MONTREAL — Three years ago, Chris Nowrouzi’s private charter airline primarily served the very affluent leisure traveler and upper echelon of business.
Now, 27 months after a global pandemic that has closed borders and battered airlines, its Toronto-based FlyGTA is targeting a broader crowd of families and groups fearful of the health risks and airport hassles of commercial air travel — and those over cash feature.
“After the pandemic, we’ve definitely seen an increase in numbers across the board,” said Nowrouzi, the company’s CEO and co-owner. “And the biggest increase that we’ve seen is families.”
With a goal of more than doubling its fleet of seven aircraft over the next few years, FlyGTA is now launching flights to over 20 destinations with scheduled charters – almost half of them in Florida or the Caribbean. Customers can sign up as a group and fly to West Palm Beach from Toronto for about $25,000 each way, taxes and fees included — or $3,125 per person in a group of eight, the maximum capacity. In comparison, Air Canada fares currently range from $1,260 to $3,620 for the same trip in a business class seat in July.
Amid daily frustration at Canadian airports, FlyGTA is part of a growing sector of fleet operators and manufacturers hoping to turn a COVID-19-era trend toward mile-high comfort into a long-term surge in private flying.
While airlines have been struggling since March 2020, business jet usage rose 23 percent in the US and 53 percent in Europe in the most recent quarter compared to a year earlier, according to the US Federal Aviation Administration and Eurocontrol. These jumps build on big increases in 2021.
Flight delays and cancellations, caution about potential COVID exposure and rising wealth for the ultra-rich – the world’s 2,755 billionaires have seen their combined wealth rise by $5 trillion since March 2021, according to a January report by Oxfam International helped increase demand for private aircraft.
The taste for luxury has prompted buyers to also buy used business jets, with the total number of aircraft for sale at the end of February standing at 3.1 percent of the global fleet, the lowest in more than 25 years, according to the market data company Jetnet IQ – and making new products a more likely option, which bodes well for private aircraft manufacturers like Bombardier Inc.
The Montreal-based company increased its backlog of business jet orders by 11 percent to $13.5 billion in the first quarter. The “strong bookings” reflect “a continued strengthening of the private jet market post-pandemic, with activity levels above 2019,” Chris Murray, an analyst at ATB Capital Markets, said in a note to clients last month.
Airlines captured just 80 percent of premium travel last year, down from 90 percent before the pandemic, according to Umang Gupta, managing director of Alton Aviation Consultancy, noting that leisure travel now accounts for a larger share of the market.
“It’s a very niche market. But the niche seems to be moving down the income scales where you have a lot more options today,” said John Gradek, director of McGill University’s aviation management program.
“If you book a Toronto to Vancouver seat on Air Canada business class and it’s $3,000 or $4,000, you get six or seven of your friends to fly and it’s cheaper to fly on a private jet than with an airliner.”
The growing range of purchase options includes charter, “Jet Card” loyalty programs, full ownership and “fractional ownership”.
With charter flights, an aircraft and crew are rented for an individual trip. With Jet card programs, which operate like a premium charter membership, customers pay upfront for the privilege of a fixed hourly rate and guaranteed availability, with dozens of companies serving North America.
Outright ownership refers to the outright purchase of an aircraft by a company or individual. And fractional ownership means buying a share of an aircraft under a multi-year contract that covers costs like crew wages and maintenance, in addition to an hourly rate for time on board.
Companies like Calgary-based AirSprint, Mississauga, Ontario-based Jet-Share and HondaJet’s newly formed Jet It Canada are all selling fractional ownership.
In 2020, relatively affordable fractional and charter flights accounted for an unprecedented majority of private flight hours in North America, overtaking full ownership, according to a report from Argus International’s business aviation.
Meanwhile, total business jet flight activity rose 41 percent last year from 2020 levels, surpassing pre-pandemic levels by 7.2 percent.
Along with accessibility, health concerns remain a priority for many amid the pandemic. “We are hearing that some (corporate) boards are asking their directors to fly privately for health reasons,” said Helane Becker, an analyst at banking firm Cowen.
Then there’s the sheer convenience and—tempting decadence—of a private flight.
“There is no waiting time to board the plane,” Nowrouzi said. “Your passports are checked and you get straight on the plane and you take off.
“When you arrive, customs agents come to the plane,” he added, making the case for a revival of the bygone glamor of air travel.
“In the ’70s, when commercial flying was new, people flew for experience and purpose. But somewhere along the way, the experience kind of disappeared.”
Even the old-fashioned route of buying a jet outright is becoming more viable for businesses, leasing companies, and the odd individual, as list prices for new HondaJet and Cessna jets start between $3 million and $4 million.
“These planes will fly non-stop from Montreal to Miami,” Gradek said.
A few clouds mark the horizon.
One of these is the price of kerosene, which is expected to remain high this year in sync with oil costs.
“And then there’s the Greta Thunberg factor” – a growing awareness of aviation’s carbon footprint and the associated “Flygskam”, Swedish for flight shame, which urges would-be aviators to think twice about flying in fly the sky – said Gradek.
But in the face of the pandemic and airport chaos, it seems all the easier to streamline going into the private sector, said former Air Canada chief operating officer Duncan Dee.
“For people who can afford it — high net worth individuals and corporate clients — this becomes a much more viable alternative.”
This report from The Canadian Press was first published on June 26, 2022.
Company in this story: (TSX:BBD.B)
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