The industry enters a perfect storm.
The private jet market is facing unprecedented challenges as the COVID-19 pandemic has aggravated an already fragile industry. The private jet charter market is down 33.8% in volume year-to-date and even lower in revenue, with Europe doing 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, predicts LunaJets.
The Perfect Storm
"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," predicts Alain Leboursier, Managing Director at LunaJets.
"Corporate flight demand, representing 70% of our business from September to Christmas, is weak despite really low rates on same-day returns or trans-Atlantic flights," notes Leboursier. "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."