Viewpoint: Expect More Airlines To Invest Directly In Business Aviation

Delta Air Lines’ involvement in Wheels Up, and in the private aviation market, is nothing new: Delta already owns 20% after merging Delta Private Jets with the company in 2020.

This recent investment, however, may have been influenced by recent surges in demand for both private jet travel, and on the commercial aviation side, first and business-class seats. As a result, airlines are betting on a new era of luxury travel with investments in their cabins and lounges.  As competition in the airline market rises due to the high demand for travel generally, is there a business case for carriers to diversify their offering even further by investing in or collaborating more with the private aviation sector?

Many believe we are going to be seeing more of this kind of investment by airlines in the private aviation market, particularly in innovative businesses, like Wheels Up. 

Achieving long-term stability is no small feat for the airline carriers of today, with tough economic conditions, unstable micro and macro environments, and a much more considered, researched clientele making strategizing for future success almost impossible. 

The future of many airlines rests on a balancing act between investing, reaching net-zero targets, and making enough profit to do so. Many are looking to both fleet and business fleet, business diversification, and even inter-industry collaboration to ensure their futures align with the best course for survival as competition among airlines hots up.   

A sharp rise in demand for luxury goods and personalized experiences, which has rebounded rapidly following Covid-19 lockdowns in 2020, is spearheading a boom in first-class and business-class flight bookings, leading big airlines to bet on a new era of luxury travel with investments in their cabins and lounges. There is also the possibility of more collaboration between the private aviation sector and commercial sector as commercial airline businesses look to where the potential for the winning innovations – both sustainability and luxury-related – are.  

Ultimately, with commercial aircraft order books booming, I believe the strategically successful airline of the future will offer a mosaic of solutions and business models, a part of which may involve inter-industry collaboration with the private aviation sector. This is something that is not entirely new to airline business models, but what we have seen recently in the further investment in Wheels Up by Delta Air Lines is an evolution of this model. Delta and CEO Ed Bastian are perhaps pioneers in this regard, diversifying the airline’s offering by investing directly in the business aviation charter market.  

If the surge in personalized, luxury and private travel continues beyond trend – which I believe it will – we can expect to see other major carriers invest in business aviation, and particularly in the technology and innovative offers the private aviation sector can offer commercial customers.

Raphael Haddad is president of Jetcraft Commercial, the commercial division of global aircraft trading firm Jetcraft. The company specializes in commercial aircraft sourcing, re-leasing and disposal.