of Embraer Executive Jets, said that while first-time buyers typically only make up 10% of buyers, for entry-level jets they reach 50%. In the third quarter, Embraer delivered 19 of its very light and light Phenom 100 and 300 jets, an increase of 27%, according to the General Aviation Manufacturers Association.
Speaking at a virtual press conference later in the week, executives at Gulfstream Aerospace shared the bullish outlook. Its chairman Mark Burns told reporters: “Despite all the tragedy this pandemic has created, it has been an accelerator for many businesses.” He said a number of these companies are now talking to their salespeople, believing that private aviation is key to moving their businesses forward.