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Aviation Industry Updates: October 13, 2020

By October 12, 2020October 19th, 2020Industry News

SWA Expanding into ORD for 2021

KEY QUOTES:

  • “Southwest Airlines will add service out of O’Hare International Airport next year, an expansion made possible by the same coronavirus pandemic that has kept many travelers grounded.”

  • “It’s been on our wish list for a long time to supplement Midway,” SWA COO said. “The reduced flying activity with COVID-19 left open space for us to jump in.”
  • “It certainly has a lot of risk, but if executed well, I think they could do well,” Henry Harteveldt, travel industry analyst.
  • “Southwest does not intend to reduce service at Midway, which will remain its primary Chicago airport. All destinations Southwest offers at O’Hare will be cities the airline already serves from Midway, which is typically among its four busiest airports.”
  • “SWA declined to offer specifics on the number of flights or destinations from O’Hare, saying Southwest is still working on those plans with the city’s Aviation Department.”
  • “Southwest will use O’Hare’s common-use gates, and no other airline is giving up access to gates, according to the Aviation Department.”
  • “Southwest has historically avoided going head-to-head with rivals in the U.S.’s biggest airports and focused on growing in less crowded, smaller airports like Midway, but that has changed in recent years.. Southwest also announced plans Monday to return to George Bush Intercontinental Airport in Houston, where it already serves William P. Hobby Airport, and recently announced it would begin flying to Miami International Airport.”
  • “We are counting on it taking a while for demand to come back, so coming to markets we weren’t in before helps us make productive use of our people and assets.”

Chicago Tribune

Private Flights Recovering to Normal in 2021 | Fact or Fiction?

KEY QUOTES:

  • “Private-jet flights are poised to regain their 2019 levels next year as the industry rebounds from a much shallower decline than after the 2008 financial crisis, according to Honeywell International Inc.”
  • “Now private flying, which for many passengers generates less health anxiety than traveling in a plane full of strangers, has rebounded more quickly despite a severe economic downturn and continued travel restrictions.”
  • “Sales of private jets will take longer to recover, Charlotte, North Carolina-based Honeywell said. New aircraft deliveries will drop to 491 this year from 720 in 2019, which was the best year since the Great Recession more than a decade ago.”
  • “Deliveries won’t get back to their 2019 level until 2025, Honeywell said.”
  • “More encouragingly, the pandemic hasn’t spurred a wave of forced aircraft sales like in 2008.”

Bloomberg

A Tale of Two Markets | Domestic Flying Predicting International Trends?

KEY POINTS:

  • “Business-aircraft activity has recovered more quickly than commercial aviation. But that rebound has been led by private flights to the safety of second homes and not corporate flying on business trips.”
  • “There are bright lights, new things that are happening that are encouraging, and there are certain geographies and parts of the business that are really challenged in this environment,” he said. One of those bright lights is the charter market, largely fueled by customers new to business aviation.”
  • “FAA aircraft movement data show a gradual resurgence of domestic U.S. activity since the April trough, with Part 91 private operations stabilizing by the end of August at around 18% less than in 2019. “The Part 135 charter market is doing much better, at 5% below 2019” and continuing to grow, Johnson said.”
  • “Second-home locations were showing an increase in traffic. Activity at Eagle County Regional Airport in Vail was trending 33% above 2019 levels for August. “Jackson Hole [Wyoming] and Aspen [Colorado] also were doing better,” he said. “Throughout the pandemic, Florida was impacted less, its airports tracking pretty darned close to 2019.”
  • “Flight activity data also show a disparity based on aircraft size. During August, charter activity with midsize jets was running 2% above 2019 levels. “Large-cabin is a very different pattern. Throughout the pandemic they have really struggled. Because of the challenges with different restrictions, it is much harder to travel internationally than domestically,” Johnson said. “It is better than it was, but large–cabin is not coming back at same rate as smaller domestic aircraft.”
  • “Part of that light-jet demand is from people new to business aviation. “We are seeing a lot of first-time airplane buyers . . . in the $6 million and under, [Embraer] Phenom 300 and below, light-cabin segment. The common theme is people who have the means and are saying they are not going to travel on the airlines,” says Kirby. “We are also seeing a lot of people upgrading out of single-engine turboprops.”
  • “Flight schools also have seen a recovery in activity, despite the pilot furloughs at the airlines. “It’s a very dynamic environment,” says Robert Rockmaker, president and CEO of the Flight Schools Association of North America. “We estimate we’ve lost at least 50-100 schools of different sizes, but the good news is schools that are open are operating at 70-100% of their pre-COVID levels.”
  • “The lower end of the market presents a different story, fueled by individuals and families seeking a safer way to travel.”
  • “We certainly have seen a pickup,” said Donnelly. “The level of activity and orders that are closing have been stronger on the light side. King Air 250s are very strong. [Citation] M2s are strong. They’re more for private businesses, high-net-worth individuals.”
  • “New customers entering business aviation tend to follow a pathway. “It starts with charter and club and hour, and moves into fractionals before whole ownership,” said Donnelly. “Somebody that’s never been on a business jet before doesn’t buy a new airplane. They’re going to start by getting some experience with it by the hour and progress to fractionals.”

https://aviationweek.com/business-aviation-week/private-flying-takes-lead-business-aviations-recovery?hss_channel=lcp-758421

Raven’s Take:

These trends within private aviation are leading indicators that companies will be needing help (i.e. JOBS) as 2021 comes upon us. Coronavirus has shaped private aviation in unexpected ways, creating new programs that make the private flight more efficient and affordable. They are going to innovate to grab as much new business as they can; aiming for high net worth individuals new to private jet travel and corporations that want to dabble in travel but are not yet ready to put their employees on commercial airlines. Your ability to showcase skills that will be useful in a corporate/private aviation environment will put you heads ahead of the pack. Do your research, network appropriately, and recognize that most roles within smaller mom/pop operators likely won’t be posted online.

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