Essential Private Aviation Report: 2023

Since the start of the pandemic in March 2020, the private jet industry, like many others, has been on a wild ride of supply and demand. Now is the time to get updated on present and projected market conditions in this must-read report for private aviation users.

Historical perspectives

We have seen annual industry volume expand post 9/11 from 3.4M domestic operations to a peak of 4.1M operations in 2005, an increase of 17.1% (4.27% per year). Annual volume experienced a very slight decrease in 2006 and 2007. 2008 brought the “Great Recession,” annual operations bottomed out at 2.9M, a decrease of -30.3% by the end of 2009. It is also important to note that economic conditions created in 2008-2010 restricted the manufacture of new aircraft during the years post 2008. Beginning in 2010, demand slowly and constantly grew year over year through 2019, peaking at 3.8M operations, a total increase of 23.7% over 8 years (2.96% per year).

The Pandemic Effect

2020 began after two prior years (2018, 2019) of relatively flat performance of 3.8M operations. Once the pandemic began in March of 2020, monthly declines in March (-30%), April (-73%), and May (-47%) were experienced as business travel was at a standstill and many personal travelers were locked down. Operators had a choice to suspend operations, which some did, or continue to operate their aircraft and generate whatever income they could. 2020 bottomed out at an annualized loss of (-20.94%) from 3.8M operations to 3.0M operations, the largest and swiftest loss of demand in the modern era of private aviation. As 2020 rolled on, commercial aircraft remained a severely restricted option, health concerns for at-risk travelers, a return to business travel, and an elimination of international travel fueled an historic demand increase of 45% to annual operations of 4.4M. The net effect of these two pandemic years is that in 2020, the industry was shut down, and twelve months later, the demand returned plus a one-year growth of 25%. Aircraft, Pilots, Parts, Catering, Fuel, Maintenance Personnel, Hotels, Rental Cars, Car Services, were all in various stages of under supply. The result was price increases to the customer of 25-50% in some cases, more based on the trip or notice.

Opportunists, Jet Cards, Race for Supply, Unsustainable Demand?

Not unlike other business opportunities rising during the pandemic, the increase in private jet demand gave rise to rosy business projections and an increase in companies offering pre-paid jet cards at fixed pricing while offering guaranteed availability. New fliers flocked to pre-paid jet cards in droves. These jet card companies have engaged in an arms race to build an infrastructure with all needed elements in undeveloped or in short supply (as mentioned above), including basics such as aircraft, pilots, parts, and fuel. The result: an inflated pricing and cost structure based on an unsustainable demand with an unquenchable thirst for cash.

What this means for you

Although 2022 ended with annualized operations of 4.57M, representing a 3.5% increase from 2021, demand for each month began to decline from June 2022. As a result, aircraft supply has started to improve, and pricing has moderated slightly, especially in on-demand non-peak travel situations. However, jet card customers will continue to keep prices and demand inflated as they fly through their pre-paid balances. If you’re a jet card customer who only flies 2-6 times per year, we recommend resisting the option to renew your agreement. Instead, take advantage of our “Pay as You Fly” options, which can offer you better values by exploiting pockets of increased availability.

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