Private jet travel declines after pandemic-driven surge

The spike in demand driven by COVID-related travel concerns sparked a flood of activity in the charter industry to meet customers' needs. But with the time lag associated with acquisition and pilot hiring needed to meet booming demand, those who overleveraged their finances are facing dire consequences.

Doug Gollan, founder and editor of Private Jet Card Comparisons, told CNBC, “The smaller operators with three, four or five jets, they’re the ones hurting.” But even large operators, notably Wheels Up, have faced financial headwinds as demand has waned during this year’s travel season. And higher prices driven by earlier high demand took a toll.

Gollan continued, “Prices are about 20% higher than they were in 2019. A lot of people are saying, ‘I spent $300,000 or $350,000 on flights last year; I’m not going to spend $400,000 or $450,000 this year.’ Even if they have the money, they have a dollar figure in their head they don’t want to go over.”

But some within the industry don’t see the shakeout as all negative. Private aviation is a highly cyclical industry; wild swings in either direction can be difficult to navigate. Travis Kuhn, Senior VP of Software at Argus said of the downturn: “The industry is on a more sustainable long-term path. It’s not a bad thing that it’s cooled down a bit.”