Private air travel: a luxury or a necessity?
While global economy growth in the first half of 2013 was relatively slow, according to IHS Global Insight it still experienced a real GDP growth rate of 2.4%. This year, it is expected to grow at an annual rate of 2.9%, mostly due to the rapid growth of such emerging regions, as Asia, Middle East, as well as the CIS. As corporate profitability continues to improve globally, the demand for business-related private air travel rises accordingly.
Analysts often point to the rapid expansion of business aviation in the CIS as an example of how quickly an untapped market can be penetrated. The region’s private jet fleet has nearly quadrupled in size over the last 10 years, accounting for almost 7% of overall industry deliveries during 2013. In addition, despite the uncertainty around the near term prospects for the CIS economy the IHS Global Insight forecasts the region to return to 3% GDP growth by 2016, meaning the demand for private travel will only grow, especially among corporate clients.
“In the CIS, great distances over inhospitable terrain make ground transport challenging, while the commercial aviation network provides inadequate service outside of major centres. As a result, business leaders start to rely heavily on business aviation, especially with the growth of the on-demand air travel market, which endeavours to provide solutions for business jet travellers who do not wish or are unable to acquire and operate an aircraft of their own,” shares Vitalij Kapitonov, the CEO of KlasJet.
Despite the fact, that most people continue to view private travel as a luxury, business jets actually provide a wide range of conveniences that are of especially high demand for business needs. For instance, NEXA Advisors’ most recent study on business aviation and the world’s top performing companies concluded that companies using business jets were likely to outperform non-users on revenue growth, innovation, employee satisfaction and market share. In addition, the less quantifiable but equally important benefits of business jet use include on-demand flight schedules, the ability to conduct business privately during flights, as well as more direct access to companies’ sites (which may not be well-served by scheduled airlines). As a result, it should raise no eyebrows that according to a recent article in Bloomberg, spending on private jet travel rose 61% in 2013 among CEOs of the top 10 S&P 500 firms.
“For those unfamiliar with air charter costs, prices can initially be a bit intimidating. Still, it may surprise many to know that while generally a private charter flight will cost more than a first-class commercial flight, private charter can actually be remarkably economic - particularly in cases of flying in a small group or to a remote location,” comments Vitalij Kapitonov, the CEO of KlasJet. “Another potential cost saving benefit is the ability to reach multiple business-related locations in a single day, thus avoiding overnight stays and hotel fees.”
Additionally, you do not have to arrive hours before your flight time to go through security lines and can delay the aircraft's departure time if you're running later than expected. Moreover, there are more than 5 000 airports that can accommodate private aircraft (as opposed to 500 airports for larger commercial aircraft), so you can actually land closer to your destination, thereby reducing ground transport time.
“Of course, private jets are far from having monopolized the market yet. To meet the demands of premium travellers, many commercial airlines like Etihad and Air France are starting to bring the private jet feel to their commercial jets,” comments the CEO of KlasJet. “However, usually if a company or a person can afford a private jet ticket for their upcoming trips, they will do so. Therefore, the trend towards private jet or enhanced first class travel will only continue to grow.”