Assessing the state of private aviation

IS THE SKY THE LIMIT?

ASSESSING THE STATE OF PRIVATE AVIATION

By Georgia Tindale

As we emerge from the COVID-19 pandemic and are confronted with yet more complex economic challenges - the war in Ukraine, inflation spiking, the cost of living: the list goes on - it may be tempting for those working in luxury spheres such as yachting and private aviation to paint an optimistic picture of the current market, with demand for both yacht and private jet charters having experienced a notable hike between 2020 and the early months of 2022.

But, as the quote often attributed to Isaac Newton goes: “What goes up, must come down”. Here, Alain Leboursier, managing director of LunaJets, a private jet charter company with offices in Switzerland, France, Dubai, the UK, Monaco and Latvia, gives us his candid take on the current state of private aviation, offering a glimpse of what the future might hold, and his advice on how to weather the turbulent months ahead.

Sky-high growth

As Alain explains, the current state of private aviation is far from rosy. “Putting it briefly: the market is down and we are heading into a perfect storm.”

He continues: “We had an amazing summer, breaking record after record – with demand from customers growing, fuel prices increasing and a shortage of supply, which resulted in our company growing by nearly 47 per cent in 2020 / 2021 and by 58 per cent in the first half of 2022.

This industry-wide growth was completely unsustainable, with customers paying double what they used to in 2019. Many new players in the industry thought this was the ‘new normal’, but this was very naive.”

What goes up…

This gloomy picture is borne out by the numbers. “In August, we saw a massive drop in demand. Numbers are going anywhere between minus 20 to 30 per cent. We have seen worse in the past, like when COVID hit and we saw a drop of 80 per cent, or when the markets really crashed in 2008-9, but we really have to keep an eye on what is happening. Globally speaking, with the current state of the stock market, the interest rates, sky-high inflation and so on – I think we are going to see a big recession in the next six to nine months.”

An escape hatch?

As Alain sees it, the path out of this challenging situation for aviation companies can be found through two factors: careful preparation and prioritising the customer at all times.

“Thankfully, thanks to our long experience in the industry LunaJets is very well-positioned and saw this coming. We have a strong business model and are cash-rich, which should help us weather the storm. You also have to put the client back at the centre of your business model; make sure you are responsive to their needs at all times, flexible, and provide the best possible service at all times. This will help you retain your loyal customers, even if the market is turbulent.”