Private aviation is going through an enormous imbalance of supply and demand. Lots of people want to fly privately, but there just aren’t enough aircraft. Adding to this are various supply chain problems, service issues, staffing shortages and the net result is prices are going up and some service levels are impacted.
We’ve heard from a few private aviation customers who have faced issues on recent flights. Their planes were delayed, support services were not as requested, and so some people have been looking for alternative operators. But these are industry wide issues, and from what we’ve heard all the providers are affected to some degree.
Supply Chain Issues
The increased demand for private aircraft has been well documented, but issues throughout the supply chain are affecting the supply and availability of aircraft.
Over the last few weeks as we have talked to executives at private aviation companies, they have shared all sorts of anecdotal stories of the issues they are facing.
For instance, one executive shared that for a while there was a shortage of tires for Embraer Phenoms. Another mentioned that their aircraft needed a Honeywell part which they would normally have in inventory, but even Honeywell didn’t have it in stock.
When the parts aren’t available it means the planes can’t fly. In both these cases the planes were grounded for longer than normal, which adds to pressure on a market which is short of aircraft.
While a lot of the discussion on flying privately focuses on the planes, there’s a whole array of supporting services that make a flight easy, comfortable and seamless.
The planes usually go into private terminals at fixed base operators (FBO’s) on the airport grounds. These FBO’s may be directly linked to the operator or more likely are a third-party service provider. They provide lounges and services for passengers and offer refueling for the aircraft. Just like many other service businesses they have faced staffing issues which impacts the service levels. For instance, the FBO on Nantucket ran out of jet fuel one weekend and then a week later was short of staff partly due to a staff member having a positive COVID test.
Ground transportation and catering are two other big areas that have been impacted.
Most planes come with simple snacks and drinks on board. But any custom catering for private aircraft is somewhat specialized, because not all food will travel well from the restaurant or kitchen to the plane. So, operators have to be selective on who they work with and the type of food on offer. If you’re flying from a more remote airport, which might not see a lot of high-end catering requests, the food delivery adds an additional layer of complexity.
“Our passengers look at the ground transportation and the catering as part of the overall service,” an industry executive told us “and (understandably) expect the operator to get it right and fix things.” He continued to explain how they have been working closely with their partners to ensure that the service works smoothly, during these difficult times for staffing.
NetJets have very openly said “Our solutions for relieving the strain on our hard-working, longtime catering partners include flying food in from larger cities, utilizing delivery services, and partnering with local restaurants.”
Another senior executive at a different firm was very realistic about these service pressures and said “there’s bound to be disappointment.”
Pilots and Staff
All the large operators, including NetJets, Flexjet, PlaneSense, flyExclusive, Wheels Up, and Jet Edge, are adding to the size of their fleets. Which means they are also adding pilots and for the larger operators this can mean hundreds of new pilots.
“Our supply constraints are no different than what many companies are facing today,” said Kenny Dichter Wheels Up Chairman & Chief Executive Officer. In their Q3 earnings call Wheels Up noted that the “biggest gating factor is hiring new pilots” and stated that they “could not fully crew their 1st party fleet in Q3.” Wheels Up have been increasing the compensation and benefits for pilots and notably, following their SPAC public listing, have given equity to their pilots, which is a rather unique long-term benefit in private aviation.
As more planes are flying, this leads to more maintenance requirements, and maintenance requires qualified staff, mechanics and technicians. This is another area where hiring continues apace.
The record demand also means that planes are being heavily used. In more “normal” prior times, when demand was lower, there would be more aircraft for sale, but used planes are selling fast, and the pre-owned inventory is at unusual low levels.
Large operators and providers have been taking steps to ease the load on their fleets and allow them to focus on their current customers. NetJets and Flexjet have stopped selling new jet cards so that they can focus on their fractional customers. PlaneSense briefly introduced a card type program at the start of this year, but had put it on hold by the summer. Sentient and Jet Linx have stopped new jet card sales, and Wheels Up has a 90-day moratorium for new customers. All these large operators cite the need to maintain service levels for their current customers before they add new clients.
At the same time prices are going up - reflecting simple market economics. Whether you charter, buy a card or membership, or look to buy a fractional share or whole aircraft, the prices have all increased during 2021.
So, if you are flying privately, particularly over the busy holiday period, be aware that these sorts of situations are occurring.