The nine week lockdown which grounded huge numbers of commercial airliners is likely to have a significant impact on the private marine and aviation industries, according to Andrew Wilson, ZEDRA’s Head of Marine and Aviation services, with the rental sector set to benefit most.In March, when it became apparent that near global lockdowns would be necessary, jet hire companies reported a huge increase in rental, as individuals looked to fly privately for security, flexibility and because it was difficult to get the flights they needed with commercial carriers.
‘March saw almost unprecedented private jet usage. Jet lessors saw some repatriations, but other flights were related to business, as we saw a flux in companies hiring jets in order to close important deals. With caution now the watchword in so many sectors, we think private jet purchases for personal use might slow down, but at the same time, in order to maintain flexibility around travelling options, senior executives may well turn to leasing. That would suggest more demand for new jets for rental firms and structures to support these purchases,’ says Wilson.
Zedra believes that businesses, individuals and families are being very careful with expenditure, forecasting and cash reserves, but some purchases are still going ahead. The biggest change is likely to be new contract clauses inserted to protect both sides against the impact of future pandemics and other as yet unforeseen events. ‘We are expecting new sales to be subject to some very stringent restrictions and clauses designed to protect both buyers and sellers. Likewise, we are hearing that lawyers involved in these transactions are advising if force majeure can be applied to contracts in the context of a pandemic,’ says Wilson.
The issues facing private yachts are very different, but the future no less optimistic. Like most land based businesses, movements have been restricted and international maritime organisations have issued specific guidance on how to handle crew changes or deal with illness on board. Ports have restricted entry to key workers or to attend to emergency situations and crews are mostly in isolation on the yacht with no owners or guests going on board unless they were there pre lockdown. The agencies that typically visit yachts to carry out standard compliance checks have made provisions to move the dates of these, or take matters online.
As with commercial airlines, the holiday traffic has been halted, so yacht owners may find that the summer charter season is affected. Going forward demand may also be impacted by psychological factors such as how comfortable people feel about vacations and holidaying in general.
In the medium term, though, Zedra is optimistic about the prospects for the industry, citing its unique characteristics of safety and isolation as appealing to many. Wilson believes that “While we may be facing a slow summer for yachting, it does not mean that the lull will last long-term. We could actually see increased interest in the yachting industry. Yachting affords both privacy and total seclusion, if you want it. It may take a while to get back to normal, but looking into next year and beyond, I think we will see significant uptake in charters and commissions,’ says Wilson.