Dassualt Aviation -65% since Top vs Airbus -60% from Top - Maybe Worth having a look as business different and this Crisis could change Corporate politics for flying.
Good alternative to go Long around here
Stock already OP on the last few weeks by 23% but Still Think good level (-74% Underperf on the sat 10y)
From: Laurent Chekroun (MAKOR SECURITIES LO) At: 03/17/20 08:24:18
Subject: FT : Private jets: fear and loathing at 40,000 feetPrivate jets: fear and loathing at 40,000 feetSmaller outfits and highly leveraged groups may find the going exceptionally bumpyFear is perversely a good thing for private jet companies. After 9/11, business boomed. The coronavirus outbreak too has spread panic about boarding commercial flights. Spotting the opportunity, UK broker Air Partner, which evacuated Europeans from Wuhan on chartered airliners, launched a virus evacuation service last week. But the disease is more drag than thrust on the profitability of private jet operators.Corporations and ultra-wealthy individuals have sought out private jets to avoid infection risks in crowded airports and sardine-packed commercial flights. Private flights from Hong Kong leapt over 200 per cent in January. Those gains are no more than a temporary blip though. They are overshadowed by cancellations triggered by infection fears and event cancellations from international sporting fixtures to car shows. Europe has already seen the uplift in demand to fly privately peak then decline.In a recession, demand will drop as luxury spending dives and executives are downgraded to economy. During the 2008 financial crisis, private jet flights out of the UK fell 20 per cent. Manufacturers delivered a third less new-builds. Expect the likes of Bombardier, Textron Aviation’s Cessna and Embraer to suffer.Corporations ditching jet ownership for Uber-esque air taxi services to cut costs and the increasing numbers of Asian billionaires may both soften the blow for charters. But prices remain expensive at almost 10 times that of first class for transatlantic routes, one operator said. That is prohibitive for many. The fragmented industry should slim down. Smaller outfits and highly leveraged groups may find the going exceptionally bumpy.More executives fly privately in the US than anywhere else. NetJets, part of Warren Buffett’s conglomerate, and Directional Aviation, diversified within the private jet business, stand to gain market share. NetJets’ closest competitor Wheels Up, a start-up yet to turn profitable, will be tested in a downturn.More troublingly, supply chain localisation triggered by the coronavirus will slacken any recovery in private business travel. But the more intriguing secular challenge is that pundits are calling an end to globalisation, of which private jets are a symbol. The most notable aggregation occurs yearly at the Davos World Economic Forum in Switzerland. The climate crisis and the rise of populism means this is a club to which fewer prominent people may wish to belong.