8 Business Aviation predictions for 2019
It’s been a busy year at PrivateFly. We flew more people, to more places, than ever before. And it was a year when we celebrated our 10th birthday, followed by our acquisition by Directional Aviation in September.
Now part of one of the world’s largest aviation groups – with our new sister companies including established industry brands Sentient Jet and Flexjet – we’re looking forward to a truly exciting 2019, bringing even more innovation, value and efficiency to our customers, suppliers and partners.
In the industry overall, the year ahead looks challenging in many ways, but there are also lots of positive opportunities to look forward to. Here are some of the key developments we’re looking out for.
1) Make or break for shared charter programs
For the past few years we’ve seen lots of noise and investment around seat sharing in private jets, but no-one has been able to prove the viability of the business model. 2019 will be make or break time in my opinion: Investors will not be able to keep pouring money in if these companies continue to make losses, and I can’t see startups entering this market for another decade.
2) Spotlight on environmental innovation
Consumers and businesses are prioritising green initiatives more than ever before, with our industry following this trend. In 2019 larger charter operators will start to be monitored under the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) program that also applies to commercial airlines.
Electric aircraft are the ultimate (and very exciting) aim here – and in 2019 I think we’ll see more investment in the leading concepts, which are gaining real traction. The focus and challenge now is on regulation and infrastructure. These aircraft can already fly, now they need to prove they can keep paying customers safe.
I don’t think we’ll quite see market entry in 2019, but there will be major moves forward in the certification process, probably in a more agile market such as Dubai or New Zealand.
3) Industry consolidation ramping up
We’ve seen an increasing trend towards consolidation of businesses within our industry over the past few years – from manufacturers; through to aircraft operators; FBO chains; and industry suppliers. In 2018 PrivateFly was one of the bigger stories, given our acquisition by Directional Aviation. The opportunities created by our bigger size, and our wider group will allow us to offer more innovation and value to our customers in 2019.
And we’re not alone – I think we’ll see further M&A activity in the on-demand charter segment next year. It’s still very fragmented and both the customer and the industry would benefit from this being less so.
4) Regulation impact – including Brexit & ADS-B
This year will be challenging as the industry grapples with a number of global regulation changes. In the US, the clock is ticking loudly for the incoming ADS-B requirement set by the Federal Aviation Authority (FAA). Older aircraft must undergo an expensive upgrade to their tracking systems to comply from January 2020 (Europe follows suit in June 2020) which will impact the pre-owned market, and potentially increase charter costs on aircraft 10+ years old. Some are hoping the FAA may extend the deadline, but that remains to be seen.
In Europe, Brexit will have a major impact – although exactly how is still unclear. The prospect of the UK entering into bilateral agreements aith the EU is a huge migraine for the industry. Private jet operators need to be able to optimise their flight plans within Europe to make sense commercially, so limitations on inter-European flights will mean more complexity, less choice and – ultimately – customers paying more. Let’s hope a practical solution can still be reached.
5) More extreme weather-related demand
Over the past few years we’ve seen major spikes in on-demand charter activity related to extreme weather events. From forest fires, to flooding, to hurricanes and heavy snowfall, private aviation can fly in quickly, when and where required. That can be to evacuate local people; bring in supplies and crew; or to transport media crews and officials in or out of the area. With these events getting more frequent, we’re expecting more of this type of demand in 2019.
6) A tipping point for digital communication
While our industry is so customer-oriented, there’s still a surprising number of companies stuck in old communication ways. In 2019, I think we’ll see a tipping point when it comes to clients expecting instant, two-way communication – on their own terms. Offering a truly multi-channel service, that includes social media, chat platforms, and instant messaging – as well as 24-hour phone support – will become a key sales differentiator.
Companies not stepping up to this will struggle to compete – not just because it makes customers happier, but because it makes business faster and more efficient. This is also true in the supply chain – where everyone benefits from a faster and more efficient information exchange.
7) The Praetor 600 & Citation Longitude will stir up the super-midsize segment
The super-midsize segment will be one to watch next year, as Embraer’s Praetor 600 enters the market at more or less the same time as Textron’s Citation Longitude. This represents both manufacturers first forays into this key market segment, performing transatlantic and cross-continental flights.
Both will be vying to dethrone the popular Bombardier Challenger 350, which was the most-delivered aircraft of 2017.
8) More ultra long range (nonstop) demand
Following the trend seen in the airline segment, at the top of the market I think we’ll see even more long range clients looking to fly further, and nonstop in 2019 – choosing higher-priced non-stop flights over less expensive, fuel–stop flights – for the faster overall journey time and uninterrupted sleep.
At the pinnacle there’s the Global 7500 which will start deliveries right at the end of December 2018, entering service in 2019 capable of flying further than the current ‘fastest and furthest’ G650ER.
Stay tuned to PrivateFly’s weekly newsletter for more industry news and views throughout 2019.
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