Private air travel has soared in demand since the onset of the COVID-19 pandemic. This summer, rich travelers to Europe have pushed the market to new heights.
Travel in Europe is expected to surpass 100,000 private aircraft movements in July by the end of the month, according to Travis Kuhn, senior vice president of aviation consultancy Argus. This is a 15% year-over-year increase, and an all-time high in the five years that Argus has tracked the European market. In 2019, the monthly average was 61,000 movements. The top destinations are France, Italy, and Spain, according to data provider WingX.
Pent-up wanderlust is the most significant factor at play, said Kuhn, but private jets have also gotten more attractive due to airline chaos, such as carriers canceling thousands of flights and mountains of misplaced luggage at airports. Companies that give the wealthy access to private jets are reaping the rewards, but industry watchers told Insider the increase in demand sees charters in facing some of the same issues as commercial flights.
“I think what’s been going on with airlines on both sides of the pond this summer has definitely had an impact, and kept private travel numbers higher rather than lower,” he said.
Even before airline chaos made headlines, demand for private jets was high with would-be buyers getting into bidding wars. The negative publicity around commercial airlines has only compounded the interest, according to Chad Anderson, chief executive of aircraft brokerage Jetcraft.
But even though it’s a seller’s market, firms like Jetcraft aren’t able to fully capitalize on the boom because there are so few jets on the market, he said.
“The immediate beneficiaries of this demand are the charter companies and fractional providers,” Anderson told Insider via email.
The waiting time for a new jet approaches two years, according to Jetcraft, so preowned jets are hotter commodities. But supply of preowned jets is at an all-time low.
Currently, only 3.9% of active private jets, or 959 units, are on the market today, according to Andrew Young, general manager at market data provider AMSTAT. This is a 32% drop year-over-year.
Charter and fractional ownership firms have had to institute limits in order to accommodate as many customers as possible. For instance, in October, Flexjet stopped selling jet cards – guarantees for future flights at fixed hourly rates – to new customers in order to accommodate existing ones. In June, Wheels Up reduced guaranteed availability days for pay-as-you-go members and those who deposit $100,000.
Due to demand and fuel price increases, the average cost for a private jet charter using a fixed-rate membership has hit $10,770 per hour, up 6% from the first quarter of 2022 and 28% from the end of 2020, according to buyer’s guide Private Jet Card Comparisons.
But rising prices haven’t deterred customers. Wheels Up increased its prices in November 2021 and this past June. In the first quarter of 2022 through March, Wheels Up’s active member count rose 26% to 12,424.
The most recent increase included a new carbon offset charge and a change in how fuel surcharges were calculated. Since the start of 2022, the price of jet fuel has spiked by 90% to about $4 a gallon and has topped $8 a gallon in high-demand areas such as the Northeast, according to McKinsey.
Wheels Up CEO Kenny Dichter told Insider that customers were understanding of the changes.
“Our members are attuned to the price of fuel,” he said. “They see it every day, whether they’re watching CNBC or Bloomberg.”
Though flying private allows travelers to skip long security lines and fly on their own schedule, the charter industry is facing some of the same challenges as commercial airlines, Dichter said. For instance, it takes longer to get ahold of third-party maintenance providers or certain plane parts.
Wheels Up has increased its call-out time – the amount of advance notice required to book a flight.
“In today’s market, a 48-hour call-out is the new 24-hour call-out,” Dichter said.
Flexjet and its European sister company PrivateFly are also asking members to book as far as possible in advance during this peak period, according to managing director Marine Eugène. Private planes are still subject to air traffic delays and issues with slots – permission to land or take off a plane.
“These issues can always be a factor in the summer in Europe, but particularly so this year,” Eugène said via email.
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