Millionaires and billionaires are having a hard time finding jets available for purchase in Brazil. Demand for private planes has grown so much in recent months that those interested have to wait in queues that can last for years.
The explanation for the heating of this market comes from the pandemic. According to companies in the sector, the health crisis caused interest in executive aviation to explode among the super-rich, who wanted to continue with their travel routines without subjecting themselves to the risk of contamination.
The problem is that supply has not kept up with the boom in demand. The recent disruption of global supply chains has compromised aircraft production and maintenance due to a lack of essential components, and has caused a portion of maritime transport to migrate to airports — taking jets out of the executive market.
Faced with scarcity, millionaires began to dispute each jet offered for sale. Not only in Brazil, but all over the world.
Bruna Strambi, director of LÃder, one of the largest executive aviation companies in the country, says that high demand is a global phenomenon, which affects both the purchase of aircraft and charter services, shared ownership and outsourcing.
The company is the exclusive representative of the Hondajet, a model manufactured by Honda that costs about US$ 6 million (R$ 27.8 million). According to Strambi, to acquire a new one you have to face a long queue, with deliveries starting in 2025.
Anderson Markiewicz, Sales Director at LÃder, has worked in the aviation sector for 32 years and says he has never seen a scenario as heated as it is now.
The demand is so great that even the used car market has inflated. According to him, some aircraft that are one or two years old are even priced higher than a factory one, as customers don’t want to wait for a brand new one.
“Before Covid, the time it took between the announcement of an aircraft [usada] and the sale was on the order of several months, sometimes more than a year. Today, if someone advertises now, they sell tomorrow. It’s a matter of hours, an impressive thing,” he says.
A 2021 survey by consultancy Wealth-X showed that Brazil is the second country with the most private plane owners in the world, second only to the United States. The ranking has Canada in third place, followed by Mexico and Germany.
Currently, Brazil has over 16,000 private aircraft, which include jets, planes, turboprops and helicopters. Considering only jets, the fleet increased by 8.5% between February 2021 and February 2022, from 680 to 738 units.
Some of the most desired models by Brazilians are Embraer’s Phenom 300, which costs more than US$ 7 million (R$ 32.4 million) and the King Air family turboprops, in the range of US$ 7.5 million (37, 1 million).
The intense movement in the market also helped to increase Embraer’s cash position. In 2020, the company sold 86 executive jets, a number that rose to 93 in 2021. This year, deliveries are expected to be between 100 and 110 aircraft.
According to the company, executive aviation achieved revenue of BRL 6.12 billion in 2021, a 9% growth that was driven by increased deliveries and higher prices. In 2022, the increase could reach 18% compared to the previous year.
New billionaires heat up demand
Paul Malick, president of Flapper, says you can wait up to a year to buy the most sought-after planes, like the Challenger 600.”[O modelo] is very desired because it has a large cabin, accommodates up to 12 passengers and allows flying from Brazil to Europe with just one stop”, he says.
Malick also attributes the increase in demand for business aviation to the pandemic, but does not limit the explanation to that.
“Another reason is the simple fact that, in the last two years, the number of millionaires and billionaires has increased,” he says. “We, for example, have received many clients who have just entered the Stock Exchange and become CEOs. [São pessoas que] suffered the last ten, 15 years working and now they want to enjoy life more. This has definitely affected the sector in a positive way,” he adds.
According to him, the profile of Flapper’s clients are small or medium-sized companies (from 15 to 40 employees), but with high profitability – such as surgery clinics and companies in the financial market.
Amid the business aviation boom, Malick also saw customers regret the decision. He says that some did not realize the costs of maintaining a small jet — which are around R$100,000 a month — and are now taking a step back.
“Some aircraft are being re-marketed, but it’s still not a trend that will impact the market.”
Demand must remain high
For the Executive, the scenario of high demand and low supply should last another three years. One of the reasons is the flexibility that executive aviation provides. After opting for the service, customers rarely return to trade routes.
According to data from Anac (National Civil Aviation Agency) compiled by Abag (Brazilian Association of General Aviation), Brazil has 491 public airfields, with private ones reaching 2,675 – almost six times more options.
Marcus Matta, CEO of Prime You, also believes that the market will remain heated, but is betting on an adjustment in the supply of aircraft throughout 2023.
The company of which he is founder is mainly active in the segment of shared ownership of planes, helicopters and other luxury goods – a model that he envisions having a more lasting boom.
According to Matta, the shortage of aircraft for immediate delivery has led many people to rethink exclusive ownership and to consider the sharing model.
“If we look at a more thriving market —such as the American one, which has a huge number of aircraft—we see that this is the system that has grown the most”, he says.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
