We all know that it has been a tough few years for the aeronautics industry. First of all, the global outbreak of COVID-19 in 2020 severely impacted the business. Indeed, with health and border restrictions most of the flights were cancelled. Airline companies had to issue a lot of debt in order to survive. Now in the second part of 2022, flights are starting to resume back to usual, but the impact can still be felt.
Another macroeconomic factor that has impacted the aeronautics and airline business is the inflation. Indeed, following the COVID-19, the price of living nearly everywhere on the planet is increasing. This impacts the business tourism market as people have less money to spend to go on vacation. Finally, the war in Ukraine is also impacting the business tourism market as there are a lot of different cities in that region that are not served anymore by airline companies.
The market of business tourism is shifting slowly. Indeed, with all the complications of public and airline flights, the rise of private jets has never been more important. Indeed, with private jets you can bypass the difficulties of health restrictions and win a lot of time. Most of the business can’t afford a private jet charter obviously. However, there are alternatives such as private jet rental companies. Indeed, companies such as AEROAFFAIRES allow you to book a private jet effortlessly, at the best price and guarantee great service.
The impact of COVID-19
COVID deeply impacted the aeronautics industry. Indeed, in an official report, the International Civil Aviation Organisation (ICAO) has stated that the international passenger air traffic has decreased by 60% in 2020. It is slowly but surely getting back to its 2020 pace now in mid 2022.
The consequences of COVID-19 are drastic on this industry for business travels.
First of all, there is a big shortage of air freight as airline companies will be undersupplied for a while.
One other consequence is shortage of staff. With COVID-19 a lot of airlines had to fire employees in order to reduce costs and survive during the pandemic. This has a serious repercussion now as airlines are experiencing difficulties to recruit staff. This situation results in a longer waiting time for onboarding and registration. Some flights have to be seriously delayed or even cancelled.
Finally, the COVID also increased the ticket prices for customers. As airlines have issued more than $180 billion debt in 2020, they have to make huge revenue in order to cover the loss. Airlines are betting on the fact that people want to go on holiday more than ever and that businessmen want to have in-person meetings, thus using the plane to travel for pleasure or business.
Other key challenges for business tourism
Now in 2022 we are experiencing more challenges than the consequences of COVID-19.
We are now entering a serious inflation period and this has a huge effect on the airline and aeronautics industry. Indeed, the reverberations of this situation lead to an increase of ticket prices. People will also have less purchasing power and will maybe be less tempted to spend a lot of money on vacation in 2022. Another end result of inflation is the impact it has on new aircraft deliveries. Indeed, airline manufacturers are also hit by the crisis that is ongoing and will have problems delivering aircraft deliveries on time and at the usual prices, which represents a drastic challenge for airline companies;
Also, the war in Ukraine also has serious implications in the world, but also on the business tourism industry. Indeed , flights in the region affected by the war are heavily restricted or even impossible. For airline companies that usually operate in the region this is a huge blow. This also has an important impact on families that wish to travel to the region for holidays, family gatherings and other reasons. It also hits the businesses that operate in the region that will not be able to use the public airlines planes in order to have in-person meetings.
Furthermore, the price of gas is seriously impacting the industry. As it is the same situation for cars, the rise in price of fuel has yet again a serious impact on the final ticket price for customers for airplane tickets. For an industry that is trying to save costs by all means, it is in a very dangerous spot.
Finally, there is the environmental cause that is starting to have a huge impact. In its “cutting aviation pollution” report, WWF stated that aviation represented one of the fastest-growing greenhouse gas emissions. To put it in a better scale, if the aviation sector was represented as a country, it would be one of the top 10 carbon-pollution nations. The industry will have to undergo big changes in order to have a sustainable and environmental-focused strategy.
The main challenges for the business tourism industry in 2022 will be on how to price the flights tickets with all the elements that are impacting the industry and the world at the moment: climate awareness, inflation, wars and COVID-19.
The rise of the private jet industry
Is the rise of private jets an answer to business tourism ?
We have mentioned earlier in this article that private jet rental companies, such as AEROAFFAIRES, are becoming a serious alternative for business & leisure flights. Private jet rental organizations have seen an increase in demand over the past few months. This new and important demand is especially from first-time private jet users that are looking for a health secure, flexible and easy to use alternative to public airline companies.