The COVID-19 pandemic has changed aviation market dynamics due to air travel restrictions, which have resulted in the reduction of commercial flights and the expansion of noncommercial business travel. Concerns about the potential for COVID-19 infections initially spurred some business travelers to fly private — and, as the industry reacted, companies increasingly moved to open up access to corporate aircraft beyond the C-suite to include mid-level executives. Now, more businesspeople are drawn to the relative comfort, privacy and convenience of private business aviation.
While business aircraft flights account for just 4% of traffic at the busiest airports, according to the National Business Aviation Association, demand for private business travel is growing, particularly at smaller regional facilities. Argus International reports July was a busy month for private jet travel, with more than 300,000 flights. Even though business generally slows in the fall, more than 300,000 flights took place in September as well, and demand is expected to continue to grow.
Today’s private business travel industry is influenced by several variables, including the pandemic, an influx of new private jet travelers, fast accumulation of new wealth, scarcity of new and secondhand planes, delays in getting aircraft components and pandemic-related pilot and cabin crew shortages.
1. Convenience Drives Demand for Private Jet Services
It’s estimated more than 10,000 travelers started flying on private aircraft for the first time during the pandemic. With current commercial flights reduced, rarely can a business traveler fly somewhere, attend an hourslong meeting and return home the same day. The added convenience and time savings of flying privately directly from point to point helps offset private business travel costs, especially when considering the cost for multiple travelers. Despite the impact of COVID-19, the business case for corporate flying hasn’t changed. CEOs and executives are highly compensated, and that creates pressure to always stay productive. Companies can ill afford for CEOs and well-paid executives to spend time trying to catch connecting flights or dealing with flight delays, canceled flights and layovers. Security and privacy are also a common concern for high-profile business travelers.
2. Traditional Buying Patterns Are Shifting
Over the years, private business travelers have gotten creative in how they handle traveling needs. In addition to outright aircraft/fleet ownership, purchase options include fractional and hybrid ownership, similar to a timeshare that gives business travelers access to planes a certain number of hours each year. There are also options such as corporate shuttles and plane charters/rentals. These options have opened up the business aviation market, allowing travelers to take advantage of private flying without the major expense of owning hangars or providing aircraft maintenance. However, the influx of travelers new to private business aviation is putting a strain on the system. Owners of private aircraft who rent them out are using the planes more frequently themselves, leaving fewer available for charters. Furthermore, new leases and rentals, as well as the sale of new fractional shares, are becoming scarce.
3. Private Business Travelers Are Evolving With Heightened Sophistication
Aircraft owners, charter clients and other business aviation customers demand high-end service and exceptional, personalized experiences. A younger, more technologically connected generation of corporate executives are driving private business travel growth. As efficiency and accessibility increases, fixed-base operators (FBOs) are evolving to offer the kinds of terminal, hangar and fueling services that increasingly are in demand. This means to stay competitive in larger markets, an FBO needs to be flexible in terms of what is offered, how it’s offered and who they partner with. Due to demand, FBOs now have to offer services like a hotel’s concierge. New Generation X and millennial customers demand the latest in comfort, technology and connectivity. A good FBO will have the ability to book a rental car or limousine; make reservations for high-end dining, hotels and entertainment; and meet other business traveler demands.
4. Regulations and Safety Standards Are Changing
Travel regulations are becoming more stringent for what the Federal Aviation Administration (FAA) considers Part 135 and Part 91 aircraft. One of the industry’s newest mandates requires all aircraft flying in Class A, B and C airspace to be equipped with transponders that broadcast identification, position, altitude and velocity. This means private aircraft must be trackable at all times, just as commercial flights are. Additionally, knowledge of local and regional COVID-19 infection and vaccination rates are important. More and more aircraft are getting certified as mobile testing centers and taking advantage of on-aircraft COVID-19 testing services. Plus, designers of corporate aircraft are looking at design a little differently. Integrating durable materials with antimicrobial properties and using contactless technology could soon become the norm. While implementing measures that aren't yet mandated may incur additional costs in terms of knowledge, skill and monitoring, it could save money in the long term.
5. Technology and Sustainability Are Influencing the Industry
Many sectors in the aviation industry are being pushed forward by technological developments. A few technology requirements that business travelers expect without question include reliable, no-fail, Wi-Fi from the ground and satellites, as well as the ability to perform video conferencing in-flight. Secure systems are also important, as are high-quality reservation systems, enhancements to cockpit safety that improve situational awareness, and cleaning protocols and air filtration systems that guard against pandemic-related health concerns. From an environmental standpoint, using sustainable aviation fuel, generated from renewable and waste sources, has the potential to be a game changer as the world moves toward net zero emissions. Additionally, high-quality carbon credits with nature-based offsets are becoming increasingly popular.
Private corporate travel is becoming a necessary, economic and competitive tool in today's business environment. Companies will be able to increase efficiency, win market share and beat competition by using noncommercial aircraft. Technological developments, rising demand and enhanced services and offerings are just a few factors that will help expand this market sector.
The aviation industry can expect to see more companies take advantage of private business travel as a result of COVID-19. Aviation consultants with a wealth of experience can guide companies and FBOs on how to cost-effectively manage this growth. Learn more in our latest Aviation Special Report.