In 2023, the business and private aviation industry is a dynamic sector with both challenges and opportunities, as it adapts to shifting market conditions and evolving client needs.
1. Market Dynamics and Predictions
The aviation industry, specifically the business aviation sector, is in a period of “give-and-take” in 2023. While aircraft brokerage has seen all-time highs in transactions in recent years, a softening is expected in 2023. However, the availability of pre-owned inventory is likely to increase, a relief for brokers who’ve faced shortages in the recent past. This increased inventory will benefit buyers, who can anticipate a greater selection of used aircraft and potentially more noticeable price decreases. However, increased lease and finance rates might offset these advantages. Sellers, on the other hand, face the challenge of rising inflation and potentially reduced prices due to increased inventory.
2. Steady Demand Despite Challenges
Despite some predictions of a slight decrease, the overall demand for private aviation is expected to remain robust in 2023. Demand for private jet travel has surged since 2020, and even though the peak may have passed, it’s believed that demand will continue to hover closer to its high points than its lows. This is largely due to the convenience and comfort that private jet travel offers over commercial alternatives. The pandemic has shown many travellers the benefits of private air travel, and it seems unlikely that they will revert to commercial travel unless absolutely necessary.
3. Rise in Private Jet Ownership
Simultaneously, there’s been a rise in private jet ownership. Many who’ve experienced the convenience of private air travel have chosen to purchase their own aircraft. Notably, private flights and corporate flights were higher than last year, despite a drop in private jet charter flights. Owning an aircraft provides a degree of immunity to fluctuations in charter rates, and it is particularly convenient for those who fly over 400 hours per year.
4. Aircraft Management Services Gain Popularity
With the rise in private jet ownership comes an increased need for aircraft management services. Jet owners are seeking out these services to cope with the rising costs of fuel and maintenance. Aircraft management companies offer various services, including access to flight staff, aircraft storage, certification, and even exclusive discounts on fuel and maintenance. These benefits make aircraft management companies an attractive option for jet owners in 2023.
5. Private Jet Membership: A Rising Trend
In the face of steady demand, competition for private jets can be intense. This has led to an increased interest in private jet memberships, which offer direct, priority access to preferred aircraft and secure rates. Memberships also often come with added perks, like discounted hourly rates and occasional jet class upgrades, making them an attractive choice for many private jet travellers.
In conclusion, 2023 is shaping up to be a year of nuanced shifts in the business and private aviation industry. While challenges like softening demand and increased finance rates exist, opportunities in private jet ownership, aircraft management services, and private jet memberships present exciting possibilities for the future of the sector.