Industry Consolidation Reduces Fragmentation in Private Aviation Industry

Industry Consolidation Reduces Fragmentation in Private Aviation Industry

For the past two decades, the private aviation industry has suffered from too much fragmentation which, while offering consumers new choices, has also caused confusion with so many new options like the rise of business aviation apps and flight-sharing options.

The recent consolidation activity is only the latest in a series of industry consolidations we’ve seen. We continue to see the consolidation of aircraft manufacturers and the growth of mega fixed base operators. We’ve also seen it within the aircraft operators, so the natural progression extends to aircraft charter brokers.

There are many benefits to consolidation, not the least of which is the fact it makes strong players stronger and new, innovative companies become successful faster. Consolidation often shows inefficiencies. Despite being large, some companies haven’t been able to grow organically so consolidation allows continued growth in what is now a mature industry.

These merged companies, if they can integrate their cultures successfully, maybe responding to passenger preference for consistent services. But business aviation companies must be careful not to fall into the trap airlines did when that industry consolidated. They promised seamless service but achieving that has been frustratingly elusive for passengers especially in global markets.

Airlines also went through a period of disruption that diluted the passenger experience as they continued to integrate. What consistency they once had was lost in attempting to create a whole out of disparate halves. This is just a natural consequence of consolidation, but it is the customer who pays while they are getting their act together.

The recent consolidation trend in private aviation is likely to benefit private aviation consumers by reducing costs as companies combine to achieve the economies of scale that have made other industries so successful. Consolidation also provides companies with a global reach and diversified fleets so no matter where you have travel needs you have a one-stop-shop to meet those needs.

Despite these benefits, we mustn’t lose sight of what independent companies can offer the discerning client. These companies are becoming more creative, quicker, and more flexible in meeting client needs. Many are upping their game, creating partnerships that give them the global reach of these industry giants. They are also devising personalized experiences offering unanticipated but delightful details clients don’t even know are available.

Industry consolidation is a double-edged sword for consumers caught in the fallout of all this M&A activity making independent companies a go-to solution for the next few years.