Like every other industry, private aviation experienced turbulence as a result of the far-reaching impact of the pandemic, and XO and our parent company Vista Global were at the center of it all. We responded with extraordinary speed and dedication: from creating entirely new hygiene protocols to supporting our existing and new members as they sought to return home to safety, to providing opportunities for critical medical supplies to get to those in need.
This year, as vaccine distribution rolls out across the world – asymmetrically, both within countries and across countries – the world will face a different set of opportunities and challenges. Private aviation will continue to be sensitive to these macro forces, and here at XO, our industry experts have identified these key trends for 2021:
While business and leisure travel will slowly come back – with leisure leading the way – the commercial flying experience will continue to be compromised, and many will be reluctant to re-enter the market. This was a core driver of our unprecedented 2020 unique growth. For example, in December, we saw an extraordinary 378% increase in RISE Memberships, largely due to an influx of first-time private flyers.
We expect the accelerative growth of private aviation to continue, as only 71% of those who can afford this life-enhancing solution are currently taking advantage of it. Many who never considered it did their homework and were pleasantly surprised by its affordability, and it will now become a permanent part of their lives. We also predict that the pent-up energy for leisure travel will be a catalyst for the continued strength of the market, as will our new work-from-home reality. This fundamental change will mean that fewer, but more important, business meetings – attended by fewer people – will also make private aviation a new everyday choice.
Last year, there were 194 IPOs, which was, strikingly, their best year – despite the pandemic – since 2014.
There were also 200 SPACs, a new form of “blank check” public offering. We predict there will be no slowing down of this market, creating a new generation of millionaires and billionaires in 2021, for whom the "P" in IPO will soon also stand for "private.”
Now that we are accustomed to remote working, you can expect to see extended vacations with built-in timing for work-related activities. The blurring of our personal and work lives will continue, and this will be a much-needed boost to the hospitality industry, resulting in longer stays and the growth of longer-format, Airbnb-style solutions. Private flying will also benefit, as longer trips will amortize the cost.
With dramatic cutbacks in commercial aviation negatively impacting over 75 cities/airports in populated areas, we predict these now under-served cities will be offering tax breaks and other incentives, such as reduced landing fees - or even bonuses - for increased service. It's certainly an economic burden, but these small cities – many of whom have a handful of large employers with far-flung customers - can't afford to have these companies move on to better-served aviation pastures. Typical of cities under pressure is Roswell, New Mexico, whose mayor plaintively said, “We’re a long way from anywhere else.”
As the flying taxi industry matures - Uber just sold its R&D operation to Joby, a secretive company that raised $100M from Toyota, Intel, and JetBlue - we expect to see partnerships between private aviation and these "last mile" solutions announced. After all, getting off a private jet and into a flying taxi to speed you downtown, rather than fighting traffic in a car, is the productivity solution of tomorrow.
This is just one of many examples of how the pandemic will accelerate changes in urban mobility; as the EU said in a recent report, we will see a major shift (which began pre-virus) to “towns built for people, not for cars.” It will then become more challenging for people to get to urban centers via traditional methods.
XO has seen and led collaborations between high-end luxury resorts and private aviation. These will accelerate in 2021, as more of these resorts will be looking to meet the demands of their ultra-sophisticated guests with seamless, end-to-end solutions. The knowledge that an entire trip is elevated by similar standards of safety and security is part of the overall trend of “stress suppression” that we have seen in many categories, as a result of the pandemic.
In 2021, the most affluent consumers will be looking to plan their travel for either later this year or early 2022. Advance planning is a signal of long-term confidence, while last-minute travel reflects spontaneity based on day-by-day reactions to a changing health context. XO’s data shows that trips booked within seven days of departure were around 51% for 2019, increasing to around 54% for 2020. In 2021, XO predicts a continued tilt toward longer-term planning, as confidence grows.
Travelers eager for a change of scenery will continue to look towards local getaways, exploring close-by worlds and short-duration flights to domestic destinations. While we predict a resurgence in international travel, these “compressed radius” trips will experience particular growth. They will include more isolated rural/rustic outdoor destinations with less exposure to risk, instead of larger metropolitan areas – the traditional leisure destinations.
The cutback in commercial flights to many of these small-town destinations noted earlier will also be a boon to private aviation in the leisure market.
Rather than splurge on traditional luxury goods that don’t improve one’s quality of life, reduce anxiety, or increase productivity, many high-net-worth individuals will strategically reallocate their spending to private aviation. It’s part of the larger trend of experiences being considered more important than physical objects.
As 2021 unfolds, we will continue monitoring changes as we see them and capture them in our new PADAR database. Short for Private Aviation Data Resource, PADAR is an innovative effort to provide an information-rich analytic resource for all those interested in the state of the industry.
What are your thoughts about what 2021 holds? We’d love to hear from you. And if you are considering becoming an XO Member, our dedicated Aviation Advisors are ready to help you understand what a difference we can make in your life. We wish you and your loved ones all the best for 2021.
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XO Global LLC is not a direct air carrier and does not operate any aircraft. All flights will be operated by properly licensed US or foreign air carriers. Membership is subject to the terms of the applicable Access Membership Agreement. All services are subject to the terms and conditions available at flyxo.com/legal/. Fla. Seller of Travel Ref. No. ST42114.