Avinode / Avinode Group / BusinessIQ / COVID-19

Charter rates gradually increase as demand recovery continues

02 Jul 2020

Demand for global charter has been recovering in the last couple of weeks and this is now being reflected in charter rates too – increasing from dramatic price cuts seen during the peak of the crisis.

Trip demand index

The chart below is a rolling 7-day index of demand normalised to 1st March, for trips requested through the Avinode marketplace. New restrictions have seen demand for US domestic (blue) charter flatten in the last week or so. Demand for intra-European flights (red) continues to steadily increase.

US domestic demand significantly higher

Since the start of June, demand for US domestic travel through Avinode has been significantly higher than the same period last year, supporting reports of a surge of customers new to charter. Regionally, travel on the East Coast has led the way, but demand is now more equally spread across the country. The slowest segment of the market to recover has been for travel within the Northeast, but it is trending in the right direction. Within the Northeast, demand for travel next week (6th to 12th July) is down 33% compared to the same stage of the booking cycle last year, compared to down 42% for last week (22nd to 28th June).

“Demand for US domestic travel through Avinode has been significantly higher than the same period last year.”

Changes in charter rates have reflected the shifting demand environment. The below is a price index based on quotes in the Avinode marketplace, normalised to 1st February. Most categories saw a decline to around the -20% level, followed by a gradual improvement from early-May. The category that saw the biggest price changes was Super Midsize. These rates have now recovered to nearly pre-COVID levels having been 50% lower at one point.

Steady improvements in Europe

European demand has continued to increase in recent weeks. The chart below shows the number of trips by requested date for each departure month, for travel within Europe. Demand for travel in June (green) finished 33% below last year. July (orange) has just reached the same level it had at this stage last year, with a steeper gradient suggesting it will improve further. August (black) is gradually closing on its last year position. Demand is starting to surge from the UK, amid expectations of a loosening of quarantine on return rules for certain countries. France, Spain, Italy and Switzerland continue steady improvements. Demand from Germany has softened slightly, from a peak in mid-June when restrictions were first lifted.

European charter rates reflect the improving demand environment. Hourly charter rates have been in slow recovery since early-May, having hit a low of around -22% when compared to 1st February. Entry level jets have been able to recover more quickly than the other categories. Turbo-prop rates stand out for having not started their recovery yet.

Outside the US and Europe, Russia continues to see improved demand in July with the most popular trips being domestic travel, and to Italy, Spain and France. Demand to Italy and France is lower than last year (-7% and -28% respectively), whilst Spain is significantly higher. Demand from the Middle East is greater from the UAE than Saudi Arabia; the most popular destination from the UAE is Greece, whilst from Saudi Arabia it is Spain.

Harry Clarke,
Head of Insight, Avinode Group


Keep reading

02 Jul 2020

Avinode Group , Member Stories , Paynode , Paynode Member Stories , The Node

Becky Bakeman - How Paynode helps keep things simple for this complex business.

Life is busy for Becky Bakeman. As President of RAI Jets, she oversees a business that specialises in many aspects of private jet charter and aviation. With so many strings to their bow, having a smooth payment process in place is essential. Here, Becky tells us how Paynode simplifies the way she sends and receives payments, the pain of managing payments in the past, and why she thinks more companies should get onboard.

Read more
02 Jul 2020

Avinode Group , Member Stories , Paynode , Paynode Member Stories , The Node

Ronny Dominguez – How Paynode is the perfect payment partner for this fast growing brokerage.

With his finance background, Ronny Dominguez – CEO and founder of Moonlight Jet – knows all about what makes a great payment solution. Here, he explains how there’s nothing else quite like Paynode on the market, how he thinks the product can benefits businesses of all sizes, and what life was like before becoming a Paynode user.

Read more
02 Jul 2020

Avinode Group , Paynode , Paynode Member Stories , The Node

Brad Searls – How being part of the Avinode system means you can trust in Paynode. 

As a pilot, Brad Searls, experienced what makes Avinode the best in the business. So, when he founded his own brokerage, The Jet Guys, he again chose the name he trusted, which led him to become a Paynode user too. Here Brad explains how Paynode makes his life easier, why he’s only scratched the surface of what Paynode offers, and why he wishes every broker and operator would join him and sign up.

Read more