What does 2021 have in store for European business aviation?

What does 2021 have in store for European business aviation?

GlobeAir's CEO outlook on 10 BizAv topics in 2021

Read GlobeAir's CEO outlook on ten of the most important business aviation's topics in 2021

I have been active in aviation since 2002, and I can safely say that 2020 was a year like no other. Indeed the year 2008 was challenging – due to the Lehmann crisis disrupting the economy – but the Corona pandemic eclipses everything that has gone before. In the past year, the entire industry has learned a lot and many things have changed and adapted. But what does this mean for 2021? At the beginning of a new year, it seems that so much is still uncertain.

The start of the vaccination programs, which began just a few days ago, is a source of some confidence for an optimistic future. Until the pandemic is finally contained, however, travel will remain disrupted.

It is still uncertain when the travel industry will recover and be able to sustain itself. However, it is already clear that aviation and the travel industry, including private jet charters, will change irrevocably and permanently after the pandemic.

I have gathered some of my thoughts summing up the changes that I expect to see in European business aviation industry over the next twelve months.

1) Business trips by ad-hoc air taxi hire will grow

As the global economy will recover gradually, more and more business trips will be needed

Experts expect that the global economy will recover as vaccination coverage gradually progresses. Accordingly, this will also mean more business travel. Personally, I agree with this scenario. As travelling became harder, 2020 is when everybody learned how to meet via Teams, Zoom, Webex, Sildo and others. Tools such as these became fair substitutes for face-to-face meetings and signified meaningful and efficient ways to stay in contact when meeting up was not possible.

And that’s what I would like to stress: all those digital tools could never replace personal meetings and social interactions. but due to efficiency and cost pressures, many onsite meetings will be replaced by online tools. This trend will be sustainable and therefore business travel will no longer return to pre-Corona levels; it will permanently be less than before. The legacy airliners need to respond to this development and reduce their network.

On the other hand, I see a strong need for personal and high-quality onsite meetings. Global leaders of industry and business need to meet to develop deals and close deals to accelerate the much-needed economic recovery. C-levels, top executives and decision makers need to meet and therefore travel. Driven by the need for time efficiency and the need for biosecurity, these business trips will be predominantly made by low-cost private jets, not luxury ones. The lack of supply from the well-known providers of business travel in the EU, such as the Lufthansa Group, will reinforce this trend. In this respect, private aviation will be used by more companies and will not only be reserved for the CEO and Chairman, but also for other levels of management and executives. The light jet segment will certainly grow again, as it did in 2020. At GlobeAir, we expect additional business travel growth of +20% YoY mainly in Western Europe. I expect more activity in the European business capitals such as London, Paris, Geneva, Zurich, Munich, Hamburg, Frankfurt, Vienna, Milan and Düsseldorf. The Eastern European capitals will, in my estimation, remain at their usual low level in terms of business travel.

2) Will business aviation be impacted by remote working habits?

Remote working will have a strong influence on route patterns

Since the beginning of 2020, to fight against CoViD-19, we have become used to working from home and adopting remote working. In 2021, things won't change rapidly, and many people will still work from home, or from wherever they get a good WiFi connection.

Those passengers who own a second home in one of the traditional summer destinations such as the Balearics or the Côte d'Azur, have already started taking longer breaks to work from there. We see the blurring line of work and leisure as a likely steady trend; a behaviour that will undoubtedly impact routes and destinations.

For example, my #DreamTeam has observed that since March 2020, the Côte d'Azur airports (Nice, Cannes, St Tropez) have been more popular than Paris. I think this kind of shift will continue in 2021, primarily as airlines won't be resuming all their routes until 2025.

3) How will booking behaviours change in 2021?

Why last-minute bookings can only be sustained by private jet operators who have full control on their fleet?

Since March 2020, we have started to learn about the impact of travel restrictions – imposed practically worldwide and ending up disrupting our travel plans for months. The World Health Organization (WHO) experts believe that global travel and aviation are the primary responsible for spreading the virus. Unfortunately, the challenge is that these travel restrictions are country-specific; countries are handling them differently without harmonisation.

