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LunaJets believes summer charter figures are ‘misleading’
Poor demand combined with massive aircraft over-capacity has led to drops in rates-per-hour (-20 per cent average), as jet operators accept discounts to keep their fleet operational, according to broker LunaJets.
Eymeric Segard, LunaJets' CEO and founder, is pleased with the performance of the cargo division.

LunaJets, a charter broker based in Geneva, Switzerland, believes the private jet market is facing unprecedented challenges as the COVID-19 pandemic aggravates an already fragile industry. The market, it notes, is down 33.8 per cent in volume year-to-date and even lower in revenue, with Europe performing worse than America. All charter market segments are impacted but the most affected are the long trans-continental and corporate charter flights. The current wave of new quarantine measures and travel restrictions will have an immediate and devastating effect on the market.

“Market summer figures are misleading. The industry benefited from commercial airlines' dislocation, with a spike of 'leisure' clients and first-time private jet flyers, but September will be a back-to-reality moment,” reveals MD Alain Leboursier. “Corporate flight demand, representing 70 per cent of our business from September to Christmas, is weak despite really low rates on same-day returns or trans-Atlantic flights. It's a perfect storm situation considering the uncertainty caused by quarantines, lockdowns, weak corporate demand, structural overcapacity and the financial leverage of this industry. Some jet operators or competitors seem to live in cloud cuckoo land, publishing over-optimistic figures. Private aviation has a long track record of frauds, failures and bankruptcies among manufacturers, operators and charter brokers. The wake-up call will be painful; the industry is much more fragile than during the past crisis.

“The whole private jet industry never recovered from 2009. Well before the COVID-19 crisis, the collapse of JetSmarter and other disasters proved that burning investors' money at smoking valuation is not a sustainable model. Our financial discipline, a debt free balance sheet, a stable management and long track record of growth and profitability makes us well positioned to take advantage of future opportunities.”

Travel restrictions and commercial airline disruption has boosted the level of new clients mainly for intra-European flights. Despite this short-term unexpected recovery, LunaJets' private jet division is still down 18 per cent year-to-date in volume. Its strong growth in Q1 (+30 per cent) followed by a total collapse in Q2 (-70 per cent) due to travel restrictions, was not compensated by current Q3 recovery and Q4 looks bleak.

“We see two markets: small and midsize aircraft performing relatively well until now, whilst larger cabins, long haul flights and the business segment remain weak. Typically, challenging times bring new trends to the market: clients take advantage of good deals and discounted rates,” notes Guillaume Launay, head of sales. “Today, owning a fast depreciating aircraft or a 25-hour fixed-rate jet card makes no economic sense when clients can take advantage of on-demand charter services at a much better cost. Our 'Pay-as-you-fly' offers are the most optimal way to use the right aircraft for the right mission at the right price.”

Poor demand combined with massive aircraft over-capacity has also lead to drops in rates-per-hour (-20 per cent average), as jet operators accept discounts to keep their fleet operational. This trend affects more large than smaller cabin market, and LunaJets passes the price reduction directly to its clients, a huge benefit to them. “It has never been so cheap to book trans-Atlantic or same-day return flights,” Launay adds.

“We continue to gain market share, thanks to a record growth of new clients, (+80 per cent YOY), but overall it has not compensated for the absence of our loyal clients from the Americas, the Middle-East and Asia.” says Eymeric Segard, LunaJets' CEO and founder.

LunaLogisitk, the cargo division, has performed well during the health crisis. By cargo plane, it shipped tons of goods to from Asia, Africa, Europe and the Middle East. The company's biggest volume was focused on the demand for personal protection equipment from China to Europe. More than 100 million masks were supplied to European clients including French and UK government entities, luxury and retail groups, and various private corporations.

“LunaLogistik's capacity to deliver tons of PPEs in record time from the beginning of the crisis confirms the entrepreneurship spirit at the heart of our company values,” concludes Segard.

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