Aircraft utilization at Flexjet has doubled in the past three weeks, while leads from potential clients are “off the charts,” as the fractional provider operates during the novel coronavirus pandemic, Flexjet CEO Mike Silvestro said on a Jefferies Equity Research webinar June 2.
At Sentient Jet, Flexjet’s sister company, half of the private jet hours sold since early April have come from new customers. And at Air Partner, based in Fort Lauderdale, Florida, May requests rose 210% compared to May 2019 with inquiries from individuals and corporations seeking alternatives to the airlines. Interest is for flights from June through August.
Since the low point of March, flight volume at Boston-based Sentient Jet has risen dramatically, while inquires for quotes have risen 241%, it said. Over the Memorial Day holiday, volume at Sentient Jet was 90% of the volume from a year ago and about 80% of its budgeted numbers before the outbreak of COVID-19.
The first few weeks of the COVID-19 pandemic were difficult for providers, such as Flexjet, which flew many repatriation flights to international destinations.
Today, most Flexjet flights have been for travel in the U.S. with hot spots including Arizona, Florida and Texas, Silvestro said. Meanwhile, flights to Teterboro, New Jersey, near New York Citytraditionally a top destination for private jet flights—have fallen and are “not even close” today, he said during the webinar, hosted by Jefferies analyst Sheila Kahyaoglu.
At Flexjet, most of the flights and inquiries have been for personal travel as organizations appear focused first on how to get employees safely back into the office, Silvestro said. In the past several years, Flexjet has concentrated on corporate travel and has moved to newer and larger aircraft as a higher percentage of its fleet as a result.
Flexjet operates Embraer, Bombardier and Gulfstream aircraft.
Most flight restrictions in the U.S. now have been lifted, although restrictions in Europe have been more challenging, Silvestro said. Restrictions for entering Europe have been varied among the countries, although Silvestro expects those to lift in the next “handful of days.”
Today’s COVID-19 crisis is unlike previous downturns, which have been financially based, he said.
“Private airplanes were always the first thing you gave up and the last thing that came back,” Silvestro said. Now, he predicts private aviation to be the last thing people want to give up and the first to come back.
He expects those with the means for private travel, who before did not do so, to turn to private aviation for family members and employees.
Statistics from McKinsey, for example, show that more than 90% of those who can afford to travel privately now don’t, Sentient Jet CEO Andrew Collins said.
“We are now seeing this change as outreach from new customers has increased and many of them are coming off the sidelines and turning to private aviation as a trusted travel solution,” Collins said.
David McCown, Air Partner US president, expects private to be “extremely busy” as the travel industry rebounds. That includes an influx from those who have never flown privately because of the enhanced safeguards in place.
Silvestro agrees. “I think there are great opportunities for us,” he said.
However, it will take time for the business aircraft industry to come back.
It is unrealistic to think “we’re going to snap our fingers and jump out of this,” Silvestro said. Those in the business of moving people around, including private travel providers, airlines, rental car companies and Uber, for example, will feel the impact from the COVID-19 pandemic over the next few months or year or so, as people decide to travel less, he said.
Flexjet took actions early and reduced its fleet to about 60 aircraft to reflect the reduced level of flying. It also put in place a program called “Project Lift” for crew members, who live in various locations, to fly on Flexjet’s fleet rather than use the airlines as they position to begin a Flexjet flight or return home to minimize their risk of exposure to the virus.
Flexjet also acted early to disinfect its aircraft, using MicroShield 360 throughout its fleet, Silvestro said.
In the past 90 days, training has also been a challenge.
“We did not want to put them on the airlines for training,” he said. But the cadence is beginning to ramp up, and Silvestro expects training providers to see a significant upturn.
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