Commercial airlines might be struggling, but small private jets are busier than ever, especially in Florida and other Sunbelt destinations.
The big picture: Untethered to their homes and offices during the pandemic, the wealthy are escaping to vacation homes and ski resorts — and paying handsomely to avoid commercial flights.
- The private COVID getaways helped offset a collapse in corporate flights over the past year.
- Now private jet companies are hoping those leisure travelers will be hooked on the convenience even after the pandemic subsides.
Why it matters: Layered on top of a resumption in corporate flights, the leisure boom could mean a big growth spurt ahead for the typically stable private aviation sector.
Driving the news: Investors see plenty of promise in private jet travel, otherwise known as business aviation, and experts predict more consolidation ahead for the fragmented industry. A few examples:
- Wheels Up, an on-demand service that matches fliers with available aircraft, is going public in a SPAC deal that values the company at $2 billion — more than twice its 2019 value.
- Vista Global, parent of subscription-based XO jet service, is acquiring Apollo Jets, a leading air charter provider.
- Aero Technologies, a "semi-private" luxury jet startup from Uber co-founder Garrett Camp, raised $20 million in Series A funding earlier this month. It's offering $1,250 one-way flights from Los Angeles to Aspen and plans to add more routes soon.
Between the lines: Small planes — four to seven passengers — are the busiest, with fourth quarter departures down only about 10% from pre-pandemic levels, according to David Wireman, head of Alix Partners' aviation practice. "That's people flying their families around."
- Flights on larger jets — the 10- or more seaters used by corporations — are down as much as 26%. Commercial airlines, by comparison, are still seeing passenger traffic 55% below pre-pandemic levels.
- "We went from being a bit of luxury to now being a utility," Sentient Jet CEO Andrew Collins tells Axios. His company sold $450 million worth of its pre-paid Jet Cards in 2020, 50% more than usual.
The intrigue: It hasn't yet translated into increased deliveries for plane manufacturers, but sales of preowned business jets soared 13% in 2020, notes independent aviation consultant Brian Foley.
What to watch: Innovations like the on-demand apps that have made booking a private flight almost as easy as hailing an Uber will continue, predicts Wireman.
Yes, but: The popularity could be short-lived for those whose wallets stretched in order to book private planes in 2020, counters Foley.
- "I feel that as soon as the airlines are perceived as safe again, a lot of those people will run back and look for their Economy Plus upgrade."