Business Aviation Market Intelligence

Covid-19 Impact on Business Jet Market

Covid-19 Impact on Business Jet Market

The outbreak of the COVID-19 pandemic had a massive effect on the aviation industry, including the business jet market, which saw both orders and deliveries decline in 2020. The business jet market suffered from the COVID-19 pandemic due to lockdowns occurring in a number of countries, the introduction of quarantines, the economic collapse resulting from the COVID-19 pandemic, as well as the cash flow issues impacting buyers, financial institutions, and manufacturers.

Mainland China was the main growth driver of the business jet market in the Asia-Pacific region. However, the business jet market in mainland China was also impacted by COVID-19. The graph shows the business jet flight activities of main cities in mainland China were fewer in 2020 than in 2019, slowing by an average of 24%. Since April 2020 that has been a big shift towards domestic flight activity in mainland China, which now accounts for around 85% of all flights.

Asian Sky Media invited several business jet operators in the Asia-Pacific region to give an overview of the market conditions they faced to better understand the changes that COVID-19 brought to the Asia-Pacific business jet market.

A total of five operators answered our survey. One is Sino Jet, the largest operator in Asia-Pacific, with dual headquarters in mainland China and Hong Kong SAR. Another is Amber Aviation based in mainland China with its main markets in greater China. Most aircraft in the fleets of both operators are large and long-range aircraft. Australian Corporate Jet Centres headquartered in Australia, which mainly operates light and large sized jets. MJets in Thailand also answered. It has two aircraft in each of the light, medium, and long-range size categories. Last, but not least was Metrojet, which has its headquarters in Hong Kong and a big operation in the Philippines. Most aircraft in Metrojet’s aircraft fleet are long-range business jets.

All the operators mentioned that their businesses were more or less impacted by the outbreak of coronavirus. Australian Corporate Jet Centres experienced a drop of both international and domestic flight activities, whilst Sino Jet and Amber Aviation also saw a decrease in international flights.

In 2020, we saw a significant reduction in daily operations, achieving only 20% of the planned flight activities.

Gary Dolski, CEO of Metrojet

However, when compared to the first half of 2020, there was an obvious increase in domestic flights for Sino Jet and Amber Aviation in the second half of the year.

Many people decided during the peak of the COVID-19 pandemic that they would fly privately for the first time. This was partly due to a reduction in scheduled airline flights, but travelers also began to realize the safety, privacy, and convenience of flying on a private jet. This brought many new users into flying on business jets, both by charter, as well as looking into becoming first time buyers.

Compared to 2019, the flight activities of our charter services in 2020 substantially increased, equivalent to an 80% growth rate.

Michelle Lv, Sales Director of Amber Aviation

Aside from the overall impact on flight activities, each operator encountered specific problems.

With slower growth than in previous years, Sino Jet expanded its business by creating an FBO to integrate operations, established Sino Jet Academy to cultivate new talent for the industry, and set up a new branch in Hainan, China in the Hainan Free Trade Port.

To overcome the difficulties from the decline in flight activities, Australian Corporate Jet Centres provided diversified services aside from its usual charter services. Metrojet provided improved service packages to its clients and digitalized many procedures through technological advancements. Sam Iliades, the CEO of Australian Corporate Jet Centres said, “ We acquired and merged JetCity and Australian Aircraft Engineering during the COVID-19 pandemic to increase the fleet size, enter the Aeromedical market and conduct in-house maintenance.”

MJets also diversified its operations, by taking advantage of new opportunities. “We are more likely open to new business opportunities that we might have not explored even if it means that we have to think differently.” said Sapmanee Jantajit, the Marketing Manager of MJets.

On the other hand, to solve the issue of cabin crew abroad training and the lack of domestic MRO institutions, Amber Aviation negotiated with the CAAC and training institutions to allow pilots with Chinese Pilot Certificate’s to take practical flight training in mainland China and completed some maintenance programs with its own technicians.

In addition, all operators followed the policies set up by the governments to curb the spread of the COVID-19 pandemic. They took measures such as imposing quarantines, acquiring disinfection goods, and screening temperatures to minimize the infection risks of the virus.

Although all operators saw a decrease in flight operations, they all expect demand to rebound in the future.

Sino Jet, Australian Corporate Jet Centres, and MJets are relatively optimistic about the future development of the industry at the end of the sentence.

With the economic recovery, entrepreneurs’ need of purchasing and using business jets will dramatically increase. I believe the business jet market will have a strong rebound in the coming years.

Jenny Lau, Group President of Sino Jet

Sam Iliades said, “With flights returning to full domestic capacity and “travel bubbles” opening between Australia and paired countries, we see a strong recovery in the market.” Furthermore, Sapmanee told ASM “COVID-19 has closed borders across the region yet we strongly believe that private usage is still in its infancy with lots of room for growth. Besides, infrastructure is where MJets sees opportunities. Ideally, we want to expand our current operations in southeast Asia.”

Comparatively speaking, Amber Aviation and Metrojet both have a more cautious attitude toward its expectation of market. “Our clients are more conservative in purchasing business jets after the outbreak of COVID-19.” said Michelle. Amber Aviation says that it is dedicated to developing diversified charter services for its clients. “We predict that the need of using business jets will continue to increase. As the hour card and charter sharing services are still under development, Amber Aviation will dive deeper into these fields and endeavor to offer new products which cater to the market demands.” said Michelle.

“We anticipate seeing an increase in both our flight operations and MRO lines of business. However, it will continue to take some time before we get back to 2019 levels of flying.” said Gary. Similarly, Gary mentioned his perspectives towards the future development in Metrojet’s business. “JetCard, fractional, and joint ownership are all additional avenues of growth in the business jet market.” Eventually, he predicts a bright future for the business jet market. “Not only will the physical number of business jets increase, so will aircraft infrastructure see an expansion in southern parts of the region enhancing aspects of globalization.” said Gary.

The COVID-19 pandemic heavily affected the business jet market in the short term. However, no long-term shock has been seen. Furthermore, due to an increase in charter operations attributed to the COVID-19 pandemic, the demand for business jets is expected to grow in the coming years. This is because flying privately is one of the only ways to guarantee that a flight will take place, as well as the relative safety it offers, both in the air and on the ground. By combining the information above from operators along with our market forecast, we can see the business jet market is set to expand in the near term, especially as operators explore new opportunities and offer new services.