Seven business aviation predictions for 2014
As another year draws to a close, it’s time to reflect on a busy year at PrivateFly – and across the industry. And to think ahead to what 2014 may bring.
2013 has been a truly exciting year for our team. The market remains challenging but we’ve still managed to achieve significant growth, including further development of our brand in several other territories. We’ve been particularly focused on France and Germany, and now have a number of multi-lingual team members, as well as our translated web platforms.
A real highlight of the year has been significant progress on our multi-platform offering, including our biggest ever flight booked via our app – a $500,000 multi-leg trip from the Middle East to Europe. It’s clearer than ever that today’s private jet customer is becoming more comfortable using new technology to arrange their business aviation.
And beyond the booking stage – we’ve also been working on enhancements to the app for our existing customers, so they can make changes to their flight bookings through the app and we can provide their flight updates that way.
So looking ahead, what will 2014 bring? Here’s my view.
1) More tentative steps towards recovery
Obviously the big story for the whole industry remains the challenging economic climate – and I think this will remain the case in 2014.
This time last year we did a survey with online industry magazine BlueSky Business Aviation News, asking global industry professionals what they expected to see happen in 2013 in terms of industry growth or decline.
The most popular answer was that they expected it remain static. The 35% who expected to see some return to growth turned out to be a little optimistic: Latest data from WingX at the end of November shows that flight volumes in Europe were down 2.7% year-to-date, against the previous year. The market in Europe is still going to be tough in 2014 but I think some optimism is justified.
2) Continued polarisation of aircraft choice
A clear trend in the charter market this year has been demand growth at the opposite ends of the size spectrum – despite the decline overall. Very Light Jets, such as the Cessna Mustang, at one end and the Ultra Long Range (ULR) jets – notably the Bombardier Global Express – at the other. The strength of the ULR category is particularly noticeable, with a 14% increase seen in demand in Europe’s charter market year-on-year. The Very Light jets saw 6%. Most other aircraft categories were static or in decline.
This is set to continue. 2014’s private jet customer will choose either cost-efficiency or luxury. But increasingly avoid the middle ground.
3) All hail the King (Air) on its golden jubilee
The king of the Turbo Props – the Beechcraft King Air, will celebrate its fiftieth anniversary in 2014. And it looks set to be a golden year in more ways than one. Like the Very Light Jet category, is has proved more resilient to the recession than other aircraft types.
King Air aircraft are noted for being modern, comfortable, fast and quiet. Some models also have an exceptional VIP luxury interior – rivalling any private jet aircraft. But perhaps the factor that really defines them in the charter market, is their cost-efficiency.
Generally King Airs provide the best possible pricing of any aircraft for short flights of under 2 hours, and with seats for between 7 and 9 passengers, the price per person is often surprisingly low – as low as £500/€600 per person for a short return flight.
I think we’ll see the King Air go from strength to strength in 2014.
4) A strong 2014 summer season in Europe
I predict we’ll see more variable seasonality in demand in 2014, with a particular spike in the summer months in Europe.
We have seen this pattern start to develop over the last couple of years. The summer sees business and leisure demand coincide, and while business aviation is bearing the brunt of the recession, the market for private aviation (leisure) charter in Europe is rising, particularly in the summer months. Airports such as Nice Cote D’Azur, Olbia and Ibiza see a huge seasonal uplift in private jet volumes between June and September.
Lifestyle changes will continue to drive this pattern. Many of our clients are now unable to escape from their working lives for long, combining work and shorter holidays instead. So an entrepreneur, looking to combine a working trip with a luxury family holiday. Or a business owner commuting in and out of their summer home at weekends, while the rest of the family stay all summer. VIP summer events such as the Cannes Film Festival and Monaco Grand Prix also drive increased seasonal demand.
Private aviation is also now more accessible to the luxury leisure traveller – and this will become even more apparent in 2014. New business models are make it easier and more cost-effective than ever for those travelling for weddings, honeymoons, group travel, or with pets, to compare prices and book private jets. Continued dissatisfaction with airline service levels will also continue to play a part here.
I predict we’ll see June 2014 experience the biggest month of charter demand since before the recession.
5) A new breed of private jet customer
This year we have started to see a definite difference in the profile of the private jet customer and this will become even more apparent in 2014 . It’s no longer a service used only by FTSE 100 board members or A-list celebrities (although these are definitely still in the mix). We are now seeing a greater blend of client profiles and business backgrounds.
There’s the increase in special occasion and leisure use mentioned above. And amongst business users, we now see more demand from younger entrepreneurs and business owners, from the technology, property and pharmaceutical industries – who come with a different set of expectations to the private jet customer of old.
The industry in 2014 must adapt to the new private jet user – while keeping its appeal with the old.
6) Weather disruption will drive demand from the airline customer
Experts might be divided on the cause of climate change. But whatever the reasons, the increase in unusual weather patterns can play havoc with airline service levels. Today’s airline industry is so tightly scheduled, that a small amount of disruption can have far-reaching effects – lasting days beyond the weather problems.
This year we have seen unexpected weather patterns with heavy snow in early Spring in both Europe and North America. The UK saw the coldest Easter on record, and France experienced exceptionally heavy snowfalls in March, suspending Eurostar and airline services.
Whenever airline services are disrupted, whether through snow, floods, fog (or strikes), private aviation sees an increase in demand. Private jets are more agile and can change flight patterns at short notice, and recover from disruption much more quickly.
7) Speed of response – 2014 will be the fastest year yet
A new speed record might have been set by the Citation X in 2013 – the fastest civilian aircraft in the world – but in 2014, speed of a different kind will be paramount.
A few years ago, when a client asked for a private jet charter price, they might have accepted that it would take hours – or longer – to get a response. In 2014 they will go elsewhere.
Online technology has now generated greater consumer expectations of responsiveness – across all industries. And when you are offering a premium service, response speed is an absolutely essential ingredient of commercial success.
Whether the customer is flying immediately (42 minutes from first enquiry to take off is our speed record) or months down the line, you have to respond quickly, relevantly and in the way the customer wants.
It’s a bit of an obsession here at PrivateFly. Our 24-hour flight team’s response speed targets are constantly being adjusted downwards. Records look set to be broken in 2014!
What do you predict for the industry in 2014? Share your views with us on Twitter, Facebook or Google+
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