JAKARTA -- In October 2019, Honeywell Aerospace predicted that up to 7,600 new private jets would be purchased for an eye-watering $250 billion over the following 10 years -- a 60% increase over the 4,600 jets in operation at the time. The outlook was even rosier for Asia, where additional jet purchases were projected to equal 10% of the global market within five years.
Six months later the pandemic hit and the aviation sector entered its biggest downturn in history. Popular routes and schedules for commercial airlines were axed or pared right back, and the outlook for jet sales is now essentially flat year-on-year, according to the Sherpa Report, a database for private aviation.
Yet there is an entirely different narrative when it comes to chartering out private jets.
In January, India's Pune-based consultancy Data Bridge Market Research released a report projecting 3.1% annual growth globally for charters through to 2027. However some brokers and operators of private jets in Asia are reporting far greater spikes in bookings from high-net-worth individuals and multinational corporations willing to pay hefty premiums to mitigate their exposure to COVID-19 and fly privately.
U.S. research firm MarketsandMarkets forecasts the world's business jets market will grow from an estimated $18.8 billion in 2020 to $38 billion by 2030.
A study by McKinsey & Company shows that users of private jets are getting their money's worth. On commercial flights, passengers come into contact with other people and objects an average of 700 times, while on private flights the number of touchpoints is only about 20 and passengers do not have to wait for check-in or security procedures with other travelers.
Add to this the plush, roomy seating, flexible departure times, total privacy and access to 10 times more airports than commercial flights, and the appeal of flying privately is obvious.
"As soon as the pandemic began we started getting a lot more enquiries," says Stefanus Gandi, director of Indojet Sarana Aviasi, a private jet broker in Jakarta, Indonesia.
"From March to July it was mostly from the mining, oil and gas sector for business trips to [the Indonesian provinces of] Sulawesi and Kalimantan. But when domestic travel resumed in August our customers started combining business trips with family holidays, and during the end-of-year holiday season we got lots of booking from wealthy Jakartans traveling to Bali and Flores," Gandi says, adding that business doubled in the second half of 2020 compared to the same period the previous year.
"The cost of private jets is higher in Indonesia than the U.S. or Europe," he says. "To fly from Jakarta to Bali costs $20,000 for a six-seat jet or $40,000 for a 13-seater. But our customers are not concerned because they can't afford to have their business interrupted or don't want their holidays cancelled because of COVID-19."
Air Charter Services, a private jet broker with 28 global offices, reported a 150% spike in bookings for Asia when the pandemic began. "Many travelers were left displaced in February [last year] after visiting their families for the Chinese New Year," says James Royds-Jones, the company's director for private jets in Hong Kong.
"This created a flurry of bookings from people who were urgently trying to escape Asia and the pandemic. But in the second half of the year, we received bookings from people trying to get back to Asia as the pandemic worsened in the West. We recently flew to Boston to pick up two Chinese students." Royds-Jones says the pandemic has changed both the nature of charter flights and the type of clientele.
Vista Global, a global private jet operator headquartered in Malta, has also found new clients during the pandemic. This year it will fly dozens of competitive Ferrari drivers from their homes around the world to Ferrari Challenge races at Sepang in Malaysia, Beijing, Singapore, Yeongam in South Korea and the Fuji Speedway in Japan.
"We plan to get them there safely and in optimal condition, so they can focus on what is the most important -- the competition and performance on the track," said Thomas Flohr, Vista Global's founder, when the agreement was unveiled at Le Mans race track in France last year.
But despite the increased demand during the pandemic, there are also new sets of administrative challenges for operators of private charters.
"Unless a customer has a diplomatic passport, we cannot offer international flights. It's just too complicated with restrictions and border closures that are always changing," Gandi says. "We also have to ensure our passengers are not infected COVID-19. We do this by sending a paramedic to their home for a free swab test before they fly."
Air Charter Services is allowed to dispatch jets with only crew onboard to collect passengers in mainland China. But to take in passengers they need clearance from CDC, China's center for disease control and prevention. "To get a hold of that letter is very difficult," Royds-Jones says. "And to fly into Malaysia, Cambodia or Thailand we really need to jump through hoops. Passengers need a business visa and a letter from the destination country's embassy."
Nevertheless, both groups anticipate that bookings for private charters will remain high this year and into next. "I think returning to normal after the pandemic for commercial airlines will not be easy after canceling so many routes," Gandi says. "And people are now more conscious about health and safety and will want to fly private."
"It will be some time until restrictions fully loosen," Royds-Jones says. "It's quite difficult to predict when that will happen, perhaps not until 2023. But when things do calm down we will see a sudden spike of people looking to travel. And I think it's only natural that more high-net-worth people will look toward chartering."