In today's Finshots we talk about the boom of private jets and its impact on the world
The Story
If the unexpected emergence of delta or — most recently — omicron variants have taught us anything, it is that global air travel can unravel anytime. There is uncertainty in the air and countries have been known to close their borders at the drop of a hat. It’s making life difficult. But more importantly, it’s making travel difficult.
And for most people, there is no avoiding this reality.
Unless…
You have some extra money lying in your bank account. In which case, you can snap up a swanky private jet and travel like a boss. No airport queues, no contact with other travellers, and little chance of catching that pesky Covid.
And this pretty much sums up the boom in the private jet industry.
Every newly minted billionaire seems to want one of these bad boys. So much so that demand for these pricey jets has far outstripped supply.
As one Wall Street Journal story puts it, “Orders in the third quarter rose more than 50% over the past year, according to the industry’s four largest manufacturers. Gulfstream, the world’s largest business jet maker by revenue, has its biggest backlog of orders in six years. Brazil’s Embraer is sold out of private jets until the first quarter of 2023.”
Plane makers who saw their business hit rock bottom are now raking in revenues like never before. And while you’d think this is happening because of Covid — a byproduct of fear and paranoia, that’s only part of the reason. The other half of the reason is that we are minting more billionaires than ever before.
As one article in the Forbes notes —
Covid-19 hasn’t stopped the spread of billionaires, who multiplied at an astounding rate over the past year. A record 493 people joined Forbes’ World’s Billionaires list this year — meaning the world on average gained a new billionaire every 17 hours since Forbes last took a snapshot of billionaire wealth on March 18, 2020. The previous record for most new billionaires in a year was 290 in 2015.
There were billionaires in the healthcare industry. They were billionaires in the crypto industry. There were billionaires from all walks of life. And most of them will probably want a private jet at some point in their life.
But this boom comes at a cost.
Air travel gets a bad rep for being terrible for the environment. The aviation sector in total accounts for around 2.5% of all global carbon dioxide (CO2) emissions. Private aviation alone accounts for around 4% of that. Now 4% out of the whole pie may not seem like a lot, but when you look at per-capita emissions, you’ll start seeing why it’s so bad. Private jets carry far fewer people than you may have imagined and the numbers don’t look good at all.
According to a report by European Federation for Transport and Environment, private jets were found to be as much as 5 to 14 times more polluting than commercial planes (per passenger), and 50 times more polluting than trains — With a single private jet emitting around two tons of CO2. And then there’s the fact that many of these ultra-wealthy individuals champion the cause of the environment.
The Scottish city of Glasgow which hosted the 2021 United Nations Climate Change Conference was a testament to this fact. Private jets were a pretty common sight at the climate summit and the huge traffic jam forced empty planes to fly 30 miles to park. As per a BBC analysis, world leaders who flew from Rome (from a G20 summit) probably burnt around 11.3 tonnes of CO2 equivalent. The figure would have been much lower had they opted for commercial flights. But that it is idealistic thinking. We know presidents, prime ministers and their entourage will perhaps not ditch their planes anytime soon.
But that still leaves us with other billionaires like Jeff Bezos. Who for instance faced severe backlash when he landed in a £48 million Gulfstream — along with some 400+ private jets carrying other champions of the environment — all to say “Looking back at Earth from up there, [in space] the atmosphere seemed so thin…the world so finite and so fragile…we must all stand together to protect our world.”
Yeah!!!
And private jets don’t just tick off environmentalists.
Over the years shareholders too have been annoyed at the obscene display of wealth. And some of them have even gone on to force executives of General Electric and JC Penny to sell their fleet and adopt a more sustainable lifestyle.
So yeah, private jets are booming right now. But with the increased focus on sustainable living maybe there will be more pressure on the super-rich to ditch these multi-million dollar artefacts.
Until then…
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