“Some jet operators or competitors seem to live in Cuckoo Land by publishing over optimistic press releases, podcasts and articles,” warns LunaJets’ MD Alain Leboursier.
Their over optimism is contributing to a perfect storm brewing in business aviation, he said. Continuing uncertainty caused by new quarantines and lock-downs, weak corporate demand, structural overcapacity and the financial leverage of the industry all threaten to come together with devastating consequences for the sector.
Picking up the theme LunaJets CEO, Eymeric Segard told Corporate Jet Investor that the company’s recent report set out a true picture of the challenges facing business aviation.
“A lot of recent articles lead to the perception that our industry is profiting from the travel crisis when this is not true. Because of our size in the market, our 100% neutrality – not owned any anyone, no legal partnerships, and as we don’t need to raise capital to survive this storm – there is no need to protect our image, we give an independent perspective of the reality.” said Segard.
The company warns that September will bring a “back-to-reality” moment for the segment. Summer’s travel restrictions and commercial airline disruption boosted the level of new clients entering the market – mainly on short intercontinental flights. Despite some unexpected recovery, Lunajets ’Private Jet division is still down 18% year-to-date in volume.
The strong growth in the first quarter (+30%) due to the March pre-lockdown demand, followed by a total collapse in the second quarter (-70%) due to the travel restrictions, was not compensated by the unfolding third quarter recovery. The fourth quarter already looks bleak for corporate flight demand, according to the operator.
Leboursier added: “The corporate market demand, which represents 70% of our business from September to Christmas, is weak despite the best deals ever from same-day return to trans-Atlantic flights”
“The whole industry has never recovered from 2009. Regarding our private jet charter segment only, and well before the Covid-19 crisis, the collapse of Jet Smarter and the administration of Alyssum, proved that raising and burning cash at smoking valuation is not a sustainable business model in this luxury industry,” concluded Leboursier.
