The Coronavirus Economy: How the private jet business changed overnight
Mark Green, the CEO of British private-jet charter agent Volanteus, has suddenly found himself in the repatriation business.
Mark Green, the CEO of British private-jet charter agent Volanteus, has been in the business for 25 years. During that time, he has experienced two significant dips—after 9/11 and during the 2008 financial crisis—but nothing like the coronavirus crisis.
Fortune spoke with Green for a new series, The Coronavirus Economy, to ask about how COVID-19 has affected his business, now completely reorienting its efforts, and to get a sense of how he has been handling this news, both emotionally and financially.
Fortune: What has changed in your business since the crisis struck?
Green: The dynamic changed almost overnight. Historically, it doesn’t take a genius to work out that the private jet sector is used by high-net-worth individuals, and commercial jet chartering has historically been larger groups—such as football fans. [Now] everything we are doing, literally everything, is the repatriation of citizens of various nations going home, whether that be cruise ship staff flying home to the Philippines, or gas workers flying to London from Africa or Aberdeen.
Even leisure travelers—we had about 25 passengers at a golf tournament down in Marrakech. They had all their flights canceled at Marrakesh Airport. We repatriated them back to the U.K. All those scheduled flights were canceled. Everything we’re doing at the moment is repatriation, for a thousand different reasons.
So would you say your niche is doing well at the moment?
In the short term, our charter industry is doing a lot better because those scheduled services have curtailed a lot of their routes, and some airlines have even stopped flying entirely. We’re then able to step in and use those airlines’ [planes].
For example, British Airways may have stopped a lot of their flying, but the Foreign and Commonwealth Office have been using those airplanes to repatriate people. Our industry is able to utilize that spare capacity. Historically, British Airways tends not to have a great deal of availability, whereas now…the availability is much greater.
What is the outlook in the medium term?
In the short term, it is very busy. In the midterm, I think it will be able to slow down. There will still be a lesser need for medical supplies, pharma—humanitarian flying. That business is still going to be there, but I think there will be quite a dramatic slowdown. In my personal opinion, it will be two or three months before the slowdown begins to pick up again.
We’re an agent, which means we charge a fixed, commissionable rate. We are finding with a lot of the private jet companies, because they know it’s going to slow down, the aggregate price has risen considerably. They realized they can sell their aircraft [capacity] right now, but in two to three weeks probably not.
They still have crew to pay for, maintenance and so on. The government won’t be bailing them out. So the prices of the private jets have gone up over the last few weeks—but we see this all the time. In summertime, the prices go up; in winter the air companies are coming to us asking for business.
Are the current price rises in line with that typical seasonal bump?
Maybe a bit higher. On average, in winter it’s minus 10%, in summer plus 10%. Now it’s possible just a little over 10% [up].
Do you think you’ll see wealthy individuals hiring more private jets because regular services are grounded?
That could be a thing. There’s an awful lot of new business coming out of this crisis. For example, an oil company that historically wouldn’t charter a private jet for second-tier or third-tier or even menial workers—those people are struggling to get themselves home, so they charter a couple of flights.
You could call it corporate or certainly employee responsibility, chartering a private jet to ferry six or seven people home. It may be costing them 10,000 pounds [$12,230] a seat, but what’s it going to cost to keep them down there? Obviously a company spending 60,000 pounds on bringing six workers back from Africa to the U.K. has to have certain level of wealth, but it also shows character and common sense and goodwill.
More coronavirus coverage from Fortune:
—Why Iceland’s approach to coronavirus testing may be better than America’s
—Everything you need to know about the coronavirus stimulus checks
—From glow sticks to surgical masks: Businesses pivot to tackle coronavirus shortages
—The world’s largest coronavirus lockdown is off to a rocky start
—The oil sector is quickly running out of storage for its unprecedented surplus
—The $2 trillion coronavirus stimulus package isn’t green, but it helps
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: World leaders and health experts on how to stop the spread of COVID-19
Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.