LunaJets sees a hard landing after a golden age

Private Aviation Market

After two years of post-pandemic unsustainable growth, the business aviation market is experiencing a major step back. "Our industry is highly cyclical and exposed to macro swings, we are not surprised by this slowdown in Europe. We had largely anticipated this situation (LunaJets' Ebace 2022 press release) but nonetheless remain very concerned by this new market." noted LunaJets' CEO Eymeric Segard.

"Low interest rates, M&A and corporate activities at all-time highs are clearly behind us, as we foresee a hard landing for our industry with potential supply dislocation risks if conditions remain" Segard concludes.

A Slow Start of the Year for LunaJets

"We were pleased to report a 40% revenue growth, to nearly $150M, and a record of 1,250 new clients for 2022, despite a slow down since last August. However, from January our revenue and bookings have decreased by 3%" comments Guillaume Launay, the Group Head of Sales, "which is disappointing but well above market average."

"Overall, our summer pre-booking level although a little later than normal, remains strong, whereas pricing and availability are much better than last year. We now predict return to normal after the chaotic Summer 2022 due to airport and supply issues have abated significantly" he adds.

New Offices and Executives

Record breaking results from Luna Aviation

Luna Aviation Group, the leading European aviation charter company, provides a market update on its 2022 performance reflecting tremendous growth of its LunaJets and LunaGroup Charter brands fueled by unprecedented demand from existing, new clients and additional offices.

The Group continues to see strong growth in its various business lines, with revenue up over 45% versus 2021. Despite negative stock market returns, constant rising inflation and the Russian-Ukrainian conflict, the Group generated a record-breaking revenue for the year.

2022 Growth

After a record 2021, LunaJets, the private jet charter division of Luna Aviation Group, exceeded $150M* annual revenue in 2022 for the first time in its history, representing a 40% YoY increase. The number of flights organised generated over 12,000* movements representing more than one aircraft taking off every hour worldwide. The company welcomed more than 1,250 new clients.

During its second year of operation, LunaGroup Charter, the commercial charter division of Luna Aviation Group, exceeded $15M* annual revenue and is up 290% in the number of flights organised. "Considering the post-pandemic situation, particularly the uncertainty of whether international events are hosted, and a slow start of the year we are delighted by these numbers and by growing our market share. Our worldwide activity enabled us to achieve a record-breaking fourth quarter," states Rémi Aubin, LunaGroup Charter Sales Director.

LunaJets Nearly Doubles Revenue but Sees Clouds Ahead

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" Launay adds.

LunaJets' website and mobile app receives thousands of visitors every day. A large portion of whom are newcomers who aim to avoid post-Covid commercial airport and airline experience at any cost.  Last year, LunaJets acquired north of 1,000 new clients.

Eymeric Segard, CEO and Alain Leboursier, Managing Director
Photo LunaJets

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 I 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".