This website uses cookies
More information
Business Air News
Business Air News
The monthly news publication for aviation professionals.
See more information from the Business Air News Handbook...

AeroBid

Online Booking Platforms

BAN's World Gazetteer

U.K.
The monthly news publication for aviation professionals.

Request your printed copy

AeroBid queries whether industry can sustain rapid growth
Is business aviation to become a victim of its own success? Zaher Deir ponders whether manufacturing problems, used aircraft supply, maintenance and administration issues may put the kibosh on recent demand.

Over the last three years, private aviation use has soared. In 2021, 3.3 million private flights took off around the world, the most the industry has experienced to date and seven per cent higher than its previous boom in 2019. Even at the height of the pandemic, private aviation saw sustained demand while the rest of the travel and tourism sector plummeted.

Charter booking platform AeroBid founder Zaher Deir questions whether the industry is set to become a victim of its own success, since the surge in interest is creating pressure that it is arguably not ready for. If steps aren't taken to alleviate that pressure soon, will the continued flood in demand start to cause cracks that will be difficult to recover from, costing the industry the growth it has worked for? He looks at some of the pressure points.

A shortage of raw metals, parts and electronic components is causing manufacturing delays across the board, with every technology-related sector experiencing supply chain issues. In private aviation, this disruption is felt two-fold, with reduced supply hitting at a time of increased demand. Economic uncertainty is adding to the problem, with many suppliers unwilling to hold too much stock at once in case of a recession, creating further delays and bottlenecks along the supply chain. With private owners and aircraft lessors alike competing for new aircraft stock, aircraft operators will soon struggle to add new aircraft to their roster to fulfil their influx of flight requests.

The used aircraft market is booming but there just aren't enough to go around. As is the case in any sector, scarcity creates price increases, and low availability has caused used aircraft prices to rise 25-30 per cent in recent months. This fierce competition for aircraft is driven in part by those private charter operators looking to add more aircraft to their fleet, and unable to secure new models thanks to manufacturing issues, and in part by an uptick in interest in private ownership post-Covid. Interestingly, young affluent people are one of the biggest growth markets for aircraft ownership, with under 45s accounting for 27 per cent of sales according to pre-owned aircraft sales specialist Jetcraft.

The more journeys an aircraft makes, the more routine maintenance it needs, and with more aircraft in the air than ever before, maintenance facilities are under pressure to work through a higher volume of repairs and renovations than anticipated at a faster pace. Again, both the speed of growth and the threat of recession are preventing maintenance facilities from keeping up with demand. A steep investment in new equipment, locations and personnel is needed to make sure maintenance is readily available in spite of the surge, yet concerns that an economic downturn could see a sudden decline are potentially preventing active investment, in turn stalling growth by keeping more aircraft on the ground.

Both brokers and operators are feeling the strain of increased interest in private charter bookings. For brokers, it's more customers to secure bookings for in a highly competitive market. For operators, it's an overwhelming number of requests to sort through, price, quote for and secure, not to mention the added layer of managing the time and location of those bookings as efficiently as possible. If brokers and operators can become as efficient as possible when booking clients on to private charters, it could relieve some of the pressures felt elsewhere in the sector.

Deir believes that this efficiency is the first step to easing the industry's pressure points and enabling more sustainable and less risky growth. He says: “As an industry, we need to change how we operate, following the example of other sectors to use data and real-time communications to make our charter bidding processes easier and more effective. Just look at the problem with empty legs for instance: every empty leg is an opportunity to transport paying customers, but they are being wasted. If the industry can improve its efficiency, it will be able to sustain its rapid growth, which was why AeroBid was founded in the first place.”

What exactly the future holds for private aviation is unclear, but consumers have developed a taste for private aviation that, if managed effectively over the next year, could have a transformative effect on the industry.

Other News
 
Stronger regional team sets CF on course to celebrate 50 years
February 3, 2023
Chapman Freeborn has strengthened its regional management team, as well as adding to its Vietnam presence, as it prepares to celebrate 50th anniversary.
Vista sees revenue rise by more than half
January 27, 2023
Last year saw strong membership growth of subscription services and investment in infrastructure, scale, tech and sustainable aviation through company acquisitions. Another 117 aircraft were added to the member fleet.
Satcom Direct installs prototype SD Plane Simple Ka-band terminal
January 9, 2023
Testing has already begun. When fully functional, the Ka-band antenna will support high-speed data transfer for high volumes of users travelling on mid to large-size jets.