Following the Swiss National Bank’s decision to uncap their currency from the Euro, the relative cost of goods and services inside Switzerland have soared in recent days. This includes the price of private jet and helicopter flights operated by Swiss aircraft.
The Swiss franc gained against every currency in the world at the end of last week, after Thursday’s unexpected decision to abandon the currency’s cap against the euro – this is being dubbed ‘Francogeddon’ by currency traders. The euro dropped the most against the franc since the European currency’s launch in 1999.
Swiss companies across all sectors are already feeling the pressure, with investors predicting a huge struggle for them to maintain their export sales. Watchmaker Swatch saw its share price fall by 15%, with its CEO calling the move a ‘tsunami’ for the Swiss economy.
The Swiss private jet industry will certainly be impacted. Private jet and helicopter operators based in Switzerland quote their prices in euros to give consistency with their Europe-wide competitors, but of course they are running their businesses on Swiss francs. So will not be able to keep competitive for very long against cross-border rivals – and will be forced to put prices up. We are already seeing the impact of this.
Switzerland punches way above its weight when it comes to private jets. The small country is the 5th largest private jet market in Europe – after France, Germany, the UK and Italy – with over 50,000 private jet departures in 2014.
Geneva is also the second busiest private jet airport in Europe (after Paris Le Bourget) and Paris Le Bourget to Geneva the most frequented route in Europe (closely followed by Geneva – Paris Le Bourget). So this is bad news for the aircraft operators and other service industries based there. See more: The private jet market in Switzerland.
However private jet customers flying in and out of Switzerland needn’t pay more. Private jet charter is a global business and a customer wanting to fly from Geneva to Paris can (and will) choose to book with a non-Swiss aircraft operator instead. An increasing number of clients are using an aircraft registered outside of the country of departure for their flight in any case.
At PrivateFly, our technology is integrated with the scheduling software for an increasingly number of aircraft operators, so we can see which aircraft are already on the ground at the departure airport – regardless of their country of origin. So we match the customer with the best aircraft and price options for their flight. So this might be a US-based aircraft that happens to be on the ground in Geneva for a few days awaiting its return flight, and is looking to pick up additional charter business in the meantime.
The exception is internal flights within Switzerland, for which a Swiss operator must be used under cabotage rules (the system designed to protect the commercial interests of native companies on domestic transport routes). So customers flying on domestic routes will have to use a Swiss aircraft for their flight.
This will impact prices on private jet and helicopter flights within Switzerland , which could increase in price by as much as 20%, depending on the exchange rate. This would mean a typical €4,000 flight from Zurich to Geneva in a Citation Mustang could increase by €800.
Swiss aircraft operators will be looking closely at the currency exchanges in the coming weeks and months. It’s going to be a very challenging time for them.
For advice on private jet or helicopter flights in or out of Switzerland, speak to our multi-lingual Flight Team (available 24 hours) on +44 1747 642 777.