How Solid is Today’s Private Jet Charter Market?

With the Business Aviation industry finding a new ceiling in demand during the immediate aftermath of Covid and the private charter sector being a prime beneficiary, does the subsequent dip in private flight activity as the scheduled airlines recover from their own pandemic disruptions mean the market is returning to its previous levels?

The answer is a resounding ‘no’ if you ask Paul Doherty, Managing Director for ACASS Ireland (pictured below). “The charter business is strong in 2024, particularly in the summer months for which we received a high volume of forward bookings," he reveals.

According to Doherty, ACASS has seen an increase in bookings for both business and leisure travel, with the mixed fleet of short and long-range aircraft allowing the company to capture business across various sectors. 

Regional Private Jet Charter Trends

Providing charter services worldwide, ACASS’s headquarters are in Montreal, Canada and offices in Europe (London, Shannon, Ireland) with regional presence in Asia, the Middle East, India and Africa, giving Doherty a rounded view of how charter demand is looking in different regions of the world.

“In Europe, for example, on an annual basis the split between leisure and business is relatively even, but leisure travel has more peaks in the summer months whereby business travel is flatter, albeit with a higher baseline,” he shares.

“Small to Mid-size Jets are the preferred choice for European travel, and in particular we’ve seen aircraft types like the Cessna Citation XLS, Pilatus PC-24 and Dassault Falcon 2000 remain popular for the shorter two-hour flight sectors.” The Gulfstream G450 and

Bombardier Global XRS are generally requested where sector lengths vary between two to six hours, he adds.

In contrast to Europe, within North America the “overall demand is primarily driven by leisure travel,” while in Eastern Canada there is a mix between leisure (weekends) and business (weekdays), typically utilizing Light Jets and Turboprops.

“International travel from North America is generally for business purposes with travelers preferring Super Mid-size Jets,” he continues, adding that the Caribbean routes “see a mix of shorter leisure trips and occasional business travel, depending on the season and specific destinations”.

And Doherty reckons the trends are similar to what others within the charter industry are seeing, with many operators in North America and Europe experiencing demand from a mix of leisure and business travel, varying trip lengths, and mixed preferences for different types of aircraft. “Based on our regular exchanges with industry partners, we see these trends industry-wide,” he shares.

“I’d also add that we have seen significant growth in the Middle East – business jet traffic out of Dubai has increased by over 140% since 2019 and is an area ACASS is actively increasing its presence in.”

The overall picture of how the private charter industry is faring holds few surprises to Doherty who sees things mostly developing as ACASS had expected. H2 2024 is so far generally is in line with H1.

“With that said, we have seen a significant increase in charter demand for the UK domestic market, particularly for the lighter aircraft,” he notes. “This would appear to be driven by the shortage of charter aircraft available to operate commercially on UK domestic routes; something which only the ‘G’ [British] and ‘EJ’ [Irish] registries offer.

“We have also been pleasantly surprised by the increased demand for charters to new destinations in Canada. More clients are exploring lesser-known parts of the country, which has positively impacted our business.”

Challenges to Private Jet Charter Today

The strong demand for private charter doesn’t mean the sector isn’t facing challenges, and leading charter providers are having to be proactive to navigate these and keep their services competitive.

“The main challenges are increasing operating costs and stricter regulations for certain destinations,” Doherty explains. “Having to compete on price with the larger European and US operators can be challenging, particularly during the low demand months.

“Costs directly connected to economic and political events – such as jet fuel, navigation fees, catering and crew travel costs – have all increased over the past 18 months as a result of Covid,” he elaborates. “The recent European conflicts, and strong inflation in North America and Europe have exacerbated these.”

Doherty notes a decreasing trend in sector lengths which, on a per hour basis, “has increased the cost due to certain ‘fixed’ costs associated with each sector – for example landing and handling fees, airport fees, fuel burn, maintenance cycles, and more”. 

ACASS is working to address these challenges, primarily through optimizing its operations to reduce costs, while working closely with local authorities on the regulatory front, Doherty assures.

“Given our office locations in Canada, Ireland, and San Marino, we are effectively a 24/7 operation which allows us to react to last minute requests ensuring utilization remains high,” he illustrates.

 “And forward route planning through effective communication between our charter and operations teams allows us to manage the aircraft’s costs more efficiently, such as through management of fuel, parking, aircraft opening hours and crew rest.”

Meanwhile, ACASS has taken steps to enhance its marketing focus to compete more effectively with its competitors, particularly those in the US. Staying customer-centric, flexible, and responsive will be key to overcoming the challenges, Doherty underlines.

Nevertheless, opportunities are also presenting themselves amid the challenges – particularly as ACASS focusses on unique destinations and providing personalized services that highlight local attractions.

“Sporting events such as the Champions League final, Euro 2024 and the Olympic Games all present significant opportunities [for private charter operators] to capitalize on,” Doherty notes. “Being reactive and flexible to meet clients' expectations and adapting to political tensions that affect flight paths and safety are also critical.”

Private Jet Charter Demand to Increase?

Looking ahead, ACASS expects Q3 2024 to remain positive with a dip in charter activity for Q4 – a trend ACASS expects to last through 2025. However, asked for his prediction for the wider private jet charter industry longer term, Doherty expects to see growth, attributable to the ‘progressive democratization’ of Business Aviation, meaning users of business aircraft no longer need to be owners.

Stable political relations, economic markets and flexibility in regulations will be essential in facilitating the growth of the private aircraft charter industry and meeting travelers' changing needs, he notes.

“Since Covid, the level of new charter clients has increased, resulting in the traditional model of private owner flying changing to private and commercial flying,” Doherty says.

And the additional recent launches of online platforms looking to disrupt the traditional charter booking process and bring about more transparency to charter pricing can only help with the ‘progressive democratization’ Doherty speaks of.

“Fractional ownership is also on the rise for clients that don’t fly enough to warrant owning an aircraft, and to satisfy the excess flying demand of aircraft owners who also use their aircraft for external charter. It’s all good news for the industry,” he concludes. 

More information from: https://acass.com