Europe’s business aviation activity so far is lagging behind the recovery pace witnessed in other regions, specifically compared to North America, but the gap is likely to narrow in the second half of this year, analysts predict.
“What we typically see is that Europe is a couple of months behind North America in terms of overall market recovery,” said Travis Kuhn, the v-p of market intelligence at Argus International. North America recorded gains exceeding 2019 levels in both March and April— business aviation logged 266,585 flights in the U.S., Canada, and the Caribbean in March, 33 more than in March 2019, and completed 262,277 flights in April, 359 more than in April 2019, according to Argus TraqPak data.
“In Europe, I expect August to be the first month that breaks through the 2019 numbers," meaning business aviation movements, he said. "August 2020 was a strong month in Europe. It marked the first growth spot in terms of year-on-year growth since the pandemic began and activity actually exceeded activity levels of August 2019. I expect August 2021 to be equally strong." Recovery to pre-pandemic business aviation flight activity in Europe could even be as early as July, Kuhn added.
The positive trajectory assumes no new spikes in Covid-19 cases and the lifting of travel restrictions as vaccination programs expand across the region. “There is a move in a positive direction on that,” according to Kuhn.
Several European countries have announced inoculated travelers would be welcome to visit quarantine-free—such as Italy from mid-May—and the EU is expected to roll out this month an EU-wide Covid-19 certificate attesting that a person has been vaccinated against coronavirus, received a recent negative test result, or recovered from the disease. The system—which will be valid in the bloc’s 27 member states and open for Iceland, Liechtenstein, Norway, and Switzerland—aims to reinstate free movement inside the region and revive the beleaguered tourism industry. The UK has also allowed some international travel starting May 17.
“There is a great deal of pent-up demand and if that pent-up demand is released, then there will be a surge of business aviation activity,” said Richard Koe, managing director of Hamburg, Germany-based market intelligence provider WingX Advance. “It’s not a matter of if. It is a matter of when,” he added, pointing out that business aviation in Europe is heavily leisure-oriented in summer. In fact, up to 60 to 70 percent of European business aviation traffic is leisure-related in summer.
“So it is quite critical that travel restrictions get lifted sooner rather than later,” Koe stressed. The comeback of business aviation flying will be “pretty strong” in the second half of the year, he contended. Koe predicts a 30 to 50 percent increase of activity year-over-year but a shortfall of 15 to 20 percent versus 2019 levels. “That is a lot less good than in other parts of the world. We think that in North America there is a good chance that in the next six months pre-pandemic activity will be pretty much completely recovered.”
The recovery path to pre-Covid levels will be uneven across the region, observed Koe. He predicts UK activity will be “at least” 35 percent less in the second half of the year compared to where it was in the same period in 2019 owing to Brexit and the government's reluctance to ease international travel bans despite high vaccination levels. “The UK will be right at the back of the pack, which is somewhat ironic and kind of undermines the argument that vaccine programs will lead to [air travel] recovery.”
An Argus TraqPak forecast calls for a 3.3 percent increase in business jet and turboprop flights in Europe in August compared to the same period in 2019. Growth is expected to slow down in September due to the seasonality of activity in the region, resulting in a 4 percent decline from September 2019 but still a 6.1 percent year-over-year gain. For October, November, and December, Argus’s outlook calls for 0.6 percent, 2.4 percent, and 0.4 percent gains over the same respective months in 2019.
Kuhn believes that flight activity in the second half of the year in Europe will come in about 3.1 percent down versus the second half in 2019. Meanwhile, he foresees North American business aviation flying to climb 2.5 percent in the second half versus the last six months of 2019.
“The top end, the large-cabin international operations are still heavily suppressed,” explained Kuhn. In the first four months of the year, large-cabin activity was down 32.3 percent from the same period in 2019, while flights operated with turboprops and light jets were down only 19 percent and 18.6 percent, respectively.
“We are observing a similar pattern in Europe as we have seen in the U.S.—a lot more short-haul domestic and regional travel and a lack of long-haul flying international flying," he said. "While the large-cabin segment will probably improve throughout the summer, I still expect a double-digit decline in activity in the next few months compared to 2019.”
The EU in March last year closed its external borders as a measure to contain the further spread of the virus within the bloc, halting nearly all intercontinental traffic. Brussels in early May this year recommended easing restrictions on non-essential travelers from outside the EU and allowing entry into the bloc for foreign citizens and non-residents who are fully vaccinated or coming from countries with a so-called “good epidemiological situation.”
At press time, member states had not yet endorsed the proposal, and travel into the EU was allowed from only eight countries—Australia, Israel, New Zealand, Rwanda, Singapore, South Korea, Thailand, and China (subject to confirmation of reciprocity).
Long-range, large-cabin business jets are definitely still less active than before the pandemic, Koe confirmed. “Interestingly, that segment is seeing a lot of demand in the global aircraft transaction market from very wealthy people who have not been in the market before the pandemic,” he noted.
Flying in a controlled environment, away from crowded airports and large commercial aircraft, has become more of a theme, according to Koe. “A private jet is perfectly curated, all the complications are effectively managed by expert brokers, who even if restrictions are in place have a way of handling that.”