Business aviation manufacturers are laying off employees although flight activity is “recovering smartly,” said Brian Foley, a consultant with Brian Foley Associates. 

“Scheduled airline flights remain comatose as well-heeled travelers look for alternatives to the isolation ward of public air travel,” Foley said. 

For the week of June 14-21, the number of private flights were down 17% compared to the same time a year ago, according to FlightAware, while airline traffic was down 69%. On June 20, in fact, business jet travel was 2.5% above the same day a year ago. 

“Private charter flight inquiries are ringing off the hook, and jet card sales, essentially debit cards of charter hours, are selling like crazy,” Foley said. Charter providers report that as much as 50% of their sales are to first-time users. 

In addition, owners are hanging onto their jets. The number of used jets on the market has hardly changed since the COVID-19 pandemic began, he notes. 

“Private flying suddenly seems to be a hot commodity, and it would seem appropriate to turn up the production wick on new, spiffy planes,” Foley said. “Instead, and rather counterintuitively, business jet makers have been laying off workers. Not jut a few here and there, but by the thousands.”

Gulfstream, for example, has cut 1,145 jobs since December. Bombardier has reduced employment by 2,500 and Textron Aviation has furloughed workers and laid off 250, including 70 in Wichita. “Other majors have also made cuts, but in a stealthier manner,” Foley said. “There are suggestions that there could be more.”

In 2019, business jet deliveries rose 15% from the prior year. It was a year in which several new models were certified, “which opened up these one-time floodgates,” Foley said. Another factor was the delivery of small single-engine jets tracked by analysts, which further distort the market’s health. 

Buying and operating a business jet is a multimillion dollar undertaking, which limits the potential base of buyers. Many with the desire and financial ability to own a jet already do. 

“Some will perhaps now fly ownership to skip the airport crowds, but not enough to meaningfully move the new jet sales needle,” Foley said. And repeat buyers will wait for some of the economic uncertainty to subside before investing capital. 

In the meantime, providers will not run out of charter or fractional program jets in the near term to support fleet expansion. The aircraft have been underutilized for many years, and any near-term demand increase will be absorbed by the existing fleet. 

In addition, many firms operate jets owned by others seeking to earn extra income when they are not using them. “Thus, even a permanent spike in charter usage wouldn’t result in aircraft orders from charter providers,” Foley said. 

It is also likely that new entrants to private aviation will return to the airlines once the “public travel hysteria” subsides. 

Fractional ownership providers report new entrants to private aviation are buying jet cards rather than fractional shares, which are more of a short-term commitment. Providers will not increase their fleet size until they see whether the new fliers stick with private travel once a vaccine becomes available, Foley said.