Wealthy Jump to Private Jets to Duck Airlines and Cut Virus Risk
(Bloomberg) -- Growing fear over coronavirus is battering commercial airline stocks, but private jet operators are seeing a spike in demand as well-heeled travelers look to minimize their public exposure and find alternatives to suspended flights.
“There’s undoubtedly been a rise in demand for short-notice, on-demand charter,” said Adam Twidell, chief executive officer of jet charter provider PrivateFly. “We’ve had a very significant number of inquiries, for group evacuations, and from corporates and individuals.”
Requests have included a decontamination team looking for transport within Asia and a family traveling to Bali from Hong Kong who wanted to avoid exposure to other people on a commercial flight. Charter company Victor recently had a film studio ask about flying 50 people to Los Angeles from Tokyo to limit interaction with other travelers.
Such inquiries are becoming more common after the virus, which first emerged in Central China in December, has since spread to six continents, operators say.
“The number of private jet requests have gone up -- especially on long-haul flights,” said Richard Lewis, U.S. president of Insignia Group, which organizes travel for wealthy clients. “They’re not willing to share the cabin with other people.”
It’s not cheap, but can be relatively competitive with luxury commercial travel.
The cost of flying round-trip from New York to London on a 12-seat Gulfstream IV is about $140,000, although squeezing that many people onboard removes some of the comfort factor. That compares with $10,000 for a first-class ticket flying commercial, complete with a lie-flat bed.
For individuals and companies willing to pay extra, it’s a way to minimize the risk of infection.
JetSet Group, a New York-based charter company that books roughly 150 flights a month, has seen business spike about 25% in the last few weeks. Fear of the virus appears to be driving the demand, said founder and CEO Steve Orfali, based on customer feedback,.
Many of his clients have medium-sized business and have to travel to see factories or stores. Others are considering it for family vacations.
“When they’re going on a personal trip, they don’t want to expose their family, so they’re anteing up and paying for a private jet rather than first-class tickets for everyone and risking it,” he said.
People who don’t normally fly private are also calling. Orfali said he hopes they’ll become regular clients after experiencing the convenience and time savings of such travel.
Most operators realize the extra demand generated from the coronavirus may be temporary, especially if the outbreak continues to pummel stocks.
“Our clients are people who are heavily invested in the markets,” said Richard Zaher, founder and CEO of Paramount Business Jets in Leesburg, Virginia. “When they’re losing millions of dollars, they’re not going to necessarily want to go on vacation to a place where they’re going to spend a lot of money and also possibly expose themselves to people who may carry the virus.”
“This is not good for private aviation,” he added.
PrivateFly’s Twidell shares that concern.
“Any short-term gain is obviously balanced with longer-term concerns and challenges, including the impact on the global economy,” he said. “Even now, while we’re seeing short-term additional demand, other clients are changing or canceling their travel plans.”
Authorities are stepping up measures to stop the spread of a disease that’s caused more than 2,800 deaths worldwide. Japanese schools will shut for about a month, while Saudi Arabia has halted religious pilgrimages that draw millions to cities including Mecca and Medina. In Monaco, the government has asked employees returning from risk areas to quarantine themselves for two weeks and the Israeli government has requested that citizens reconsider plans to travel abroad.
Commercial airlines have been among the hardest hit. American Airlines Group Inc., United Airlines Holdings Inc. and Delta Air Lines Inc. have lost about a quarter of their combined market value since the start of the year with analysts warning that the drubbing may get worse as the disease curbs demand for travel.
All three have suspended direct flights to mainland China through April, severing what had become a key business route. British Airways Plc and Air France-KLM have enacted similar restrictions. On Friday, United, the biggest U.S. carrier on trans-Pacific routes, pared more service to Asia, including canceling flights to Tokyo’s Narita Airport from Los Angeles and Chicago.
Travelers who still need to get around are seeking out private jet operators to fill the void of suspended flights.
Vimana Private Jets, which charters trips for the uber-wealthy, has helped clients with business meetings in Beijing in recent weeks. The jets don’t typically stay long on the ground in China. Instead they fly to Vietnam while they wait for the return leg to mitigate the risk of infection to crew.
Still, the logistics of flying into high-risk virus areas is becoming increasingly complicated, said PrivateFly’s Twidell. For one, it’s often hard to find the aircraft or sufficient crew to fill all the requests.
“Operational protocols are changing daily,” Twidell said. “It’s a very fluid situation.”
Paramount Business Jets is getting a lot of requests to fly people out of Asia, Zaher said. It’s not easy. There are difficulties finding available aircraft and complying with new restrictions such as making sure passengers who have visited China have been out of the country and observed for 14 days without showing symptoms.
“Our clients are requesting aircraft that haven’t flown to mainline China, for example, and are asking for a crew that has been temperature-checked,” said Zaher, whose company arranges about 500 flights a year.
Planes and their passengers still must respect any quarantined areas, and must undergo additional screening procedures for trips to and from risk areas.
Flights coming into the U.K. from such locations are subject to inspections by port authorities, whose powers include “detention of the aircraft, passengers, stores, equipment and cargo” if they constitute a danger to public health, according to the Association of Port Health Authorities’ website.
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