As the private aviation charter market continues to enjoy a “new golden age”, Geneva based LunaJets warns at this EBACE of a hard landing as it sees more signs of market bubbles.
“This year-to-date, our growth is over 90%, considering a $110M revenue in 2021 for our private jet charter division” comments Guillaume Launay, LunaJets Sales Director
“our Web platform model and industry position puts us at the front line of any market changes; and I can tell you that the shift has been dramatic”.
LunaJets’ website and mobile app receives thousands of visitors every day.
Eymeric Segard, LunaJets CEO, warns “I am delighted with our performance so far.
“We continue to deliver on our strategy based on the best technology, and expand with new offices into new markets.
“Nonetheless, I maintain a cautiously optimistic and opportunistic approach as I don’t believe in the current euphoria and see more risks ahead for our industry.
“Either the current trend lasts, and the market faces a major supply issue, or it reverses dramatically and faces a new wave of bankruptcies.
“2021 was like a wild pendulum, from one side to the other in 3 months and I don’t see any indication of a soft landing.
“Having said that MI will not be surprised if we experience another >50% growth in our revenue this year if the current situation remains.”
Segard adds “Most of our competitors have either been acquired, gone into administration or are currently for sale.
“With our long-term track record and cash rich balance sheet we are ready to seize any opportunity as we expect more consolidation ahead when the market reverses”.
Segard lists his view of the risks for the industry:
- Post-Covid recovery mostly based on new clients and short flights, rather than existing and long haul.
- Business clients have not returned to pre-Covid level as video and remote working are still favoured
- Financial market volatility may send new clients back to commercial airlines
- The crypto wealth effect may disappear as fast as it stormed our industry
- War in Ukraine
- Supply chain disruption will delay plane delivery and maintenance
- Pilot and crew shortage
- Impact of inflation on charter rates
- Rising cost of debt and financing will impact the velocity of sales and acquisition market
- IPO’s, SPAC’s and M&A activity at nonsense prices will fade
- New Covid variants
- Sustainability regulations
LunaSolutions, the sales & acquisition division of the group, is also experiencing a strong year and hits a new record of transactions.
“We see aircraft that we sold within the last 18 months coming back on the market at a premium of 50%” comments Alain Leboursier, LunaJets MD.
“The market has shifted from struggling to find buyers to struggling to find enough good aircraft in a few months.
“The situation is very similar to the charter market, and maybe worse than the 2008 bubble peak” fears Leboursier.
“We will continue to diversify our revenue stream into other aviation services markets.
‘During Covid we opened a new Cargo division, LunaLogisitisk, and a Group Charter division, run by Rémi Aubin in Paris, who has already organised flights for more than 18,000 passengers this year”.