Sometimes, only a few hours may pass between the news publication and the entry into force of these restrictions. This approach has caused a great degree of uncertainty amongst travellers. Am I allowed to travel? What are the limits in place, and what are the requirements? Do I have to quarantine upon entry or after I come back home? And these are just some of the very many questions we have asked ourselves for the entire course of 2020.

This has led to business and leisure travellers making very last minute travel plans. Usually, we have an average of 72 to 48 hours lead times between booking and departure. The ever-changing travel restrictions have now meant that my GlobeAir Customer Service team now has only a few hours between booking confirmation and departure to organise the flight. Also, due to the CoViD-19 travel regulations, further additional administrative time-consuming work is necessary. Due to the continually changing travel regulations, which have now lasted almost a year, travellers have become accustomed to the fact that it is possible to book a private jet at short notice.

Operators now face a significant logistics challenge; without controlling their fleet; however, it is almost impossible to cope with the challenges. As GlobeAir has 20 aircraft in its fleet and continues to grow, my team can facilitate the new short-term pattern. I expect these booking patterns to remain even after all travel restrictions are lifted, as CoViD-19 is no longer a global threat. Simply because the ad hoc private jet user got used to it. However, my strong recommendation for travellers is to focus on planning.

As more and more routes require a negative CoViD-19 test to enter a specific country, we expect a maximum lead time of 48 hours before scheduled departure. Additionally, the Brexit paperwork will be surely something to consider when planning your travels.

4) Boost of private jet cards and membership programs

2020 has seen a surge in private jet cards and 2021 will see the trend confirmed

Since the outbreak of the pandemic, many business travellers have discovered business aviation for the first time. My team and I see two main reasons behind this shift. On the one hand, the significantly reduced supply of airlines demanded alternative travel options; on the other hand, biosecurity and the risk of being around big crowds – More on this later in this same article.

I have seen many passengers choosing a private jet for the first time and eventually becoming frequent flyers precisely for the reasons mentioned above. At GlobeAir we call them "converters". They fly once and decide to fly repeatedly; converters start to understand the higher convenience, the excellent service and the trust people know us for.

On-demand private charter is perfect for those passengers who fly occasionally. Still, when you fly five or more flights per year, a private jet membership program like GlobeAir's FixFlex starts to become very attractive. FixFlex programs offer guaranteed availability, fixed pricing and many more benefits developed by GlobeAir and our partners (Sixt, Camper & Nicholson, KATE & KON, 4experience and more). In 2020, we released the unique and exclusive One Million Jet Card, which was successfully awarded to a Dutch entrepreneur. I do not doubt that my team will issue another card of this sort throughout 2021 as well.

5) Focus on biosecurity, vaccination programs and passports for air travel

Vaccination programs will give us hope for normalised travel

CoViD-19 has shown us how a pandemic can break out within a short period of time and take us all aback. The WHO believes that even once CoViD-19 is defeated and possibly eradicated by vaccination programs, other pandemics could develop. What we have learnt from this past year is that crowds are the perfect environment for a virus to spread and quickly lead to a pandemic. People have learned the importance of keeping social distance, and consequently to avoid crowds. By their very nature, airports, with their long queues for security checks and boarding gates, are a high risk source for potential contagion of all kinds of viruses. In a scientific study, my team and I have shown that there are only up to a maximum of 20 possible contact points when travelling by private jet compared to 700 possible sources of infection when travelling with airlines.

Awareness about reducing infection risks and the importance of staying away from crowds to increase bio-security will remain. I expect this to be a sustainable driver for business aviation growth. In addition, I see tendencies for mandatory vaccination for air travellers as well as the need to carry a vaccination passport at all times, to be presented prior to boarding. In recent weeks, politicians have been making more and more statements about this vaccination strategy for passengers on airlines. Personally, I am convinced that this solution will come and will also apply to users of ad hoc private jet charter. First applications have already been deployed and passed the staging process successfully.

6) Environmental protection and synthetic fuel

The importance of CSR

The positive development set in motion years ago to decarbonise the world should be continued; we owe it to our children and grandchildren to do so. The pandemic did not stop the process but slowed it down in the short term. A strong commitment to sustainability is now an essential part of being a private jet operator and over the next year, as we recover from the pandemic, we will see many more companies in our sector putting this at the heart of their offering as well as an increase in third party providers offering services to support this.

