Demand for private jet travel has declined, and that’s not a bad thing: weekly travel

Demand for private jet flights in North America is declining, but industry insiders say it’s a healthy correction from unsustainable growth.

In April, there were 7.7% fewer private jet flights in North America than a year earlier, said Travis Kuhn, senior vice president of market data for private aviation data tracker Argus.

Travis Kuhn

Still, flight activity last month was up 10.3% on an industry-wide basis compared to 2019. And some stakeholders see a correction in demand that has plagued the industry with shortages of aircraft, parts and pilots, especially when activity peaked last summer. .

“We’re glad that our view with most people is that demand is not that strong,” said Doug Golan, publisher of the Glee Jet card comparison newsletter. “Nobody seems to be worried about the decline. Many think it’s getting back to where they can handle demand better.”

Kuhn offered a similar analysis.

“Nowadays nobody is complaining. “The industry is still very healthy. It’s a little less than growth.”

Argus has not yet released data for specific industry segments for April, but in the first three months of the year, the largest decline in private jet activity was in the charter market. In March, charter flight activity fell 12 percent year over year, while owner-operated activity declined 4.3 percent.

Fractional-ownership jet activity, which includes operations by companies such as NetJets and Flexjet, bucked the trend in the first three months of this year, Kuhn said, and was up 6.4% year over year in March.

What is behind the decline of private jet travel?

Industry experts give different explanations for the overall decline.

One is cost. According to the Private Jet Card comparison, hourly fixed rates for members of registered Jet Card programs increased by 39.8% between December 2022 and December 2020, due to the CARES Act provision that temporarily eliminated the federal 7.5% excise tax on private flights. Prices have increased by 21% from 2021, across all aircraft classes, including fuel and taxes, to an average price of 11,748 per hour.

Kevin Singh

Kevin Singh, CEO of Dallas-based Icarus Jets, which includes charters among its range of private aviation offerings, said the price of a seven- to eight-seat Cessna Citation V light jet has doubled since before the pandemic. Their customers are attracted now.

“There’s no way people are going to pay $40,000 one way for a cab,” Singh said. “We priced a customer out of the market.”
Declining demand has brought price relief recently. From the end of 2022 to the end of March, hourly wages for JetCard programs fell 5.2%, PrivateJetCardComparison found.

The second reason for the decline in activity is economic instability and related belt-tightening.

“What I’m hearing is that people who go to Florida every weekend or to a ski resort are now staying longer,” Golan said. “People make six trips instead of 10 and stay longer because they don’t have to go back to the office on Monday.”

Another possible reason is the gradual build-up of commercial airline schedules to 2019 levels.

A sudden drop in charter flights from late 2020 to early 2022 is linked to a lack of commercial flight options, said Dan Hubbard, director of communications for the National Business Aviation Association.

“Not a bit of what we heard, you wanted to go somewhere and the airlines weren’t going at that time,” he said.

Still, even with the decline in private flights, which Kuhn says began taking hold last July, activity remains well ahead of 2019. In the first four months of the year, the number of North American flights was up 12.6 percent compared to the same period in 2019.

That fact speaks to the fourth reason for the current decline, which is that a market correction was inevitable. Private flights are up 25 percent between November 2019 and November 2021, Kuhn said.

“There’s no way it’s going to be sustainable,” he added.

Meanwhile, Argus expects North American private flying to remain steady over the summer year-over-year.

But not everyone is optimistic about the decline. In particular, Singh expects charter demand contracts to continue if commercial airlines solve their operational problems.

“It’s slowly going back to where it was four to five years ago,” he said. “In two years we will see jet charters to 2018 and 2019 levels.”