Tidal Jets founder and CEO Ethan Levy shares his thoughts on the expected drop in private jet movements and demand after 2021 and 2022’s historic numbers while discussing what that means for the industry’s customers and top players in the foreseeable future.
The private jet market experienced an intense influx of demand driven largely by the industry’s ability to service an alternative method of travel while the airlines faced disruption during the pandemic.
As the pandemic continued, travelers maintained a degree of apprehension surrounding travel within crowded airport environments and often encountered difficulty in securing commercial airline availability.
Interest in private jet use soared in response and the industry witnessed a surge in activity from existing and first-time users of charter and fractional options.
As the pandemic period came to a close, demand started to normalize, and it has become apparent that the market is approaching a more sustainable arena.
The trend in demand
The change in demand has not been sudden, but reflective of an expected approach toward more manageable utilization levels. Business jet traffic is currently lower than the activity experienced in 2022, but higher than levels from 2019.
This trend is expected to continue as a segment of the first-time private jet users who harnessed the flexible capabilities of the industry during the pandemic ultimately return to commercial travel.
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The remaining first-time users, however, are expected to remain a positive contributing factor toward overall market longevity.
Current aircraft utilization, availability, and sales metrics are indicators of economic fluctuation and systemic issues such as supply chain constraints. The industry has demonstrated a steady ability to weather the storm of challenges during the adjustment in favor of a healthy correction.
Recent data from WingX Advance noted traffic levels between five and ten percent of activity in 2022 and between 15 to 20 percent higher than in 2019.
The data also suggests stable demand for new heavy jets while smaller cabin demand faces support from the ability to serve the regional airline deficiencies but is more easily hampered by economic instability.
In an effort to understand the change in demand and resulting utilization levels, it is important to consider the current state of the airline industry and its impact on business aviation.
The limited schedule availability of commercial airlines that prompted many users to turn to private jet travel during the pandemic has improved which has resulted in some of those users returning to commercial travel.
According to WingX, scheduled airline activity is nine percent higher than in 2022 for globally operated sectors, but 14 percent lower than in 2019. When focusing on the top five busiest airlines, levels are 11 percent busier than last year and eight percent higher than in 2019.
Leisure over business
At Tidal Jets we are seeing that those who have continued to elect to utilize private jets have demonstrated a trend of flying generally for leisure purposes. WingX data indicated support for this trend with weekend activity surpassing weekday travel on a consistent basis during the past 24 months.
The trend was also bolstered by activity to destinations favoring typical leisure hotspots instead of business-related locations.
The move away from business-focused travel is also made apparent by WingX Advance data that shows corporate flight departments still unable to fully recover flight volumes from 2019.
On the other hand, branded charter operations often used for leisure are ten percent higher than four years ago when evaluating flight volumes on a global basis.
The demand to serve record request levels during the pandemic led to challenges for industry providers as they needed to provide an expected high degree of service quality amidst an environment that was bursting at the seams.
The current correction is allowing for relief from the chaos and a more balanced setting for both providers and customers. The aircraft market is experiencing a similar trajectory where buyers are no longer met with sky-high pricing and sellers are facing a drop in demand.
The pandemic previously marked a period of new buyers in the aircraft market as demand for pre-owned aircraft ascended and buyers had to shift to considering new aircraft while pre-owned market inventory dwindled.
Now, sellers are met with heightened challenges as buyers are less incentivized to commit to paying premium price tags. It is expected that price reductions will continue in response to this change in alignment with a healthy value correction.
While the level of demand in the private jet industry has certainly changed since the pandemic, it has occurred at a manageable pace that did not come as a surprise to the market.
At Tidal Jets we believe that the healthy correction has allowed private jet providers to better serve customers with consistent availability and utilization levels. In the aircraft sales market, aircraft buyers can expect more reasonable market pricing and continued discounting.
Even though a portion of private jet users have returned to commercial airline service, the value proposition of private jet travel remains strong while the airlines struggle to keep up with demand further stressed by rising delays and cancellations.
The flexibility, reliability, and efficiency of utilizing private travel options continue to present an attractive opportunity for travelers who want to fly without disruption.
About Tidal Jets
Tidal Jets Inc. is a premier private jet brokerage firm revolutionizing how you fly. Founded by Ethan Levy and Jonathan Downs, two like-minded, forward-thinking aviation professionals, Tidal Jets brings a fresh perspective and extensive aviation knowledge to provide unparalleled service.
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