This year has been a difficult one for the aviation industry. According to TRAQPak Flight Activity Data, in November, North American flights were down 16%, and European were down nearly 23% from 2019. Despite these declines, there are reasons to be optimistic about the charter industry in 2021.
New Charter Customers
Many travelers who can afford charter flights opted to fly commercially before the pandemic, often viewing it as a luxury they didn’t need. While the benefits of efficiency, privacy, and convenience may not have been compelling enough for these travelers, safety concerns have made it an essential way to travel. During the pandemic, these passengers opted for charter flights to avoid contact with strangers.
New charter passengers also enjoyed the added benefits of avoiding TSA lines and waiting in line for check-in. In addition, passengers on private flights often go through customs and immigration offices separately from crowded airport terminals. This change in attitude is a benefit to private charter operations. After flying privately, it may be difficult for these travelers to return to commercial airlines.
Record Low Fuel Prices
Fuel accounts for up to 40% of the total expenditures for aircraft operations. Currently, jet fuel prices are down 11% from last year and are 25% lower than the all-time high in July 2008. Given that fuel comprises such a large part of operating costs, charter airlines can offer more competitive prices for charter flights. For consumers, this means charter travel can cost up to 20% less than usual.
In addition to low fuel prices, operations can also invest in dynamic technology to decrease their fuel costs and pass on the savings to their passengers, making the charter flight more attractive to travelers.
There are currently more than 100 COVID-19 vaccines under development, with a number of these in the human trial phase. In the past month, Pfizer and Moderna have received emergency approval from the US Food and Drug Administration (FDA) to distribute their vaccines that could result in widespread availability as early as spring 2021. The US government is working with biotechnology companies to create millions of doses of vaccines while in development to ensure they will be available soon after approval from the Centers for Disease Control (CDC).
New vaccine availability has given a boost to airline stock prices. Travel agents are reporting an increase in bookings for trips in 2021. After spending most of 2020 in lockdown, the public is anxious to travel.
Until a vaccine is widely distributed, improved testing procedures may be enough to convince some to travel. Rapid tests, which provide results in minutes instead of days, are now more widely available. In November, the FDA approved the first COVD-19 home test. Travelers also have additional options such as portable test results to certify their health status before departure.
Return of Business Travel
Business aviation plays a crucial role in the industry. As businesses reopen, travel is becoming necessary. With the decline in commercial airline schedules, getting where business travelers need to go has become more difficult. With charter flights, the need to change planes at a major hub is eliminated, and more trips can be made in a single day. Using private flights also puts clients at ease that the visitors were not exposed to the virus on a commercial airplane.
Over the past year, companies have saved money on trade shows, conferences, and other marketing expenses that were canceled due to the pandemic. This allows them to expand their budget and approve private travel. Companies that have previously used private aviation are expanding their usage, and others are exploring this option.
Extending the Sports “Bubble”
Sports travel has the potential to become the fastest-growing segment in the air charter industry in 2021. Due to rescheduled international events and new health protocols imposed by governing bodies and federations, charters’ demand is growing. In the US, the NBA and NHL opted to keep their teams in a “bubble,” away from the public and potential infection. The NFL and Major League Baseball did not use this approach, keeping games in stadiums across the country. Chartered flights kept players and coaches in a “bubble.”
Sports teams are now far more aware of the health risks around travel and are determined to keep their players and staff safe. While most high-profile professional teams previously chartered flights for away games before the pandemic, smaller organizations are now looking into this option. Private charters are an alternative they haven’t tried before due to the costs and ease of scheduling commercial flights. But during the pandemic, teams are looking at charters due to increased anxiety around traveling.
The year 2021 will see major sporting events that were postponed due to the COVID-19 pandemic, including the Tokyo Summer Olympics, the Ryder Cup, and international soccer matches – Euro 2020 and Copa America. Alongside the previously planned 2021 schedule of international sports, there will be a great demand for international travel to these events.
Private charters will not only be attractive to teams but also to their fans as well. Once fans are allowed back in the stadiums, they may choose charter flights rather than travel on commercial airlines. It is also possible that teams, sponsors, and travel companies will organize group travel packages that include charter options.
With this potential for increased activity, aviation operations need to stay on top of flight traffic, fuel costs, and the most demanding routes. ARGUS TRAQPak flight tracking software supplies real-time and historic flight operations data with aviation tracking to increase competitive edge. The flight-tracking software and robust database provide information vital to numerous types of aviation businesses, including charter operators to fixed-based operators.
Vice President of Market Intelligence