Pre-owned corporate aircraft transactions have seen a major spike, now nearing 2019 levels, as cashed-up travellers pay to avoid commercial flights amid the global pandemic, according to an aircraft brokerage.
The trend has now begun to drive up demand for new private aircraft, according to lawyers and brokers dealing with such matters, as older models become more scarce, in a move unforeseen by the business aviation industry that has braced for a prolonged slump.
Don Dwyer, managing partner at Guardian Jet, which deals with aircraft brokerage, appraisal and consulting, has said that there’s “so much more activity” in the private jet space than was anticipated at the beginning of the COVID-19 crisis.
“In April you could hear crickets chirping for new orders,” he said.
Corporate aircraft, built to transport just a handful of passengers, are proving extremely popular under current circumstances, as wary passengers can travel without hustling through busy airports, and can generally hand-select who comes onboard.
Meanwhile, private charter companies appear to have recovered far better than commercial airlines to date, with operators such as NetJets reporting improved demand over the northern hemisphere summer months.
Corporate planemakers, including Canada’s Bombardier have also been watching closely for a rebound in leisure flights to translate into new aircraft order.
The private jet analyst delivered a total of 809 new business jets in 2019, after hitting its historical peak of 1,317 deliveries prior to the GFC in 2008, according to analyst Brian Foley.
However, transactions for pre-owned private aircraft for the year-to-date in 2020 range from flat year-on-year, to down 8 per cent at worst, depending on the data source.
Notably, during the third quarter of 2020, transactions rose 9 per cent to bring the total for the year to 643, according to JetNet IQ data.
Small to medium-sized planes, carrying up to 10 passengers, are especially in demand for domestic leisure travel, according to industry sources.
Business aviation flights in the US, Caribbean and Canada were up 1.2 per cent in September when compared with August, but remain down almost 17 per cent on an annual basis.
Amanda Applegate, a partner at Aerlex Law Group, said she has done post-COVID-19 transactions for new-model Bombardier Challenger 350s, Embraer Praetors, along with Gulfstream G500 and G600 jets, some of which were for clients who previously flew commercially.
More first-time buyers and clients who used to fly commercial at least part of the time now opt to fly private either because of concerns over COVID-19, or because airlines have scaled back their schedules, she said.
Meanwhile, Florida attorney Stewart Lapayowker has noted a trend of planemakers offering discounts in order to win customers during this challenging economic climate.
“I think you’re seeing manufacturers get realistic about their new aircraft pricing,” he said.
