Abu Dhabi's Royal Jet to recover 80% of pre-pandemic flight movements by year-end, CEO says

Exclusive: Premium charter-flight operator is considering a new order of business jets to replace its existing fleet

Abu Dhabi's premium private jet operator Royal Jet expects to recover 75 to to 80 per cent of its pre-pandemic flight movements by the end of the year, driven by faster vaccinations and pent-up demand from VVIPs.

The company, which is currently operating at 60 per cent of its pre-crisis levels, could rebound even faster by this summer, depending on how quickly travel restrictions are eased and if traveller confidence improves, Rob DiCastri, Royal Jet's chief executive, told The National on Wednesday.

"Traffic is coming back faster for us than for [commercial] airlines, especially in this region," he said. "In private aviation we're very lucky that our industry is naturally more comfortable for flying at this time. There's a private VIP terminal, there's hundreds less touch points to go through. Flying on a private jet with only people who you know have been vaccinated and tested, it's a more comfortable way to travel for your safety and peace of mind."

Charter travel has fared comparatively better than scheduled airlines during the pandemic. In the first 10 days of June, global business aviation activity was up 49 per cent compared to the same period in June 2020 and was 5.3 per cent below the corresponding period in June 2019, according to data research company WingX. By contrast, scheduled airline activity dropped 49 per cent compared to the same period in 2019.

Private jet companies are witnessing an uptick in demand as well-heeled travellers opt to avoid crowds and find alternatives to commercial flights, which have reduced frequencies.

Royal Jet is receiving "lots of inquiries" for corporate shuttles, or companies seeking to fly groups of their employees between locations, Mr DiCastri said.

Leisure travel is also picking up over the summer, with some enquiries and last-minute bookings for European destinations. Maldives and Seychelles are popular routes and the US is attracting more interest as the government controls the spread of the virus.

"We tend to fly heads of states to UN meetings when they're in person, so if those come back in the fall, there will be that type of flying," he said.

Some passengers have switched to private jet flying during the pandemic due to fewer first or business-class seats on commercial airlines where routes have been axed.

"There's some pick-up, especially in smaller business jets, where the price point is more reasonable for a group of six to eight people to rent a private jet ... and on bigger aircraft where there's been large families, teams or corporate shuttles," he said. "The question will be when the really high-quality commercial aviation options come back, will they stay with private aviation?"

Prices for a private jet trip are calculated based on an hourly flying rate, which differs by type of aircraft.

A flight on a Boeing Business Jet (BBJ) typically costs $12,000 to $15,000 depending on factors like the age of the aircraft, while the hourly rate on a Bombardier Global 5000 costs $9,000, the chief executive said.

At those rates, a round-trip between Abu Dhabi and London would cost about $180,000. A journey between Abu Dhabi and Cairo would cost just under $100,000.

Royal Jet, which owns or operates 10 BBJs and two Bombardier Global 5000s, is considering a new order of aircraft to replace its fleet of owned jets, Mr DiCastri said.

The luxury charter flights company is looking at various BBJ Maxs and Airbus Corporate Jet (ACJ) Neo models, though these are unlikely to be delivered for two-to-three years due to backlogs, he said.

"Even though we're in the midst of a comeback, we have to think two or three years ahead about what's the demand going to look like then, so we need to place an order now to have those aircraft come in at that time, so we're having deep discussions on that," Mr DiCastri said.

Royal Jet is planning to place a small, phased order to replace the six aircraft currently owned and keep its fleet young.

The company will make a decision by the end of the year on whether or not to proceed with the order, Mr DiCastri said.

Royal Jet is also looking to expand its portfolio of aircraft under management with the new Bombardier Global 7500 ultra-long range jet, whose size falls between its BBJs and Global 5000 aircraft, the chief executive said.

"Our strategy in that part of the market is to see if we can get some of those aircraft [Global 7500s] under management. We would not necessarily purchase them, but to have that kind of aircraft for our customers who want to do a direct flight to the US, for example, it would be a nice, additional capability for us to have," he said.

Aircraft under management is a structure where a private jet owner would hire a company, such as Royal Jet, to manage and operate its aircraft on the owner's behalf.

Royal Jet currently has two aircraft under management but is looking to expand this segment.

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