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Charter Volume (Jun 2, 2022)

Flights not following the 2021 pattern

We have crossed into the month of June, which puts us in position to look back on the full month of May. What our data is showing us, is that the average daily charter hours flown for May 2022 dropped almost 10% when compared with April 2022. This is in contrast with a slight increase between these two months in 2021. Volume still came in higher for May 2022 than May 2021, but we're not seeing the double digit growth that we saw earlier in the year.

There are multiple factors at play that I would consider headwinds to growth. The performance of the stock market, inflation, and the price of oil are the big three. Historically the charter market lags (but is impacted by) negative economics and that seems to be the case here. That said, flying closer to 2021's historic volume levels isn't necessarily a bad thing for an industry that is struggling over issues with hyper-growth.

This could be an opportunity for companies to catch up. While there is some recession talk circulating, most of the talk is that if there is a true recession it is likely to be a mild one. With Covid still a real concern, the health/safety of private aviation is likely to push us through in a manner we haven't seen in past downturns (if that is in fact what we are experiencing).

Here is the latest data on wholesale fuel. The market is still volatile and will remain that way for the foreseeable future. Even if there were a ceasefire today, it doesn't seem likely that the World would flock back to Russian oil.

Through May 13th

Through May 27th

Both of the above charts were pulled from IATA's website:

In terms of fuel prices at the FBO level, today AirNav is showing $6.70 as the national average, which is 5 cents cheaper than two weeks ago. This is the first decline I have seen at the retail level since the war in Ukraine broke out. That's a positive sign that we may be nearing the peak.

Below you'll see the Air Charter Trend, which is showing a dip compared with 2021 for the first time this year. Overall volumes are much closer to 2021 levels with major cities seeing more traffic as they have opened back up and some of the second home cities seeing drops. Anecdotally, this is because we are hearing that more folks are getting back into the office... maybe not five days/week but on a much more regular schedule.

As you can see in the chart below, the pattern for Part 91 is showing a bit of a decrease but not to the same level as what we've seen for the charter market. That is to be expected as Part 91 flying is not typically affected by short-term economic factors to the same degree as on-demand flying is.

Except for the Memorial Day holiday and the expected drop in traffic for that weekend, you can see that Teterboro continues to trend well above 2021 levels.

Here is a look at Eagle/Vail Valley... you'll note that traffic was off almost 10% when compared to 2021. We've been seeing this trend away from ski-country and some other 2nd home cities that were popular over the lockdown with requisite increases in traffic at airports close to city centers.

For those who wish to join the call to see the breakdown by size class, the top 50 O/D pairs, and 50+ other airports, join the call at 3pm and I will walk through the complete deck.

Best Regards,