In Asia, the spread of COVID-19 has affected the business jet charter industry in different ways, according to Gary Dolski, CEO of Metrojet in Hong Kong. Dolski said prices for charters are moving up because there are lots of one-way flights that require repositioning fees as well as covering the costs of crews that may be quarantined. “The demand is there, however many of the locations that one wants to fly to cannot be reached or may change on a daily basis,” Dolski told Asian Aviation.
As for deliveries, Dolski says some OEMs are halting production or slowing down completions and that could have an impact on deliveries. But, he added, “with the limited and constantly changing number of places to fly, a number of new owners are not concerned with delaying acceptance of their aircraft and in fact would prefer delaying the outflow of funds toward an asset that they cannot utilise for the intended purpose. Preowned aircraft prices are dropping so it is a good time to buy. This being said, non-distressed sellers are pulling their aircraft off market until the market bottoms out. Some high-net-worth individuals whose personal finances have been negatively impacted by the COVID impact will try and see if they can exercise an out clause in their aircraft purchase agreement after a force majeure period has passed in order not to take delivery of their aircraft.”
Dolski said owners are not moving their charter-available aircraft to different parking locations at the moment because with the spread of the virus, a safe jurisdiction today may not be safe tomorrow. He said some owners are parking their aircraft nearby where they themselves are “riding out” the virus. “A number of owners who may sporadically charter out their aircraft are pulling them from the charter market as they do not want to take the chance of having their ‘living room in the air’ infected”, he added.
One area that is staying busy is Metrojet’s maintenance, repair and overhaul (MRO) department because “a number of aircraft owners that have parked their aircraft are taking advantage of this downtime to catch up on maintenance activities so that when the skies reopen they will be able to take full advantage and catch up on business,” Dolski said.
Metrojet’s managing director for aircraft management and charter, Denzil White, added that “despite the present gloom, Metrojet sees the coronavirus as an event rather than a trend. Even if this lasts longer than predicted we will get through it and envisage a positive future for business aviation in the region.”
Business jet manufacturers, like their commercial jet counterparts, are taking a variety of steps to combat the virus to survive. Gulfstream Aerospace confirmed in late March that one of its employees at its Dallas Love Field facility contracted the virus. The company closed the facility for 14 days, and the employees who worked with or encountered the person have been asked to self-quarantine. Textron Aviation has laid off at least 875 employees and consolidated some facilities. Bombardier said it would furlough employees at its Canadian facilities because of mandates by the government to shut down “non-essential” operations to help slow the spread of the virus.