Sustainability in the Pandemic and Future Growth

This past year 2020 has been a significant challenge for General Aviation industry. The Business Aviation sector usually benefits from times of disruption because business travellers turn to private charters to fill the gaps left by restrictions on commercial aviation. But this time the Industry has been severely affected because countries have completely locked down international travel. Overall global business, year-on-year is down around 70 per cent.

As a result, many small companies have shut down operations. Those who ran a lean operation with low fixed overheads to revenue, and companies that were able to adjust business plans to alternative verticals, have managed to adjust their business model and survive. And while it is hard to predict the decisions of governments in different countries, we now have a better understanding of the risks associated with this virus, and given the widespread and deep economic hardship caused by the lockdown it does appear that countries are beginning to open up.

November and December have seen large increases in charter traffic as demand grows for holiday travelling to exotic resort locations. In South Central Asia, places like Maldives, Seychelles, Goa etc. have benefited from a rapid increase in charter flights. It is our belief that as global companies ratchet up production to meet a rapidly increasing demand for goods and services, business aviation will expand rapidly and could potentially have its best year in 2021.

I also feel that with the need for physical distancing new flyers will enter the private aviation market. Corporate executives are more likely to shun commercial aviation and crowded airports for the safety of private aviation. This has the potential to significantly expand the overall market size.

Service companies related to Business Aviation will have to adjust their business models to meet the increased needs for safety and the increased uncertainty in their revenue models. New and sudden lockdowns should be anticipated and therefore there is need for service companies to manage their fixed expenses related to workforce. Also, contingency plans must be put in place to allow employees to work from home on tasks that do not involve direct customer dealing. Companies will also have to brain storm new vertical lines of revenue and diversify their business offerings. The ones that are able to best do that will survive.