Posted by Aerlex.com on Jul 14, 2020 in Articles, BusinessAir Magazine, The Latest
Amanda Applegate at aapplegate@aerlex.com or at 310-392-5200.
Originally published in BusinessAir Magazine, June 2020, Volume 30, No. 6.
As the United States and other countries around the world start to lift their stay-at-home restrictions, many individuals and companies are electing to increase or exclusively fly privately for the foreseeable future. Prior to the global pandemic, a number of companies and individuals used either a hybrid solution of flying, which included both private and commercial flights, while others elected to fly all flights commercially, even when private aviation was financially viable. The reasons for these choices, such as cost savings or flight shaming, are now being significantly overshadowed as a result of the global pandemic. Today those companies that previously used a hybrid model have new mandates which extend private flying rights to more employees for both business and/or personal use. In addition, those who previously elected to fly commercially are now more likely to select a private aviation solution when it is financially practicable.
I have been inundated with questions related to immediately available solutions to cover the new normal individuals and companies are navigating. When looking for a private aviation solution the usual choices are still available: ad hoc charter, membership programs, pre-paid jet cards, leases, fractional ownership and whole aircraft ownership. What is different and hard to evaluate is the financial stability of the various service providers. When considering a service provider for private aviation, a few new questions should be asked:
• What was the cash position of the service provider prior to the pandemic?
• Did the service provider receive any funds from the CARES Act?
• Has the service provider defaulted on any significant loans?
• If funds are prepaid to the service provider, are the funds maintained in separate accounts and who is the owner of those accounts?
• What budget cuts has the service provider implemented during the pandemic? Have any employees been laid off?