5 Trends In Business Travel
Although a private jet flight can be ordered for a weekend party with friends or a family holiday, business travel is still the main segment of the bizav market. Business travel expences have gone up to $1.106 bln in 2013 with USA, China and Japan being the leading countries.
With 2014 coming to an end we want to share top 5 trends in the area of business travel:
- High growth rates in China
- Airplane tickets and hotel prices increase
- Crimea crisis and the Russian market
- Japan jet market ready for take-off
- Technologies as growth factor
In-depth analysis of these trends leads to understanding of how the business aviation sector will also change.
1. High growth rates in China
Business travel spend in China grew to $225 billion in 2013 (from just $32 billion in 2000), and the GBTA have forecast that China will be the lead market, overtaking the USA by 2016.
China’s private jet market is also showing a rapid rise. The geography of China is a perfect landscape for private jets – a vast landmass, located far from its key trading partners. However there are still limited aircraft available (around 400 are based there). China also has air-space restrictions and far fewer airports (less than 400, compared to 18,000 in the USA). But this is set to change, with military airports opening up for civil use and many more jets set to be delivered into the market in the next few years.
2. Airplane tickets and hotel prices increase
Private jet pricing is not likely to see any significant increase in the near future.
The market is still seeking a return to growth, and price sensitivity is a key factor in encouraging businesses back to using private jets again. Private jet charter pricing is highly competitive, and will remain so as we see returning confidence to the industry.
3. Crimea crisis and the Russian market
Russia, a market that has seen big rises in business travel spending, is now under threat of plummeting due to the Ukrainian crisis.
The Russian market continues to be a strong contributor to the private jet market, but more so for those based outside of the country. In July 2014, business aviation movements in Russia and Ukraine fell 12% and 49% respectively year on year.
4. Japan jet market ready for take-off
Compared to its regional partner China, cultural attitudes to private jet travel are more hesitant and economic growth is lower. There is also travel competition from its high-speed trains.
Bureaucracy in Japan is also such that business aviation is not a priority and there are limited slots. But this could be set to change: Tokyo’s first dedicated business jet terminal opened earlier in 2014, and there has also been a relaxation on overseas aircraft movements and permits.
Japan is also featuring on the global private jet stage with the impending launch of HondaJet. The small jet is set for certification and market entry in 2015.
5. Technologies as business travel growth factor
The private jet industry is seeing rapid change through technology, and booking a bespoke product like a private jet charter flight is now possible (and easier) online – with dramatic enhancements in booking leadtimes and price transparency.
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