Private jet travel reaches new heights as pandemic eases
Original source: Fortune
Wealthy travelers are enjoying the good life on private jets like never before as business trips and vacations restart following a long hiatus during the pandemic.
October was the busiest month ever for private jet flights, marking just the latest milestone for an industry that has thrived during the COVID era. Travelers in the U.S. took 323,000 flights last month, surpassing a record set just a few months before in July, when there were 302,000 flights, according to Argus International, an aviation consultancy.
“Every time it looks like we’re starting to peak, things climb higher,” said Travis Kuhn, vice president of market intelligence for the company. “Demand for private air travel is incredible right now. Most of these flyers are high net worth individuals who could have flown private before and just didn’t.”
The reasons for the rise are simple: Well-heeled are eager to travel, but they want to minimize their exposure to the virus.
Their embrace of private jets has given the industry a huge lift. Wheels Up, the second-largest private jet operator in the U.S. went public in July. The company’s proceeds from the IPO will be spent on developing technology and expanding its fleet of more than 1,500 owned, leased, managed, and partner aircraft.
Meanwhile, private jet operator JetEdge received $150 million in financing and a $40 million investment from private equity giant KKR. It has used the financing to buy 27 aircraft, bringing its total fleet to more than 100 aircraft.
Buoyed by the rise in passengers, several private aviation companies have announced plans to halt sales of jet cards, or pre-purchase hours of flights, to new customers. Many companies have also raised prices because, well, they can. Depending on the route and the type of jet, charter fliers are paying up to double what they did a year ago, according to Craig Ross, who served as the chief operating officer of NetJets’ Marquis Jet Card for a decade before launching aviation advisory firm Aviation Portfolio 10 years ago.
For the entire year, the number of private passenger flights are expected to climb 38% this year, to 3.3 million in the U.S., according to Argus International.
Aspen-Pitkin County Airport, home to the tony Aspen ski resort and multi-million-dollar homes, is prime example of the rise in private flights. It had nearly 18,000 private jet landings and takeoffs during the first six months of the year, up 35% from during the same period in 2020, said airport director Daniel Bartholomew.
Private flights comprise nearly 80% of all aircraft operations at Aspen-Pitkin, up from 68% in 2019.
Private jet operators are scrambling to keep up with the demand. NetJets, the world’s largest private jet operator, plans to spend $2.5 billion on 128 new aircraft, growing its fleet to more than 850 jets by late 2022.
“Their biggest challenge is not about finding customers,” said Kuhn. “It’s finding planes. The operators have the demand but not the supply.”
NetJets suspended its jet card sales and created a waitlist in August after an earlier price hike failed to curb demand. In 2020, during the darkest days of the pandemic, the company had a 350% rise in new customers compared with the year prior. The company forecasts “sustained demand for the foreseeable future,” according to Patrick Gallagher, president of sales and marketing.
Flexjet, a fractional jet operator, and its sister company Sentient Jet, a private jet broker, have stopped selling jet cards to new customers, as has Jet Linx, another private jet operator. Additionally, several operators are now charging a premium for flying on heavy demand days.
“I did not think I’d see this day,” said Ross. “NetJets made a bold move by suspending jet card sales. Once the biggest player in the space did it, it allowed other companies to do it.”
This has opened the door for smaller companies eager to court new customers.
“It’s really a great opportunity to gain loyalty for many years to come,” said Anthony Tivnan, president of broker Magellan Jets. The company’s business from new customers has grown exponentially, as well as with people unable to renew their jet card memberships with competitors.
Last week, the jet broker introduced its Light Access Card, an entry-level jet card aimed at customers flying for personal travel.
“COVID has changed the narrative around flying private,” said Tivnan. “It’s not about the luxury; it’s about keeping people safe.”
JetEdge has seen an uptick in demand for one-way flights to leisure destinations from Coeur d’Alene, ID to Cabo San Lucas, Mexico. The company has collected more than $100 million in customer deposits this year for future flights with the launch of its Reserve Membership program targeting fractional and jet card flyers.
“This is truly one of the largest economic booms in our lifetime,” said Jonah Adler, JetEdge’s chief commercial and marketing officer. “The spending’s not going to stop anytime soon.”
Correction (11/19/21): Due to incorrect information provided by Magellan Jets, an earlier version of this article misstated the pricing for its Light Access Card. Each hour of flight costs $5,900.