1. Private jet travel bookings will increase back to 2019 levels in 2021. Although private business travel will only increase to 85% of 2019 levels in 2021, an increase in leisure travel will make up for this shortfall.
“Due to the impact of the pandemic on business travel, throughout 2020, ACS saw a decline in business-related bookings of -31% compared to its 2019 figures. This is a stark contrast to the positive significant increase in leisure enquiries (+49%) and bookings (+14%) that we saw in 2020.
We expect to see private business travel improve substantially in 2021 and return to approximately 85% of the levels of business travel bookings that we saw during ‘normal’ times in 2019. However, we are predicting that leisure travel numbers will make up for this shortfall in business travel. As companies re-engage with the world, they will find that disruption to scheduled services will make business itineraries difficult – as a result, businesses will start to turn to charter despite the inevitable economic problems that the world faces.”
2. More customers will turn to private aviation for leisure bookings; however, there will be fewer flights per customer, with clients taking smaller numbers of longer holidays.
“Continued disruption to the scheduled commercial flight network (which will be a long-term issue) and continuing concerns relating to hygiene when travelling commercially (a shorter-term issue due to the vaccine being rolled out) will continue to work in favour of private travel in 2021.
The full implications of Brexit may also mean longer queues at arrivals and longer travel time for many people travelling between the UK and Europe once restrictions on travel are eased, which will lead to an increasing number turning to private aviation.
ACS saw a 25% increase in new customers booking throughout 2020. However, we expect this larger customer base will be travelling less on average in 2021 compared with the average customer in 2019, taking smaller numbers of longer holidays. Following months of lockdown, people can’t wait to travel again and are wanting to go on trips for a longer duration to make the most of their time in a destination. The introduction of remote working schemes is also likely to contribute to the increase in the number of people travelling for longer.
We anticipate the trend of new customers booking to continue in 2021, with a further 25% increase in the number of people opting for private air charter this year. However, as we expect these new clients will be booking fewer flights per customer, we are predicting the total number of bookings across the market to remain constant with 2019.”
3. The recovery will be bumpy, as turbulent ‘on’ and ‘off-peak’ booking patterns will continue in 2021. We will see these booking ‘spikes’ when restrictions are relaxed in each region.
“Looking at our travel restrictions guide, pre-Christmas figures in 2020 showed that only 3% of countries were open to tourism without any restrictions and 63% were in partial or full quarantine.
As more countries open up to tourism and local restrictions are eased, we expect to see spikes in demand in different regions in 2021. Brexit may also cause significant spikes and collapses in demand in Europe. For example, if restrictions start to lift across Europe, we will potentially see a spike in bookings between the UK and the EU, as people look to escape after months of being in lockdown – just as we saw after the first lockdown in 2020.
Short-haul European destinations will continue to be popular. Interestingly, we have seen that families who would usually travel to the US or Asia by First Class are holidaying in Europe instead and by private jet – the costs of which are comparable.
The Top 5 most popular destinations that our UK customers travelled to in 2020 were: Nice, France; Faro, Portugal; Palma, Mallorca; Malaga, Spain and Ibiza. We expect that these destinations will continue to be popular in 2021, as soon as they are accessible for UK travellers.”
4. New customers coming into private aviation will drive an increased uptake in carbon offsetting.
“More travellers will realise that, unlike many other industries, the technology to make aviation carbon neutral isn’t available yet. However, there are industries where the technology to offset carbon exists, but the funds do not. Carbon credit systems are a way of funding investment in green projects, which would otherwise not receive the investment they need. As a result, offsetting more than 100% of carbon from private aviation flights will be an option taken up by more customers, either directly through charter providers or through their own schemes.
The new customer base of clients choosing to travel by private jet are more conscious and aware of carbon offsetting and its value. We launched our carbon offsetting programme in February 2020 to enable customers to offset the carbon emissions from their flights by adding a 0.5% fee to their next flight. This contribution is invested by ACS into buying carbon credits from carbon offset schemes certified by the United Nations and Gold Standard. ACS does not take a commission or charge a margin, so customers know that their entire contribution will go towards carbon offsetting.”
5. Luxury travellers will be looking for a more personalised service in 2021.
“Owing to a lack of travel confidence in 2020 due to travel restrictions being put in place and ever-changing government updates resulting in holiday cancellations, people will be looking for a more personalised, trustworthy service when booking trips in 2021. This may play into the hands of high-end travel providers, and less so with impersonal booking platforms. Despite only seeing a 5% increase in online enquiries in 2020, ACS saw a 25% increase in new clients overall. This is because people increasingly want to speak to an Account Manager in person, whereas previously they would have dealt with us digitally.
ACS is also expecting an approximate 30% increase in numbers of high-end travel agents booking private jets. With the need for a more personalised service increasing, high end travel agents offering bespoke itineraries will see a resurgence in demand. With continued disruption to the scheduled air network and the lingering hygiene fears surrounding commercial aviation, we expect more of these agencies to turn to private air charter in order to create the bespoke travel experience that their clients demand. This has already been illustrated by the tremendous uptake of ACS’s private jet training events put on for travel agents in December and interest in attending further events this year.”
6. There will be an increased number of insolvencies amongst private jet companies in 2021; especially those that are highly leveraged.
“We expect to see a number of insolvencies in our industry for those business models which required high levels of growth in order to stay in business.
There are a number of companies who have invested heavily in gaining market share to make highly leveraged business models work. The reduction in sales in early 2020 will have caused serious damage to their already finely balanced finances. We are already seeing a reduction in marketing spends from these companies who often portray the results of heavy marketing investment, as well as loss leading pricing, as illustrations of the success of their business model in order to generate new investment. Without the new customers generated through these strategies, the rate of growth will slow and, for some, that will mean serious cash flow issues which may lead to insolvency.
As we already saw in 2020 with one such high profile private jet company’s insolvency in particular, many jet card customers may lose their deposits if they have bought products from those companies - due to the fact their deposits have been used as working capital. ACS already saw an increase in sales of its Empyrean Card towards the end of 2020, with customers citing the main appeal of the product being the fact that their deposits are kept in a separate client account.”
www.aircharterservice.com
~ENDS~
About Air Charter Service
Air Charter Service is a global aircraft charter broker with 27 worldwide offices, spanning all six major continents and we offer private jet, commercial airliner and cargo aircraft charters, as well as onboard courier solutions. We arrange more than 23,000 charter flights annually with revenue of close to 700 million dollars. We were formed in 1990 by Chairman Chris Leach and CEO Justin Bowman in the basement of a house, and we now employ more than 500 staff worldwide.
For more information, an interview or additional images please contact:
Glenn Phillips / PR & Advertising Manager
Tel: +44 (0) 20 8339 8593 /+44 (0) 7799 692 629
Email: glenn.phillips@aircharterservice.com
For more information, an interview or additional images please contact:
Glenn Phillips, PR & Advertising Manager
Tel: +44(0) 7799 692 629
Email: glenn.phillips@aircharterservice.com