As the travel industry remains heavily impacted by the coronavirus pandemic, Pascal Bachmann, SVP EMEA, Jetcraft, looks at how the business and private aviation sector is faring.
The outbreak of Covid-19 continues to evolve, along with the travel advice, and restrictions have been placed on all aspects of flight, both in commercial and business aviation, which are being updated almost daily. Coronavirus has brought much uncertainty to the world and, unfortunately, the future is still unclear.
Although flights are limited, there is an indication that if people were not prevented by current government restrictions and could use their private aircraft, they would. Also, we’re still seeing a surprisingly good level of activity on the sales side. The overall outcome and impact on our industry will be largely dependent on how long it takes before movement restrictions are lifted.
Business aviation has prevailed through economic ups and downs, and any predicted downturn stemming from the Covid-19 pandemic will have its own uniquities. Fortunately, we learned many valuable lessons in 2008 that should ensure the industry is prepared to weather this situation, whatever it brings. Manufacturer production levels have evened out, to better match supply to demand, prices are holding steady across new and pre-owned markets, encouraging a level of stability, and there is an increased number of high-net-worth individuals in the market today, who may be less impacted by the longer-term effects of the pandemic and will retain their aircraft.
Is now a good time to buy a business aircraft? For those who are in a position to do so, absolutely. A variety of quality inventory is available, interest rates are low and bonus depreciation still applies, so there is plenty to take advantage of.
What’s more, it is becoming increasingly important for buyers to maximise their benefits and navigate the current market. Minimising downside exposure is critical. To help mitigate this, owners should avoid holding a second aircraft on their books when upgrading to a new model.
While these are challenging times, we do encourage those who can to take a long-term view and consider how an aircraft purchase or upgrade can meet their current or future needs. It’s at times like these where the speed, efficiency, flexibility and safety of business aviation comes to the fore. The ability to fly anywhere at a moment’s notice and get home quickly is proving invaluable. By avoiding large crowds of people and minimising contact with others, business aviation can help limit the spread of infection for those who must travel.
Sadly, some buyers will be financially impaired by the effects of the Covid-19 outbreak, and yet there will be others who will come through this experience even more convinced of the value of aircraft ownership, suiting the needs for the world we live in today.
Ultimately, it’s too soon to tell exactly what will happen, but our priority is to gather as much information as we can. This is a time for everyone in business aviation to double down on resources and capabilities in order to help our clients properly mitigate and manage through this period.