_A question of priorities: going private
The results of The Wealth Report Attitudes Survey, which this year is based on responses from almost 900 of the world’s leading private bankers and wealth managers, offer an annual window on the issues that are influencing UHNWI investment and lifestyle decisions.
All the survey results are collated on a regional basis in the Databank section of the report, but over the next few pages we use market-leading data and insights to delve deeper into some of the areas covered by the survey that are receiving increasing attention from the wealth industry: travel, education and philanthropy.
Going private
According to the Attitudes Survey, only 15% of UHNWIs use private aviation for the majority of their business and personal flights. However, the pattern varies widely around the world.
Latin America’s wealthy residents, perhaps worried about the risk of kidnapping, are the biggest users, with 40% opting to go private. Just 4% of Australasian UHNWIs regularly choose to take a private jet, and in Asia their usage still lags behind the region’s rapid rise in wealth creation – only 9% of UHNWIs routinely travel on non-commercial flights.
"It wouldn’t be unusual for a firm with a turnover of US$50m to have its own plane."
In-depth data supplied by industry analysts JETNET and WINGX, confirm these broad patterns, but also reveal some striking emerging trends.
While the US (12,717), Mexico (950) and Brazil (786) are the top three nations by some margin when it comes to fleet size, JETNET’s figures show numbers are rising fast in Asia. Hong Kong (+535%), Taiwan (+367%), China (+347%) and Macau (+300%) all feature in the top 10 list of locations where growth has been fastest over the past 10 years. China, with 277 jets, now claims eighth position in overall ownership levels.
In terms of flight numbers America dominates – over 75% of the world’s 1,000 busiest routes are within the US. “Business aviation is deeply embedded as a complement to and in some cases a replacement for scheduled airline services,” says Richard Koe, Managing Director of WINGX.
“It wouldn’t be unusual for a firm with a turnover of US$50m to have its own plane,” confirms Hardy Sohanpal of international operator Global Jet Concept.
As our data shows, geopolitics can have a major impact on private aviation. Traffic between Cuba and the US, for example, has taken off sharply since 2012, while the opposite is true of flights between Russia and Ukraine.
"Looking ahead, the Chinese market is set to see strong growth", says Mr Koe. “The government is starting to see the importance of business jets as a competitive tool to support corporations in pursuit of regional trade opportunities.”
“There are a lot of aircraft being put up for sale at the moment and now is the perfect opportunity to trade up or buy first time."
"There is also the potential for growth in the US depending on how the new administration’s policies play ou"t, adds Mr Sohanpal. “We have had a number of enquiries recently from construction and finance companies.
"But growth in Latin America is likely to be more muted, particularly in oil-dependent countries like Venezuela, he notes. “There are a lot of aircraft being put up for sale at the moment and now is the perfect opportunity to trade up or buy first time.”
"Globally, however, private jet numbers are likely to rise as the desire to travel efficiently with maximum privacy becomes more of a priority for corporations and private individuals", says Mr Sohanpal.
"The introduction of new apps and charter models that are competing to become the Uber of the airways is also likely to attract those who shuttle frequently between cities travelling first or business class.”
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