Future private jet trends and challenges in South America
While projections for the business aviation market might be uncertain in some established economies around the globe for 2018 and beyond, developing regions such as South America, bolstered in part by Brazil and its major private jet pool and above average infrastructure; Africa with Nigeria at the helm, considered as the fastest growing private jet hub in the world, and China, propelled by the growing number of wealthy businessman, have all something in common: companies and top executives are beginning to understand the value of flying private; not because of the privacy and luxury, but thanks to the cost-efficiency involved in the process.
This shift in the way of understanding the real benefit of business aviation has open corporate budgets to the point of considering private flight as part of the yearly costs; a debate that may be well underway in developed economies, but has yet to gel entirely in the aforementioned emerging markets. The Middle East private jet market is in a category of its own, registering continued growth on one side, but in the other with the need to account for the fierce competition imposed by a handful of commercial airlines offering a luxury first-class experience.
South America, meanwhile, has other variables in the table. Although a continuously increasing market, the political shifts, which bring uncertainty and the incapacity for long-term projections, alongside shaky aeronautical authorities have somewhat decreased the overall potential of this region’s overall potential. Although the previous hasn’t stopped major manufacturers to settle in. For starters, Honda Aircraft recently chose Hangar Uno in Argentina as the official sales representative in the region, Aerocardal in Chile is the official sales partner for Gulfstream Aerospace, Cirrus Aircraft and Pilatus Aircraft, and Brazil has a producer of its own in the world-renowned Embraer Executive Jets brand.
Diversification, turboprops and technology
The case of Aerocardal is quite special because it has gambled on diversification to gain market share, accounting today for over 30% of all executive charter flights in the country. They offer the complete private jet experience, owning a fleet of jets and turboprops and a FBO. The company based in Santiago International Airport has fixed-term contracts with multinational corporations for the transportation of executives, also offering the standard on demand charter service. Furthermore, it provides maintenance services for its fleet clients, which include U.S. registered aircraft; a service approved by the he FAA.
“We diversify in order not to depend on the shifting economy. When you have more than one business line, you can manage a drop in one area, while trying to enhance the production in the other. If you add the excessive dependency of the local economy on the price of copper and projects surrounding the commodity, then as a private jet airline you are left with the challenge to adapt and explore new options. Keeping planes on the ground will never be an option, states Ricardo Real, CEO of Aerocardal.
The rise of the turboprop aircraft is also a trend to account for, especially for shorter distances that don’t justify the expenses that come with the charter of a jet. Overall, the Pilatus PC-12 is the perfect fit for the region, offering a cost-efficient option without compromising general comfort and privacy. It also has the capability to land in multiple types of runways and adapt to the demands of the air medical and freight lines, apart from the standard executive use.
Finally, the use of technology and mobile apps for booking is not very common in South America. Brazil’s Flapper app is one of the few local services that allows to charter a flight on the go, without sending an email or making a call to the sales team. A ‘must’ for charter providers in developed countries, it’s just not accounted as a potential barrier for international or tech-savvy clients. But it is. This must change if private jet providers want to gain ground with new types of customers; the occasional traveller and the first-class frequent flyer thinking of making the shift to private aviation.
The future is promising for the business aviation market in South America, but for that potential to turn into long-term performance, some changes need to be accomplished; adapting to today’s customer’s behaviour, more diversification and less excuses. “Every industry has its challenges. Each region has its downfalls. The recipe is to maximize what you do well to keep the fleet safely airborne”, concludes Real from Aerocardal.
Article written by Felipe Reisch, Communications Manager of Aerocardal.