The private jet industry wants its own coronavirus bailout
This story has been updated with a response from the Alliance for Aviation Across America.
As Congress considers a bailout package worth more than $50 billion for airlines, private luxury flight services want lawmakers to know they, too, want a piece of that money.
The National Business Aviation Association, which represents private and corporate jet companies, wrote to House and Senate leaders Friday with other industry groups asking to be included in any air-traffic relief package, comparing the airline industry’s current economic woes with those experienced after the Sept. 11, 2001 terrorist attacks.
“With the unprecedented challenges our nation is confronting, these companies are facing increasing financial uncertainty,” the letter stated. “Due to the nature of the COVID-19 pandemic, there is currently no certainty as to when economic conditions will improve, which threatens the survival and prospects of thousands of general aviation businesses. Further, the threat of potential domestic travel restrictions and locally imposed travel restrictions have the potential to cause even more significant harm to these companies as this crisis continues.”
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The letter contends the private airfare industry supports 1.2 million jobs that pay $77 billion in labor income and spurs $247 billion in “economic impact.”
Along with private passenger flights, charter airlines, including Magellan Jets, VistaJet and Wheels Up, make up a large part of air ambulance services and transplant organ transportation.
Industry groups say some of their members will not survive the economic pain brought on by the novel coronavirus without federal subsidies. They ask specifically for “medium to long-term liquidity assistance and relief from air transportation excise taxes.”
But demand for private flights is soaring, according to CNBC, which first reported on the industry’s letter. Trip volume for Magellan, it reported, is up 70 percent in the first two weeks of March than the same period in 2019; inquiries have more than quadrupled.
It reported flights on VistaJet are up 16 percent since the beginning of the year. Wheels Up said it was handling an “uptick in demand” from “individual and corporate members.”
Charter company Private Fly wrote on its company blog, “We’ve seen a significant rise in demand for short notice on-demand private jet charter, relating to the Coronavirus.”
“Inquiries are ranging from for group evacuations and repatriations from affected areas, to corporate and private individuals looking to book a private charter flight,” the company wrote. “Some following an airline cancellation, others are looking at private aircraft in order to avoid moving through large crowds at airports and airliner cabins, which have a perceived higher risk of exposure.”
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But an industry group called the Alliance for Aviation Across America called these “cherry-picked accounts from weeks back,” adding that charter operations have taken “a huge hit” as a result of the virus, with one industry trade outlet, AIN Online, reporting a nearly 47 percent drop in business aviation activity.
General aviation, charter operations and related businesses may see “thousands of layoffs and a potentially irreversible effect on businesses, economies and thousands of communities around the country that depend on these airports and aircraft for their livelihood,” said Selena Shilad, executive director of the Alliance for Aviation Across America.
Meanwhile mainline public air carriers are bracing for steep declines in travelers and preparing for potential layoffs. Compass Airlines, a regional airline that flies on contract for American Eagle and Delta Connection, told employees on Thursday that it would cease operations at the end of the month.
Delta announced Wednesday that it will cut domestic capacity back 70 percent, while United said Monday that it will slash half of its flights, according to CBS News. American Airlines planned to cut 75 percent of its international flights, Reuters reported Sunday, and expects total capacity to drop 20 to 30 percent in the next two months. All three major carriers asked employees to consider taking voluntary leave in an effort to cut costs.
“In the frankest of terms,” the Airlines for America trade group wrote in its own letter to congressional leaders, “the current economic environment is simply not sustainable. The U.S. aviation industry and our employees need immediate assistance as the current economic environment continues to devolve. Our concern is compounded by the fact that the crisis does not appear to have an end in sight.”
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“The industry does not want to furlough employees,” the letter added. “In fact, we need employees to retain their positions to be ready to lead the recovery.”
The trade group has advocated for $50 billion worth of aid for public airlines, plus another $25 billion in tax relief and loans. Airports have asked for their own $10 billion rescue package, and dozens of other industries have come hat in hand to lawmakers looking for assistance.
Private jet providers in their letter told legislators there was nothing amiss about their request, too.
“Without both near and medium to longterm relief,” the wrote, “many of these air carriers will not survive, resulting in job losses and significant disruptions to the critical services that they provide every day.”