Air Charter Service has revealed its predictions for private jet travel in 2021. It says that private jet travel bookings will increase back to 2019 levels in 2021. Although private business travel will increase to 85 per cent of 2019 levels in 2021, an increase in leisure travel will make up for this shortfall. “Due to the impact of the pandemic on business travel, throughout 2020, ACS has seen a decline in business-related bookings of -31 per cent compared to its 2019 figures. This is a stark contrast to the positive significant increase in leisure inquiries (+49 per cent) and bookings (+14 per cent) that we have seen in 2020.
“We expect to see private business travel improve substantially in 2021 and return to approximately 85 per cent of the levels of business travel bookings that we saw during 'normal' times in 2019. However, we expect leisure travel numbers to make up for this shortfall in business travel. As companies re-engage with the world, they will find that disruption to scheduled services will make business itineraries difficult. As a result, businesses will start to turn to charter despite the inevitable economic problems that the world faces.”
More customers could turn to private aviation, however there will be fewer flights per customer, with clients taking smaller numbers of longer trips. “Continued disruption to the scheduled commercial flight network, which will be a long-term issue, and continuing concerns relating to hygiene when travelling commercially (a shorter-term issue due to the vaccine being rolled out) will continue to work in favour of private travel in 2021,” the report continues. “ACS has seen a 25 per cent increase in new customers booking throughout 2020. However, we expect this larger customer base will be travelling less on average next year compared with the average customer in 2019, taking smaller numbers of longer trips. Following months of lockdown, people can't wait to travel again and are wanting to go on trips for a longer duration to make the most of their time in a destination. The introduction of remote working arrangements is also likely to contribute to the increase in the number of people travelling for longer.
“We expect the trend of new customers booking to continue in 2021, with a further 25% increase in the number of people opting for private air charter next year. However, as we expect these new clients will be booking fewer flights per customer, we are predicting the total number of bookings across the market to remain constant with 2019.”
ACS forecasts that the Caribbean will continue to lure travellers, even once restrictions in other countries begin to lift in 2021: “Mexico and the Caribbean will always be strong end destinations for American leisure travellers. With relatively low coronavirus numbers and highly tourism-dependent economies, many Caribbean island nations like Antigua and St. Lucia started to welcome back international tourists for non-essential travel as early as last June. Despite global bans on travel and ongoing border closures, travel between the United States and Mexico has also continued relatively unrestrained through 2020. We see this interest in travel to Mexico and the Caribbean continuing in 2021, as we predict that international travel may remain a little slower this year. Travellers will prefer taking trips closer to home and more familiar destinations for their first vacation, before reaching further afield.”
4. New customers coming into private aviation will drive an increased uptake in carbon offsetting. ACS says more travellers will realise that, unlike many other industries, the technology to make aviation carbon neutral isn't available yet. However, there are industries where the technology to offset carbon exists, but the funds do not. Carbon credit systems are a way of funding investment in green projects, which would otherwise not receive the investment they need. As a result, offsetting more than 100 per cent of carbon from private aviation flights will be an option taken up by more customers either directly through charter providers or using their own schemes.
Luxury travellers will be looking for a more personalised service in 2021: “Owing to a lack of travel confidence in 2020 due to travel restrictions being put in place and ever-changing government updates resulting in vacation cancellations, people will be looking for a more personalised, trustworthy service when booking trips in 2021. This may play into the hands of high-end travel providers, and less so with impersonal booking platforms. Despite only seeing a five per cent increase in online inquiries in 2020, ACS saw a 25% increase in new clients overall. This is because people increasingly want to speak to an account manager in person, whereas previously they would have dealt with us digitally.
“ACS is also expecting an approximate 30% increase in numbers of high-end travel agents booking private jets. With the need for a more personalised service increasing, high-end travel agents offering bespoke itineraries will see a resurgence in demand. With continued disruption to the scheduled air network and the lingering hygiene fears surrounding commercial aviation, we expect more of these agencies to turn to private air charter in order to create the bespoke travel experience that their clients demand. This has already been illustrated by the tremendous uptake of ACS's private jet training events put on for travel agents in December and interest in attending further events next year.”
Finally, the company expects to see an increased number of competitor insolvencies in 2021, mainly in highly leveraged businesses in the private aviation sector. There are a number of companies that have invested heavily in gaining market share to make highly leveraged business models work. The reduction in sales earlier in the year will have caused damage to their already finely balanced finances. “We are already seeing a reduction in marketing spends from these companies that often portray the results of heavy marketing investment, as well as loss leading pricing, as illustrations of the success of their business model in order to generate new investment. Without the new customers generated through these strategies, the rate of growth will slow and, for some, that will mean serious cash flow issues, which may lead to insolvency.
“As we already have seen in 2020 with one such high profile private jet company's insolvency in particular, many jet card customers may lose their deposits if they have bought products from those companies, due to the fact their deposits have been used as working capital. ACS has already seen an increase in sales of its Empyrean card, with customers citing the main appeal of the product being the fact that their deposits are kept in a separate client account.”