The government has dropped the ball: Former Air Canada official on Pearson airport delays
Three years ago, Chris Nowrouzi’s private charter airline served mainly ultra-wealthy leisure travellers and the upper echelons of the corporate world.
Now, 27 months into a global pandemic that closed borders and battered airlines, his Toronto-based FlyGTA caters to a broader swath of families and groups wary of the health risks and airport hassle of commercial air travel — and who have cash to spare.
“After the pandemic definitely we saw an increase of numbers all across the board,” said Nowrouzi, the company’s CEO and co-owner. “And the major increase that we've seen is families.”
Aiming to more than double its seven-plane fleet over the next few years, FlyGTA is now rolling out service to 20-plus destinations with scheduled charter flights — nearly half in Florida or the Caribbean. Customers can sign up as a group and jet off to West Palm Beach from Toronto for about $25,000 one-way, taxes and fees included — or $3,125 per person in a group of eight, the maximum capacity. That compares to Air Canada fares that currently range from $1,260 to $3,620 for the same trip in a business-class seat in July.
Amid scenes of daily frustration at Canadian airports, FlyGTA is part of a swelling sector of fleet operators and producers that hope to transform a COVID-19-era trend toward mile-high comfort into a long-term upswing for private flight.
While carriers have struggled since March 2020, use of business jets rose by 23 per cent in the United States and 53 per cent in Europe last quarter compared with a year earlier, according to the U.S. Federal Aviation Administration and Eurocontrol. Those leaps build on large increases in 2021.
Flight delays and cancellations, wariness of potential COVID exposure and surging wealth among the ultra-rich — the world’s 2,755 billionaires saw their combined wealth rise by US$5 trillion since March 2021, a January report from Oxfam International says — have helped drive demand for private aircraft.
The taste for luxury has seen buyers snap up used business jets as well, leaving the total number for sale at 3.1 per cent of the worldwide fleet as of late February, its lowest level in more than 25 years, according to market data firm Jetnet IQ — and making new products a likelier option, which bodes well for private plane makers like Bombardier Inc.
The Montreal-based company increased its backlog of business aircraft orders by 11 per cent to US$13.5 billion in its first quarter. The "strong bookings" reflect "continued strengthening in the private jet market coming out of the pandemic with activity levels now exceeding 2019," ATB Capital Markets analyst Chris Murray said in a note to clients last month.
Meanwhile airlines captured just 80 per cent of premium travel last year, down from 90 per cent before the pandemic, according to Alton Aviation Consultancy managing director Umang Gupta, indicating private travel now accounts for a larger slice of the market.
“It's a very niche market. But the niche seems to be creeping down the income scales, where you have a lot more options today,” said John Gradek, head of McGill University's aviation management program.
“If you're booking a seat from Toronto to Vancouver on Air Canada on business class, and it's $3,000 or $4,000, you get six or seven of your buddies together to fly and it's cheaper to fly on a private jet than it is on a commercial airliner.”
The growing array of purchase options includes charter, "jet card" loyalty-style programs, full ownership and “fractional ownership.”
Charter flights involve hiring a plane and crew for a custom trip. Jet card programs, which function like a premium charter membership, see customers pay in advance for the privilege of a fixed hourly rate and guaranteed availability, with dozens of companies serving North America.
Full ownership refers to an outright plane purchase by a corporation or individual. And fractional ownership means buying a share of a plane under a multi-year deal that covers costs like crew wages and maintenance, on top of an hourly rate for time on board.
Companies such as Calgary-based AirSprint, Mississauga, Ont.-based Jet-Share and HondaJet’s newly formed Jet It Canada all sell fractional ownership.
In 2020, the relatively affordable fractional and charter flights made up an unprecedented majority of private flight hours in North America, overtaking full ownership, according to an Argus International business aviation report.
Meanwhile, total business jet flight activity surged past 2020 levels by 41 per cent last year and topped pre-pandemic levels by 7.2 per cent.
As well as accessibility, health concerns remain top of mind for many amid the pandemic. “We are hearing that some (corporate) boards are asking their directors to fly private for health reasons,” said Helane Becker, an analyst for banking firm Cowen.
Then there’s the pure convenience and — alluring decadence — of private flight.
“There is no wait time to get on the aircraft,” said Nowrouzi. “Your passports are checked and you get right on the aircraft and you depart.
“On your arrival, customs agents come out to the aircraft,” he added, building a case for the revival of air travel’s bygone glamour.
“Back in the ’70s, when commercial flying was new, people would fly for the experience and the destination. But somewhere along the way the experience kind of went away.”
Even the old-fashioned route of buying a jet outright is more feasible for corporations, leasing companies and the odd individual, with the list price for new HondaJet and Cessna jets starting between US$3 million and US$4 million.
“Those airplanes will fly Montreal-Miami nonstop,” Gradek said.
A couple of clouds mark the horizon.
One is the price of jet fuel, which is poised to remain high this year in lockstep with oil costs.
“And then there's the Greta Thunberg factor” — a growing awareness of aviation’s carbon footprint and the attendant “flygskam,” Swedish for flight shame, which pressures would-be flyers to think twice about heading skyward — Gradek said.
But with the pandemic and airport chaos raging, going private may seem all the easier to rationalize, said former Air Canada chief operating officer Duncan Dee.
“For folks that can afford it — high net worth individuals and corporate clients — that becomes an alternative that is much more justifiable.”