My team already launched a CSR programme in 2018 and we continue to develop it. This program includes a carbon offset scheme we offer for every flight. Since its introduction, many customers have opted to offset their flights. I expect an increase in carbon offset flights for 2021. I further expect such offset programs will be part of future rankings and quality standards at private jet operators. Personally, I am convinced that synthetic fuel will be an essential part of decarbonising aviation. Business aviation will be a pioneer in this respect. Research in this field is already very advanced and many test phases have been successfully completed. 2021 will bring further successes in the field of synthetic fuels. My GlobeAir team is in constant dialogue with the leading fuel suppliers.

7) What is going to happen to small regional airports?

Many regional airports will probably remain closed

Our GlobeAir customers and passengers use more than 900 airports throughout Europe. Many of these airfields, especially regional airports, have had little or no revenue since March 2020, and some have remained closed. Some of these airports will not survive economically and will close forever. The dense network of regional airports is a major advantage for business aviation users to get closer to the final destination. For some of these airports, the current situation may also represent an opportunity, as the need for additional, previously uncommon, types of revenue has been recognised and implemented. The real estate development around the airport plays a major role here.

8) The implications of Brexit on private jet travels in Europe

How to travel to Great Britain and Northern Ireland and bring along your pets

On 1 January 2021, Brexit was formally implemented and will become part of our lives. The treaty on future relations negotiated between the UK and the EU and ratified by the governments provides clarity. For aviation, the rules are now clearly on the table. Maybe the agreed terms are not what our industry wanted on either side but we have to make the best out of it.

Back in December 2020, the British Civil Aviation Authority (CAA) offered EU based private jet charter operators the chance to apply for a Third Country Operator (TCO) block permit valid till 31st March 2021. My team applied and successfully received the certificate.

9) What's the impact of drones on urban mobility?

New technologies and aviation trends

There is no doubt about it, urban mobility will change permanently. The road networks of Europe's metropolises are at the limits of their capacity and can no longer be expanded using methods that have been used up to now. Global developments in the areas of environmental protection and the shared economy are key drivers for this revolution in urban mobility. New technologies in many areas such as lightweight construction, drive technologies, battery technologies or autonomous control systems are the basis for the changes. Regulators have reacted to the demand and developments.

For example, the European Aviation Safety Agency (EASA) adopted the framework conditions on safety for the operation of air taxi drones in semi-autonomous mode in 2020. The development of electric vertical take-off and landing (eVTOL) jets has rapidly gained momentum. Some projects are already well beyond the concept stage and are completing test flights. Only recently, the Austrian aviation authority AustroControl granted the company ehang permission for passenger test flights in a specified test area and flight envelope. Other companies such as Lilium, Joby, Magnix, Pipistrel, volocopter, Eviation, Ampaire, and their projects are similarly advanced. I am convinced we’ll see some exciting steps forward in some of the leading concepts in 2021. I would like to position myself and my GlobeAir team as strong stakeholders of future urban mobility. I am convinced that in the future my GlobeAir team will additionally cover the last mile as an operator with this new technology. Clearly, this is an additional service in our portfolio and we want to be the operator of these new air taxi eVTOLs. Therefore, I see it as our responsibility to deal intensively with the changes in urban mobility and new technologies and to actively shape them.

10) What's the future of business aviation?

M&As and continued consolidation of the industry

The pandemic will be a catalyst for change and upheaval in so many industries, including business aviation. Especially after such a difficult time in 2020, I think some ad hoc charter operators will have to merge to survive. The market will see less fragmentation and the development of fleets that grow in size. This move towards larger units is also driven by customer demands.

With increased attention to security and many new entrants to the market, customers are becoming more brand conscious than before and are looking for the security of well-known companies or groups. My GlobeAir team is already in favour of this development and we want to continue to grow, whether organically or through acquisitions, and help to shape our industry in a sustainable way. It is important to us to meet and exceed customers' high demands for premium service and security, so we want to be part of setting new groundbreaking standards.