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Predictions for the Private Aviation Market in 2013

Air Partner has a Royal Warrant from HM Queen Elizabeth II, works with six of the G8 group of governments, multinational corporations and many high net worth individuals around the world.  The aviation firm is listed on the stock market, and is well placed to provide an accurate picture of top end aviation trends.

In July 2012, Air Partner commented that green shoots were starting to emerge within the private aviation sector.  David Macdonald, Director of Private Jet Sales at Air Partner, shares some thoughts on the private aviation sector as we enter 2013.

“We are starting to see a slow but steady recovery in the private aviation market; Air Partner’s Private Jets division saw an 8% growth in revenue for the financial year ending 31 July 2012, and a 9% increase in JetCard sales boosted membership to its highest ever level.  We expect the private aviation market to continue growing in 2013, particularly amongst corporate users where we have seen significantly renewed levels of interest.  This is reiterated by a recent JP Morgan research paper, which anticipates an 8% growth in business jet delivery for 2013 – an increase of 7% on their 2012 figure.  As business jet deliveries increase, so too will the number of individuals and corporations choosing charter or card solutions as an alternative to less flexible private aviation options.”

“Despite the improved conditions in the private aviation sector, we anticipate seeing more foreclosures of asset-heavy aircraft operations within the private aviation sector.  Aviation suppliers carrying debt continue to struggle and some major players have gone out of business in the last few months alone.  It seems that no one in our industry is too big to fail.  However, business models that remain free of both debt and depreciating aircraft assets, and have long term track records of financial stability, will continue to be attractive to business jet users.”

“In our July predictions, we questioned the role of fractional aircraft ownership, as people continue to be disillusioned with the lack of flexibility, onerous fixed term contracts, and the high costs involved with the ownership of a depreciating aircraft asset.  We anticipate this trend continuing into 2013 as value and flexibility remain key drivers.” 

 “The re-emergence of corporate users that we saw in 2012 is likely to be a continuing trend for 2013.  Pre 2008, large corporations using private aviation might have purchased jets, rather than charter.  However, a sense of “once bitten twice shy” is apparent and large corporations which previously purchased a long term fractional share or whole aircraft are buying blocks of jet time instead, to limit their exposure to future market dynamics and ensure a better return on investment.”  

“The BRIC territories have seen considerable growth in aircraft ownership of late.  The big question for 2013 is whether charter use in these countries will rise to feed into the new fleets of aircraft.  This is particularly relevant in India and China, where aircraft deliveries have boomed but charter use remains relatively flat in comparison to fleet size.  In Russia, the boom in charter came first, followed by aircraft ownership, and consequently, the Russian charter market remains extremely buoyant.  Charter use has grown in China and we think it will continue to do so.  However, when this boom will arrive remains to be seen – is this just a time lag as users become used to the concept, or is there a fundamental geographic or cultural difference that is suppressing the mass use of aircraft charter in/from China at this time?  2013 may be the year we find out.”

“The smaller ‘broker’ market is an area that will continue to change in 2013.  A prolific number of opportunistic ‘bedroom brokers’ with little experience in the charter market have emerged over the last few years.  Using the internet as an online shop window, traders are able to use highly stylised websites to create a false impression of size and capability.  No doubt these traders and their websites will continue to pop up; but as basic aircraft charter has few barriers to entry, it is crucial that clients use a trusted broker with sufficient human and financial resources, an established trading history, and a long term client ethos that will provide guarantees for exceptional circumstances.  We are keen to highlight that using an experienced broker is more important in 2013 than ever before.”

“Online comparison websites are a modern boon and are often mooted as the next big thing in private aviation; 2013 will no doubt bring more speculative new start ups.  Empty leg websites, seat sales websites and online booking websites will continue to appear and attract publicity.  Modern information technology continues to be a useful tool in allowing users to find a supplier but the human element continues to be what business jet users ultimately demand.  In aircraft charter, the best brokers provide price comparison benefits to their clients daily.  Private Aviation, and charter broking within it, is an industry founded on trust between client and supplier.  The internet will continue to be a valuable tool and shop window for all, but not a mass booking medium, as ultimately most clients in this industry want a trusted human supplier to look after their arrangements, and we see no signs of this changing in the foreseeable future.”

“However, as we enter 2013, jet users are focusing on obtaining the best value for money combined with high levels of service. Private and corporate jet users continue to work within tight budgets and look to get even more for their money without compromise.  In order to excel in this market, brokers need to embrace innovation in products and services, maintain high levels of personal service, be creative in finding the best solution for the client, and provide financial stability in a sometimes fragile supplier market.” 

David and the rest of the Air Partner Private Jet team are available for media interview or background discussions.  They can be reached on T. +44 777 625 3482.
21 December 2012
Notes to Editors:
David Macdonald, Director of Sales - Private Jets                     
David joined Air Partner in 1995 and is now Director of Sales, Private Jets, with responsibility for the retention and growth of existing and new private jet markets.  He was instrumental in the launch of Air Partner’s JetCard product in 2005, the establishment of Air Partner’s presence in Russia in 2008 and securing Air Partner’s strategic alliance with CitationAir by Cessna, an industry-leading private jet transportation solutions company based in the US, in 2010. David has 25 years of varied experience in private jet sales, management, operations and broking.

About Air Partner
Air Partner has been trading for 51 years and is a world leading provider of aviation charter services to industry, commerce, governments and individuals worldwide.  The Group is globally recognised as a leading charter broker and organises ad hoc aircraft charters of every type for any reason.  Its three main divisions comprise Air Partner Freight, Air Partner Commercial Jets and Air Partner Private Jets.  The Commercial Jets division charters large airliners to move groups of any size. Private Jets offers the company’s pre-paid JetCard scheme and on-demand charter.  With its headquarters alongside Gatwick airport in the UK, Air Partner operates 24/7 year-round and employs 225 aviation professionals across its 20 offices spanning Europe, North America, the Far East and Middle East.  Air Partner is the only company in the aviation industry to hold a Royal Warrant, a globally recognised mark of excellence.



Temple Bar Advisory T. 020 7002 1080
Joanna Crawford M. 0777 625 3482
Tom Allison M. 0778 999 8020

21 December 2012

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