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Amid Airline Re-Set, Ensure We're Flown Into -- Not Over

Amid the ups and downs of the post-Covid airline business, one disturbing constant has settled over the ever-changing route maps: In Flyover Country, we’re still in danger of losing many of our aeronautic lifelines to one another and to the rest of the country and the world. Among other effects, countering that problem will be a big boon to private aviation.

As they contracted severely during the early days of the pandemic, U.S. airlines cut service to many small cities, especially across the heartland. Admittedly, these included some places that had been viable destinations only under what’s known as the federal Essential Air Service program, which has ensured continuous air service to small communities that wouldn’t normally see any commercial airlines.

“Middle America is going to lose regional jet service,” Craig Picken, managing director of Northstar Group, a private-aviation executive-search firm, told me. Take a midmarket city such as Lincoln, Nebraska, he said. “Regional-jet service starts to get limited, which means it gets expensive. Flight schedules don’t work.”

Or Butte, Montana. In 2019, airline flights there were subsidized under the Essential Air Service program. But during Covid, airline access reportedly got restricted, and many fliers had to drop into Bozeman, Montana, 85 miles away by car.

The Need to Visit

This is proving a special strain for the business leaders who make the economy go across our region. “The interior of the country can be extremely difficult to travel, but there’s a lot of manufacturing and heavy industry and agriculture where executives simply need to visit to pay attention to their operations,” said Sean Lancaster, vice president of Bristol Associates, a private-aircraft broker and services outfit.

One symptom of reaction will be growth in business for NetJet and other private-aviation charter services that will pick up the airlines’ slack. “Now,” Lancaster said, “companies that flew private maybe once a year will be forced to do it five or 10 times a year. The CEO of a company in middle America may charter a jet only once a year. Now, if he can’t get airline service and on a good schedule, and it may cost him a fortune, he might as well charter a jet and take a couple of people with him. Or buy an airplane.”

Such first-time corporate private-plane passengers, high-net-worth individuals, and private-company owners have helped drive a late-covid boom in business aviation.

“With the challenges that come with using commercial aviation, it’s only logical that U.S. companies are building or refurbishing their private fleets to carry executives from point A to point B as people are feeling more comfortable about having in-person meetings,” said Pavel Chudzicki, aviation partner at the Miller Canfield law firm.

Business Aviation Fills the Gap

All of these dynamics are boosting private-aviation activity to levels previously unseen, in some ways. Demand for seats on small aircraft was so robust in the second quarter that NetJets was forced to stop selling jet cards, shares or leases on entry-level Citation XLS and Phenom 300 jets – the first time it had to suspend availability in 57 years in business.

“All signs point to the fourth quarter showing not enough aircraft to cover the charter demand around the country,” said Nick Tarascio, CEO of Ventura Air Services. “That’s never happened before.”

Meanwhile, aircraft sales, especially of pre-owned models, are recovering apace. Citation made 410 five-passenger, entry-level CJs beginning 20 years ago and now “today there are maybe only 10 for sale” total, said Janine Ianarelli, president of aircraft broker Par Avion.

Meanwhile, prices of those scarce used craft have appreciated to a range of $3 million to nearly $5 million from just over $2 million to about $4.5 million in 2019.

Interestingly, some handicappers believe the fastest-growing market for new planes post-covid, proportionally, will be long-range jets, as more of the wealthy hunt for distant and remote locations to escape the turmoil of the coronavirus.

And where are they going to go? Flyover Country.


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