May 2 (Reuters) – Guy Stockbridge runs several businesses from his headquarters in central California, including landscape companies that impact his home state and a solar utility company operating in 17 states.
Flying is a way of life for Stockbridge and others at his company, Elite Team Offices, based in Clovis. For years they flew both privately and on commercial flights from Fresno, about 10 miles from Clovis. Then the COVID-19 pandemic hit and private jet ownership became increasingly attractive.
“Buying a jet has been on my mind for years, but Covid has definitely added to the equation!” Stockbridge told Reuters via email.
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He is not alone.
A shift to private flying that wealthier Americans saw as a necessary luxury during COVID-19 is now showing signs of becoming something else: an expensive but sought-after alternative to a premium ticket on a commercial flight.
Many have stayed for convenience, with analysts and industry executives saying they are seeing both more new aircraft owners and families and even small and medium-sized businesses flying privately.
Airlines accounted for 80% of premium travel in 2021, up from 90% before COVID-19, according to Alton Aviation Consultancy.
Business jets were often associated with entertainers and senior executives. They now make up a quarter of U.S. flights, about double the pre-pandemic share, according to research and consultancy WINGX.
And consultancy McKinsey & Company estimated that before the pandemic, only 10% of those who could afford to travel privately did so.
The private flight covers a whole range of transport. For some, like Stockbridge, that means owning a private plane. Other services include charter flight operators that sell either per seat or the entire aircraft, as well as services that sell fractions or shares of jets.
This all has a cost.
Stockbridge took delivery this month of a Cessna Citation M2 Gen2, a light jet made by Textron (TXT.N), which it says can turn travel to its out-of-state businesses into a day trip. The plane, which seats up to seven people, costs $5.85 million.
Stockbridge was clear on the business benefits. “Our out-of-state work drives the need for a private jet, distance and time to get to work is critical.”
“Yes, we are still flying commercial, but much less frequent…probably 10% commercial and 90% jet/charter,” he said.
Charters and other private jet services may be cheaper than owning a plane, but they still have gold-plated prices.
Booking a Gulfstream G280 with nine passenger seats for a one-way New York-Miami flight costs $18,100, according to Jettly, a charter booking platform. That compares to the average cost of a one-way business class New York-Miami ticket of $421, before taxes, according to data from airline analytics firm Cirium for January.
Even so, for many, price is not a deterrent.
“I think the people we see going from commercial aren’t coming back to commercial,” said Jamie Walker, chief executive of US-based Jet Linx, which manages planes and operates private flights through a jet card-like program. “. .
Jet Linx charges a $25,000 membership fee plus a per-flight fee, according to its website.
The subscription-based Wheels Up Experience (UP.N) said its service costs members $80,000 a year.
Jet Linx saw jet card sales jump 40% last year compared to 2019, Walker said.
Other operators are also seeing gains.
“We always see new entrants continue to come into the market,” said Megan Wolf, chief operating officer at Flexjet, a global provider of fractional ownership jets.
Despite a slight increase in the supply of pre-owned business jets, the market remains robust, with companies like Jet Linx capping sales because they cannot meet demand.
The boom is benefiting planners like Textron, General Dynamics Corp’s Gulfstream (GD.N) and Bombardier (BBDb.TO).
Textron reported quarterly results last week that beat estimates, signaling that an expected stabilization in business jet demand has yet to occur.
“If anything, demand has accelerated,” said Vertical Research Partners analyst Robert Stallard.
Private aviation traffic in the United States is up about 15% from its 2019 levels, while airline traffic remains down about 13%, according to data from the tracking website. FlightAware flights.
Analysts expect a rebound in commercial flights to eventually attract some wealthy travelers to scheduled airlines. But there are signs that some of the shift to private jets could be permanent, especially on shorter US flights.
Not only are major carriers pulling out of these routes due to pilot shortages, but the flights are comparatively cheaper than using private jets for overseas travel.
The trend is not lost on major airlines.
Delta Air Lines (DAL.N), the third largest US airline by fleet size, owns a 20% stake in Wheels Up.
Delta, like other US carriers, is seeing demand return. Its revenue from higher-yielding premium cabins reached 77% of the pre-pandemic level in the first quarter, from 27% a year ago. And Atlanta-based Delta sees stronger demand from higher-earning leisure travelers, accounting for about 10% of business trips that may not return.
Ed Bastian, Delta’s chief executive, acknowledged the rise of private flying, but said many of those passengers were also flying for business.
“I don’t think it took a lot of traffic off our plane – some, yes,” Bastian said in an interview.
Some competitors in the private jet sphere see things differently.
Jettly saw flight demand more than triple from December 2019 to December 2021, with more than a quarter of estimated demand coming from passengers who previously flew business class, said Toronto-based airline chief Justin Crabbe.
“Some of them are jumping to the annoyance of the airlines,” he said.
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Reporting by Allison Lampert in Montreal and Rajesh Kumar Singh in Chicago; Editing by Leslie Adler
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