Jetcraft’s Peter Antonenko on what the future holds for private aviation
The COO of Jetcraft tells us how the private jet industry is adapting to recent challenges posed by Covid-19
As the COVID-19 global pandemic evolves, the private aviation industry has had to adapt, overcoming many of the challenges it poses. Speaking from first-hand experience, Peter Antonenko, Chief Operating Officer for Jetcraft, shares insight into how the industry has fared during these tumultuous times, and what the future holds for this sector.
Recent global announcements surrounding the reopening of borders, travel corridors and vague exit strategies from lockdown keep us in a state of flux. Entire aircraft fleets have been grounded and aircraft manufacturers are announcing staff cuts as a consequence of the pandemic.
While uncertainty prevails, what we can be sure of is business aviation’s increasing value amongst the ultra-high net worth (UHNW) community. The efficiency, flexibility and control that comes with flying privately, compared to commercially, and the ability to reach anywhere at a moment’s notice while avoiding large crowds and restrictive flight timetables, are all becoming enticing commodities.
Jetcraft’s 20+ offices located around the world provide us with a unique global viewpoint to observe, report and predict how the industry has and will react to this unprecedented crisis. Our most recent annual market forecast correctly predicted a downturn in the market, albeit not on this scale. Our forthcoming market forecast will consider the impact of the pandemic on the industry, in particular, analysing the moves made by aircraft manufacturers and predicting the long-term effects on market values, with close attention paid to the pre-owned segment.
As a whole, we expect our sector to recover faster than that of commercial. Global commercial air traffic is predicted to continue to decline, with airlines forecast to lose billions in revenue this year. According to the WINGX weekly Global Market Tracker, through June 2020, global business aviation trailed the comparable 2019 period by 30%, proving more resilient than global scheduled flight activity as a whole which was down by almost 50%. This presents an opportunity for private aviation to showcase its critical advantages. With many airliners parked and routes significantly reduced, fewer commercial travel options are available and private aviation is poised to take on some of the needed volume. Further, the safety and hygiene afforded by exclusive private jet cabins compared with airline cabins, as well as the benefits of travelling through private terminals compared to commercial airports, are now increasingly important considerations for business travellers. >>
Related: Rosewood Hong Kong’s cultural ambassador Lotus Leung sheds moonlight on her city’s best attractions
Regrettably, the existing customer base may shrink in the short term due to the effects of the COVID-19 outbreak, but we also anticipate incremental increases in private aviation use. The need for improved personal security, a shortage of commercial routes, and the convenience of flying privately, means the business aviation market, as a whole, should see an increase in new users, notably by individuals and corporations who might possess the means to fly privately but have, until now, chosen otherwise. Further, the value proposition for existing aircraft owners has come to the fore.
The IADA (International Aircraft Dealer’s Association) has reported over 150 aircraft transactions amongst their membership from March – May 2020, and more than 60 additional aircraft were under contract as of the end of May. Since government restrictions have been put in place, Jetcraft has signed multiple contracts and Letters of Intent and is closing aircraft despite the COVID-related issues. We’re also accepting trades and purchasing aircraft for our own inventory, so we have a lot of confidence in the market and industry right now.
We’ve had to be nimble and creative, navigating the most intricate deals and the most urgent, such as closing on a US-based Embraer Legacy 450 aircraft in a record-breaking seven days last month. The aircraft was owned by Jetcraft, which gave us complete control as the seller, and nearly brand new, therefore it didn’t require a pre-buy inspection. Unique to this pandemic, we were able to bring the aircraft directly to the buyer for a viewing, which is just one of the many ways we’re adapting to assist clients and keep them safe while travel restrictions are still in place. >>
Related: These historic listed houses are the ideal Autumn getaway for supporters of the National Trust
Technology has also been essential to our operations and deal creativity. With many destinations still under lockdown or with extensive quarantine restrictions upon entry into several countries, communicative tools such as Microsoft Teams, WhatsApp, Skype and WeChat enable us to stay connected to our customers and employees. These platforms shorten distances – bringing us together to ensure we remain open and ready to transact. Jetcraft have facilitated several virtual aircraft viewings for prospective buyers, including a Challenger 604 last month, and an Embraer Phenom 100 just this week. We also note that, while technology is and has been supplemental to business communications, it cannot replace the benefits of personal interaction, which remains the cornerstone proposition of air travel, both private and commercial.
Throughout our 55+ years in business, we have seen business aviation prevail through global economic ups and downs. Unlike prior upheavals, we are already starting to see the market pick up, and once exit strategies gain momentum, we anticipate this will only continue. Thanks to the valuable lessons we’re learning during this time, and by remaining in close unison with our industry partners, we are prepared to weather this storm.