Wealth Boom Backing the Private Jet Industry!
he aviation industry, when taken as a whole, is going through its most unprecedented time as hardly hit by the pandemic. Global passenger traffic declined by almost 60% in 2020 compared to the pre-COVID levels. As per the industry experts predicting a resurgence, figures will reach pre-COVID levels by 2024 for most regions, while two extra years will be added for African and Middle-Eastern regions.
While we are expecting a gradual growth in commercial aviation over time, the private jet industry is receiving a breath of fresh air from the lucrative echelon of the world. Private travel is about to skyrocket and achieve greater heights in the coming years.
Private jet manufactures are experiencing an increment of demand while second-hand dealers tend to receive more calls than ever before.
Co-founder of MySky, Christopher Marich confirmed the demand, "The market is in a position where it has never been before, for every aircraft out there, there are two or three buyers for popular models.”
Flying private is safer, more fun, and convenient than taking a commercial flight, but the high cost incurred with private flying kept many people away and stuck to commercial aviation. With the outbreak of COVID-19, private flying became more prominent and created more momentum with the business jet industry. Having said that, industry experts have commented, it is not the pandemic that nudged private flying to a higher tier, but the wealth boom!
Elite Customers Joining The Industry.
Initial Public Offerings (IPO) accumulated billions of dollars just in months and extended the list of billionaires. By July 2021, United States IPO values reached a staggering amount of $171 billion surpassing the 2020 figures with almost six months on the board.
Eddie Molloy, co-head of equity capital markets added, "If the markets hang in anywhere near where they are right now, we are going to be incredibly busy this summer, and into the fall with IPOs."
Traditional listing companies and Special Purpose Acquisition Companies (SPAC) joined the race of going public and making a great deal of money. With all these IPOs, the rich become richer, weighing their bank accounts with some extra cash, which could be used for buying private property: business jets, yachts, and luxurious mansions.
Additionally to the IPOs, tax incentives and company mergers are the next contributing factors for the wealth boom.
This is how the elite echelon got a boost of money amidst the pandemic.
Pandemic has been the catalyst drawing the attention of the high-end customers into the industry. They wanted to travel safer, maintain social distance, and take a flight to any destination without many ordeals.
In 2022, it is expected to have a 10% increment in business jet sales compared to 2021, and the demand keeps ramping up by 3% annually till 2031.
As reported by the aircraft manufacturers, this is the era with an inventory of lower-than-normal that will thrive the demand for newly-built business jets all over the globe. None of the operators are willing to cancel their orders for new birds and 29% of the ordered business jets will be delivered within the next two years to the operators.
A Tool For Improving Productivity.
Most fortune companies brought their business jets with the intention of boosting the productivity of the company’s top management. Managers require immediate travel to various regions of the world for meeting clients and various business endeavors. A business jet that could land very close to the destination cut the waiting time to a greater extent.
"People are looking for ways to become more productive, more certain in the missions that they have to perform” Embraer Chief Commercial Officer, Stephen Friedrich explained in an interview.
Cabin Altitude Correlates with Comfort.
Cabin altitude is the pressure inside the cabin of an aircraft expressed in terms of altitude above mean sea level. When the count goes high, the pressure within the cabin goes down. Normally, people can stay up to a cabin altitude of 8,000 ft and most commercial airliners tend to maintain their cabin altitude between 7,000 ft and 8.000 ft.
It is quite obvious that higher cabin altitude reduces the pressure within the cabin, hence the Oxygen concentration. Studies have found higher cabin altitudes can reduce blood concentration within the bloodstreams from 5% to 20%. Symptoms of low Oxygen concentration within bloodstreams can lead to headaches and could develop to higher levels of Hypoxia depending on the passenger’s medical condition.
Business jets with relatively smaller cabins can attain a higher cabin pressure value: a lower cabin altitude. Dassault’s Falcon 6X, a private jet entering into service by 2022, maintains its cabin altitude to 3,900 ft during the 41,000 ft cruise. Travelers are less fatigued and drained under a well-watched cabin allowing them to make few stops in different cities on the same day.
What’s Challenging the Boom?
Sustainability issues are the biggest concerns for any industry in the world, the private jet industry is no exemption! The carbon footprint of aviation was a matter of concern for many environmental activists over the past decades as aviation kept increasing its share with the increased movements all around the globe.
Transport & Environment, a campaign group in Brussels, conducted research and claims that Greenhouse gas emissions from private jets are rising well above the commercial aviation figures. Low occupancy per flight in private jets escalates the emissions per one passenger-kilometer.
As stated by the Department for Business, Energy and Industrial Strategy (BEIS), every liter of aviation turbine fuel produces 2.52 kg of carbon dioxide, when summed up for a whole journey, tons of carbon dioxide are emitted into the atmosphere.
Many business jet operators have already set out their goals for net-zero carbon emission in the foreseeable future. Moving into Sustainable Aviation Fuels (SAF) is a proven remedy for the increasing carbon footprint. SAF cut the emissions by almost 80%, which is a significant improvement. SAF manufacturers like SkyNRG claim that sustainable fuels improve fuel efficiency while reducing emissions, laying the beloved atmosphere into safe hands.