COVID-19 Boosts Private Aviation

Having spread like a wildfire, the Coronavirus (COVID-19), has literally cast its shadow over the world. Among the many other impacts, the virus has severely affected the aviation industry all around the world. As the virus continues to spread, leading to serious lockdowns in many parts of the world, the economies of many countries and industries are at stake. The aviation industry along with many others, is likely to be hit most adversely. Airlines all over the world began by starting to announce flight reductions and suspensions as the fear surrounding COVID-19 spiked and travel restrictions across nations increased. Now with complete lockdowns in countries like India, United States, UK and others, commercial aviation is almost at a complete halt.

Owing to the isolation requirements and social-distancing needs in this situation, travel ban being imposed by countries and suspension of usual services are all causing a near shutdown of the international travel industry. Commercial aviation is coming out to be among the hardest hit industry due to this virus. This industry already operates on narrow profit margins and depends on a stable stream of passengers.

Many global experts predict that the air-travel business is likely to recover in the long-term; but the current year is expected to see a marked downturn. At the time of the 2003 outbreak of the SARS virus in China, air traffic in Asia-Pacific witnessed a drastic reduction for about three months; but bounced back within six months.

During Wings India 2020, a global exhibition and conference on civil aviation, held in Hyderabad from March 12 to 15, 2020, Boeing’s Managing Director for Marketing, Darren Hulst, spoke about how this pandemic had curtailed air traffic especially in Asia at that time and highlighted the dramatic slowdown in passenger air traffic.

However, looking at the current scenario, the International Air Transport Association (IATA) fears that this time, the recovery may not come for six months after the crisis.

COVID-19 could have a $130 billion impact on the industry, IATA estimated. Later, IATA updated its analysis of the financial impact of the novel COVID-19 public health emergency on the global air transport industry and stated that it now sees 2020 global revenue losses for the passenger business of between $63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of March 02) and $113 billion (in a scenario with a broader spreading of COVID-19). IATA’s previous analysis issued on February 20, 2020, put lost revenues at $29.3 billion based on a scenario that would see the impact of COVID- 19 largely confined to markets associated with China. Since that time, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China. Financial markets have reacted strongly. Airline share prices have fallen nearly 25 per cent since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003. To a large extent, this fall in prices is a shock to industry much greater than the earlier analysis.

OWING TO THE ISOLATION REQUIREMENTS AND SOCIAL-DISTANCING NEED IN THIS SITUATION, THE TRAVEL BANS BEING IMPOSED BY COUNTRIES, THE SUSPENSIONS OF USUAL SERVICES ARE ALL CAUSING A NEAR SHUTDOWN OF THE INTERNATIONAL TRAVEL INDUSTRY. COMMERCIAL AVIATION IS COMING OUT TO BE AMONG THE HARDEST HIT INDUSTRY DUE TO THIS VIRUS.

In their most recent impact assessment report, IATA stated that the brunt has moved beyond their ‘Extensive Spread’ scenario implying $113 billion loss of passenger revenues (19 per cent) worldwide in 2020.

IATA also said that before we can hope for any recovery, the immediate effect would be drastic.

We are definitely witnessing extraordinary times and governments are forced to take unprecedented measures. Even corporate travel is being cut down and instructions have been sent out to travel only when absolutely necessary and not otherwise.

However, the private aviation market did not see a downfall that is as severe. It rather witnessed a surge in demand for flights by business jets. The hike was as much as double for some of the operators.

Many well-off travelers who hoped to minimise their public exposure and find alternatives to suspended flights, opted to fly privately at least before complete lockdowns.

Also, with those essentially travelling to or from areas of travel restrictions and flight suspensions, private jets were the way out. This led to the spike in urgent demands pouring in with the private jet operators.

Several companies that were looking to pull their employees out of the infected regions, also shifted to flying private.

In a media report, Alain Leboursier, Director of Sales at Swiss private jet broker Luna Jets, highlighted “impressive increase” in bookings and enquiries from passengers, correlating with heightened concerns surrounding COVID-19. In February this year, about 15 per cent of overall requests were related to coronavirus, Leboursier says and this doubled to 30 per cent in mid-March.

Some of the reasons that particularly heightened the demand for private jets as the virus spread included:

• The major cashing point for the private jet users was literally the ‘privacy’ that these aircraft could offer in times like these. Flying in a private jet allowed the passenger to avoid worrying about coming in close proximity to others.
• In addition, most of these flights operate out of small, private aviation terminals, not mass transport hubs. Hence, it also saves the passenger from contact others during security checks and boarding.
• The contact is reduced to mostly being by yourself once the aircraft is boarded. The passenger only has to contact the security agents and the crew and possibly few airport personnel.
• Even if one is not flying alone in a jet the passenger is aware of the whereabouts of others on board which certainly makes it more secure and safe to travel.
• The use of private jets has also been made for transportation of surgical masks, protective overalls and medical gloves to healthcare staff in affected cities.
• Also, the availability of private jets operators is certainly limited compared to the large number of commercial airline operators.

Thus coping with the increasing demand for private jets has become a challenge for the operators of private jets. Some of the demands that the private jet operators received included, decontamination team looking for transportation, families traveling to foreign countries, organisations intending to fly to distant location for work, last-minute travel requirements, evacuation requests etc. The aim is to avoid exposure to other people on a commercial flight and limit interaction with other travelers at the airport.

“Over the past month we have flown many clients between a variety of global destinations. Most have been requests to fly as soon as possible within one to five days and the majority are people flying home to their families or looking to repatriate loved ones,” Private-Fly, a global private jet charter company, highlighted on its website.

“Demand is now reducing and fulfilling requests more challenging, both in terms of border and passenger restrictions and in securing aircraft. But we are doing everything we can to keep passengers moving back home or wherever they need to reach – especially with few airline routes now operating. Being more agile and reactive than airlines, our industry is able to operate last minute flights within what is operationally possible and to react immediately when restrictions are lifted again,” PrivateFly further stated.

While global recession is expected due to COVID-19, demand from business clients is also expected to see a downfall eventually. However, the private jet companies are hoping that they might be able to convert some new passengers into their regular clients, making them see the benefits of flying private.

The risk of infection has overpowered the extra cost which people usually think about while opting for flying private. Saving lives took a front seat in comparison to saving money with the entire coronavirus social distancing issue. For those who can afford, private aviation has become the best way to keep the risk of infection at bay.

However, in the current scenario, as the coronavirus spread continues, the fear around it is rising too. In attempting to curb the virus and handle the spread, complete lockdowns are being imposed by certain governments across the world and travel anywhere outside one’s abode is almost coming to an end especially among the population that uses private or commercial aircraft to travel. The situation remains uncertain, and whether the future will continue to hit commercial aviation and boost business aviation or will the entire aviation industry take the economic dip, as seems more likely, will only unfurl in the times to come.