Ultra-wealthy turn to private jets to avoid virus risk - but for how long?
Spike in business jet travel in February easing amid global business events cancellations, tighter travel restrictions and increasingly cautious sentiment, operators say
A surge in private jet travel is starting to wane in some regions as stricter travel restrictions and postponed business events due to the coronavirus pandemic ground globe-trotting wealthy executives.
Private jet operators say there was a dramatic spike in demand for the service in January and February as well-heeled travelers sought to evacuate from high-risk zones or avoid crowded airports to minimise exposure to the virus.
Some rich individuals are also opting to fly their home staff and nannies privately to avoid infection while others are visiting countries where they own properties or run companies ...
Ameerh Naran, Vimana Private Jets
However, as governments impose tighter travel restrictions, organisers cancel business and leisure events and flight crews voice safety fears, some clients are beginning to scrap bookings, operators say.
“The current situation presents both opportunities and challenges: more people are considering flying privately to avoid risk of exposure to the virus. However, at the same time, some customers are postponing or amending their original itineraries due to the latest travel restrictions,” says Adel Mardini, founder and chief executive of Jetex in Dubai.
The Covid-19 outbreak, classified as a pandemic by the World Health Organisation, has hit the global airline industry hard, leading to drastic cuts in commercial flight routes and a plunge in bookings. A total of 506,662 flights have been cancelled from January 1 to March 10 to, from and within China, and about 48 per cent of international flights scrapped, according to travel industry data provider Cirium.
In Italy, the worst-affected European country, a total of 7,495 flights were cancelled within 12 days of an earlier announcement of reduced routes on February 28.
Such cuts have left stranded passengers to rely on government-led evacuations. But for those who can afford it, there are private jet charters that can fly out small groups ahead of impending travel bans and change in government policies in an increasingly unpredictable situation, say operators.
Companies in the US, Europe and Middle East say there is a jump of up to 30 per cent in demand for chartered flights in recent weeks, many for urgent departures within 24 hours.
“We’ve never been this busy, I’ve never seen so much activity in our evacuation flight department,” says Justin Crabbe, chief executive of Jettly. “The coronavirus has dramatically increased activity in the private sector that we are tripling our flight support staff to accommodate the influx.”
Passengers on private jets include ultra-high-net-worth people, decontamination teams or high-profile doctors, lawyers, board-level executives, large corporations, athletes, filming crews and government officials, according to operators.
“Some rich individuals are also opting to fly their home staff and nannies privately to avoid infection while others are visiting countries where they own properties or run companies and some leisure travellers want to reach destinations where commercial flights are limited,” says Ameerh Naran, chief executive of Vimana Private Jets.
Some clients, who previously flew commercial airlines, are also switching to private travel to minimise their exposure, says Richard Lewis, group vice president of Insignia Group.
Overall, requests are mostly for flights from China and Hong Kong, Macau, Japan, South Korea, Milan and the west coast of the US. Operators are also expecting demand for evacuation from more cities as the virus spreads.
Some clients are even willing to pay upto three times the regular rate when there is a shortage of crew or aircraft in the area, Mr Crabbe said.
Prices for chartered travel depend on flying hours and the type of aircraft: a light jet seating six to eight passengers can cost $5,000 (Dh18,350) per flying hour while a wide-body jet can cost $26,000 per flying hour.
Jet fuel prices have dropped more than 42 per cent year-to-date, which would typically provide respite to the aviation industry as fuel comprises about a quarter of operational costs.
But some jet operators say it has not helped business as demand rose and there is a shortage of crew in some places. Some say they have passed on the lower prices to clients to stay competitive whereas few who hedged for fuel say they cannot immediately benefit. While the number of inquiries into chartered flights soared in the past few weeks, an increase ranging from 40 per cent to 300 per cent, not all will translate into business.
Governments imposing travel bans and quarantines on visitors from certain countries to contain the spread of the virus is deterring travel, says Ali Al Naqbi, chairman of the Middle East Business Aviation Association. Its members saw a 12 per cent increase in the number of private flights in January year-on-year that flattened in February and March.
“Governments are taking it seriously so people are taking this seriously and they are delaying their travels now,” he said.
Concerns about the economic impact of the outbreak and ensuing stock market volatility is taking a toll on businesses, so wealthy people are more cautious about leisure or non-essential travel expenses, analysts say.
“The Covid-19 is affecting the global economy, so wealthy people are hesitant to go on vacation to a place where they are going to spend a lot of money especially when they stand to lose millions of dollars in their businesses,” says Laila Hareb, president of aviation consultancy Alive Group. “They will avoid exposure to environments or people who may carry the virus.”
The disruption from the coronavirus and ensuing volatility of oil prices has wiped about $10 trillion from stock markets globally over the past two weeks.
Steven Orfali, founder of Jetset Group, said if the stock market continues to be hammered for the rest of the year, “we could be looking at a repeat of 2009 [financial crisis], which hindered demand quiet a bit".
Cancelled events and companies urging staff to work remotely will also dent business travel.
“If the trend continues long term, more people will adapt to working remotely and adjust to traveling less including the wealthy. If more and more destinations become red zones where are people going to go?” says Richard Zaher, founder and chief executive of Paramount Business Jets.
The industry is also juggling mounting logistical challenges as travel requirements become more complex across regions: deep cleaning of aircraft, submitting passengers’ travel history in advance to authorities, sudden bans on private jet landings at some airports, and providing on-board medics on request.
In the VIP terminal at the Mohammed Bin Rashid Aerospace Hub in Dubai, travellers are given exclusive and private health screenings at the location of the aircraft by a Dubai Health Authority team to avoid mass queues at the airport, says Tariq Bin Ghalaita, director of business development at the hub.
Jet operators are divided on how long business will stay strong in the wake of the coronavirus outbreak, but agree it is difficult to make predictions given the highly fluid situation.
“It will depend mainly on the development of the virus in the upcoming weeks in Europe and the travel restrictions imposed to customers,” says a spokeswoman for private jet company GlobeAir.
Others are hoping that the booking cancellations will be offset by the rise in demand.
“We understand due to usual circumstances we are seeing a temporary increase in requests but we are also seeing an increase in flight cancellations,” Mr Zaher said. “We are hoping for a zero-sum game if not better. And that would be a blessing considering many in the travel industry are suffering greatly.”
With Assistance From Claire Corkery in London
Updated: March 14, 2020 02:42 PM