The aircraft charter market has changed drastically since the onset of the COVID pandemic in early 2020. While it was only three years ago, the aviation industry has seen market changes several times. Airlines and commercial flying reached a standstill as travel restrictions decreased demand for private jet charters and cargo flights. Aviation companies were forced to find solutions to stay afloat amidst volatile economic conditions and industry downturns triggered by the health crisis. Here we take a deep dive into exploring the ups and downs of the aircraft charter market over the last three years.
Overview of the aircraft charter market before COVID and the impact of the pandemic
Before the COVID-19 pandemic, the aircraft charter market was experiencing rapid growth and expansion. Private jet charters were becoming more popular and accessible, with various options for different budgets and needs. However, the immediate pandemic outbreak severely impacted the aviation industry as a whole, causing a significant decline in air travel demand. As a result, the aircraft charter market was also hit hard, with many operators having to cancel or reschedule flights. Despite these challenges and restrictions, the industry quickly adapted and implemented new safety measures to reassure travelers and restore confidence in private aviation. While all aviation industries took a hit from the initial impact of COVID, this downturn didn’t last long.
Increased demand for private air travel due to restrictions on commercial flights
As the pandemic continued to unfold, the world saw a significant increase in the demand for private air travel a few months after the initial onset of COVID. Demand for private jet charter services had initially decreased due to the pandemic. However, it gradually increased over the year, and by the beginning of 2021, the rates had returned to pre-pandemic levels. Argus International reports a 55% increase in activity within the United States in 2021 compared to the previous year, which was negatively impacted by the pandemic.
Argus also stated that the average hourly charter rate for a midsize jet was $6,900. However, 18 months later, in July 2022, the cost per hour for a midsize jet had increased by 35% to $9,300.
With restrictions on commercial flights and concerns about air travel’s safety and health risks, more and more individuals and businesses turned to private charters for their travel needs. While private air travel is not a new concept, its popularity surged in 2021 as people prioritized safety and flexibility in their travel plans. Whether for business or leisure, private air travel offered unparalleled convenience and peace of mind during uncertain times.
Where the market sits now
The aviation industry experienced a boom in demand in 2021 into 2022 as many people sought out less crowded means of travel. However, it seems that the momentum may be slowing down. Recent reports suggest that there may be an influx of newcomers now shifting back to commercial airlines as travel restrictions ease and confidence in air travel increases.
According to a private aviation market analyst, those who joined the private aviation industry during the COVID pandemic might be returning to commercial airlines. This is supported by data from Wing X, which indicates a 23% decrease in charter flights compared to the previous year and a 5% decrease in private charter activity compared to pre-pandemic levels.
Used-aircraft inventory has also doubled in the last six months, according to business organization AMSTAT, from what was an unusually hot pre-owned market a year ago driven by newcomers. Industry experts say the rate of charter newcomers who have returned to flying commercial could be as high as 90%. But rather than looking at this negatively, experts view this as the industry regaining balance after seeing massive shifts in the past few years.
What the future holds for this industry post-COVID-19
The COVID-19 pandemic has brought about significant changes in various industries that were forced to adapt quickly to changing policies. However, with the effects of the pandemic still lingering, it’s clear that the “post-COVID era” is yet to fully arrive.
According to fact MR, the air charter services market is expected to be worth $31.9 billion by the end of 2023; it is projected to rise with a CAGR of 5.4% to reach an evaluation of 54 billion by the end of 2033.
The last three years have been a challenge for many air charter companies who had to navigate an ever-changing environment while trying to maintain their operations and customer base. Yet, despite these difficulties, there remains strong demand for private air travel. This situation has made it difficult to predict the future of this market with absolute certainty. Nevertheless, while there are newcomers who may transition back to using commercial airlines as demand continues to decrease, overall, there still appears to be a healthy outlook for this sector post-Covid.
Armed with that knowledge, we at Charlie Bravo Aviation stay ahead of the trend by consistently keeping track of developments in this unique industry. If you want to stay up-to-date on all the latest news about the aircraft charter market, make sure you check out our market reports and sign up for our newsletter.
Sources:
https://robbreport.com/motors/aviation/private-jet-prices-climbing-1234630781/
https://www.fortunebusinessinsights.com/industry-reports/business-jet-market-101585
https://www.factmr.com/report/air-charter-services-market