January 16, 2012

Private Jet Predictions for 2012

Despite the continuing economic downturn, the next 12 months promises some exciting times for the private aviation industry.

Key factors in 2012 will include London’s Olympics, the global economy and advances in technology, all of which look set to have an impact on the private aviation industry as a whole.

Here are my predictions for the year ahead in private aviation:

1. London Olympics
Demand for private jet flights, helicopters and (most importantly) parking; will be very high. London’s regional airports such Oxford, Southend and Lydd will become medium stay parking for large numbers of private jets that inner London Airports cannot accept. Customers wanting a flight to or from London during the Olympics need to book early to guarantee availability. London Olympic Flights

2. RAF Northolt Airport
RAF Northolt will become London’s premier private airport. As the UK’s Ministry of Defence increasingly needs to generate cash from its assets, the current limitations of 10 private jet landings per day at Northolt will be increased. As RAF Northolt is within the M25 and a short drive from the centre of London, RAF Northolt could become the equivalent of Le Bourget in Paris.

3. Aviation Taxes
In 2012 there are two key aviation tax issues:
i) Regional taxes: The Italian government has started 2012 by announcing that non-Italian jets parked for more than 48 hours at Italian airports will be heavily taxed, which means that private jets will simply park in neighbouring countries.
ii) Air Passenger Duty: The UK government will work out how to collect Air Passenger Duty (APD) on private aviation flights. The current plan is to leverage Air Passenger Duty on the average passenger count (rather than actual number of passengers on each flight). However the government also needs to plan how to collect the tax from overseas operators for flight departures from the UK.

4. Pilot Shortages
Currently private aviation is facing a future of pilot shortages. Many factors are causing private jet charter pilot shortages including less ex-military pilots (due to the global reduction in military personnel); scheduled airline pilot demands and planning; and lack of training scheme and funding availability for private pilots.

Pilot training schools currently estimate that 96 percent of new pilots are interested in an airline career, compared to just 4% planning a career in business aviation. Whilst this has the potential to limit private aviation industry expansion, in 2012 industry bodies such as EBAA and BACA will be looking for solutions. Private Jet Pilot Shortages

5. Speed of Response
In the current competitive market, with aircraft operators competing for every flight, a vital customer requirement is how fast the flight quote is returned. Obviously price is a crucial factor in private jet charter Along with increased price transparency, customers now expect increased responsiveness at every stage of the process – both through instant online pricing or by 24-hour telephone.

6. Private Aviation Goes Mobile
Increasingly customers and flight crew expect to be able to request, book and manage private jet charter from their mobile or tablet device. Despite doubts about the value of “apps” for high value transactions we see the private aviation industry as a whole concentrating on developing mobile and tablet apps to for post-booking management. Expect to be able to view and change flight details on your way to the airport soon.

7. Experimental Business Models
In 2011 the private aviation industry saw the development of “social jet-sharing” and new empty sector business models. In 2012 we expect entrepreneurs in private aviation to come up with different private jet models to produce solutions to the traditional issues of industry inefficiency and the perceived high costs of private jet charter. We’ll also see how successfully the new business models address the issue of maintaining customer flexibility and privacy whilst satisfying multiple customer flights.

8. Aircraft Trends
Look out for military technology in corporate jet designs. Embraer’s Legacy 500 (possibly coming to the market at around $18m) uses “fly by wire” flight controls in a medium sized corporate jet. Meanwhile the new Gulfstream G650 promises to be an exciting option for the private jet set.

9. The Rise of Private Jet Charter
Again due to difficult global economic conditions, we expect to see private jet users increasingly move away from cash upfront card, fractional and ownership options towards ad hoc jet charter. As the charter industry matures and offers clear price transparency and reliable VIP service, charter becomes a viable option for those trading down from aircraft owning or factional and card schemes.

10. Emerging markets
Private jet manufacturers are seeing strong demand from the Asian market. The trend in Europe is generally for unbranded aircraft, whereas in Asia expect to see corporate and individual names emblazoned on the side of aircraft.

So in summary I expect to see some highs and lows, but the Olympics promises a fantastic opportunity to showcase the industry.

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