The private aviation industry begins 2012 on a turbulent recovery flight path. 2011 figures showed growth of just 1.9 per cent in overall industry traffic movements, but with an unsettling five per cent drop in December. Yet 2012 still promises to be an exciting year ahead:
1. The impact of the London 2012 Olympics will be a life-saving cash injection for many private jet aircraft operators. Demand will be very high and, as slots will be severely limited, there will be many disappointed private jet customers. Airports such as Oxford, Southend and Lydd will become medium-stay parking for large numbers of private jets that inner London Airports cannot accept.
2. RAF Northolt to become London’s premier VIP hub. With the UK Ministry of Defence almost bankrupt, the Royal Air Force’s crown jewel of airports will need to generate cash. The current slot limit of 10 private jet landings per day will be challenged and increased significantly.
3. Private aviation will fight back against regional tax incentives. 2012 has started with Italy declaring that non-Italian jets parked for more than 48 hours will be heavily taxed—an incentive that will simply drive business away to neighbouring countries. 2012 will see UK industry work out the practicalities of collecting Air Passenger Duty (APD) on private aviation flights.
4. The industry will address pilot shortages. Several factors are causing a reduction in the pilot pipeline into business aviation including reduced flow of ex-military pilots; difficulty in securing training funds; and a lack of focus and investment in attracting pilots to business aviation. I believe 2012 will see organisations such as EBAA and BACA working hard to find solutions.
5. Customer response speed will become paramount. With operators competing so fiercely for business in this climate, response speed will become a critical element of any successful business model in 2012.
6. The industry will embrace mobile apps. Despite many raising doubts about the value of mobile and tablet applications for private jet users, the industry is now engaged in the development of many interesting apps for both customers and flight crew.
7. More new and experimental business models. 2011 saw some new business models entering the market, focused on jet sharing and empty legs. This trend is likely continue in 2012, as entrepreneurs look for potential solutions to industry inefficiency and to the perceived high costs of business aviation.
8. New aircraft trends. Embraer will continue to increase its market share of private jet manufacturing. The new $18 million Legacy 500 launch will be one to watch with Embraer’s military technology ‘fly by wire’ flight controls setting new standards within the medium sized cabin class. At the top end of the market the Gulfstream G650 will become the ultimate purchase for the savvy 2012 private jet setter.
9. Rise of the charter segment. Ad-hoc charter will continue to gain share as a sub-sector of the industry as existing private jet users migrate from other options that involve an upfront commitment of cash. Increased transparency of pricing and improved VIP service levels within the charter segment has increased its appeal.
10. Emerging markets. Aviation growth in Asia will continue to support global private jet manufacturers, and new deliveries will be dominated by Asian customers. These new aircraft will boldly display company and individual names on their external paintwork, leaving Europe’s widely un-branded fleet of private jets looking very plain!