Since the onset of COVID-19, the aviation industry has seen a boost in private aviation and as such, private aviation insurance has been along for the ride. Families with enough income that would have otherwise travelled commercial, saw the health and convenience benefits as worth the extra costs in light of the pandemic.
However, for most families it seems that private air travel is still out of reach. Yet, advancements in aviation technology pose an opportunity to make private air travel as affordable as current commercial airlines. One California-based company would completely disrupt the commercial market if it lives up to the hype and I’d like to use that company as a guide to discuss the future of private aviation and private aviation insurance. So let’s jump right in.
Disrupting the Future of Private Aviation
Otto Aviation is the California based company that is hoping to disrupt the future of both private aviation and commercial air travel. They plan to do that with their new Celera 500L aircraft. The aircraft looks like a vehicle straight from the future with its sleek design. However, it is the cost savings that stands to make the largest impact on the future of private aviation.
The company claims that it will have 80 percent lower emissions than most business jets of the same size as well as about one-sixth the operating costs. Moreover, the aircraft has the ability to fly between most any two U.S. cities in the continental U.S. It can accomplish this because while most similar-sized jet aircraft can only get 2 to 3 miles per gallon, the Celera can get 18-25 miles per gallon.
Now, this would drastically reduce the per hour cost of private travel. In fact, early estimates are that it could get operating costs down to a little over $300 per hour whereas current private aircraft of a similar size operate at around $2,100 per hour. That means the budget for private air travel suddenly becomes comparable to a small family attempting to travel on current commercial airliners.
What’s the Impact on Private Aviation Insurance
It is a general rule of thumb that the more people that buy into an insurance pool, the better off it is for everyone involved. Insurance companies have more funds to cover losses and that tends to drive down premium costs barring in increase in catastrophic losses. So in the aviation insurance industry, we are anticipating that private air travel will become more common as technology makes it more affordable to the average family. COVID-19 has already pushed some families towards private air travel and once you experience the joy and freedom of private air travel, it is hard to go back to fighting for leg space on a crowded commercial liner.
Here at BWI Aviation Insurance, we pride ourselves on anticipating the future of the market and working hard to make sure our clients have the best coverage for the best rates. We’ve been doing it for over 40 years as a family and veteran owned operation and if it flies, we can find coverage for it.
As it pertains to private aviation and the trend we are seeing, we believe it is generally a positive thing for both consumers and pilots. Private aviation insurance will be a major part of this trend by keeping private air travel affordable and properly covered for when the worst happens. If you are currently in the private insurance game or looking to break into it as a result of these trends, reach out to the team at BWI and we’d be honored to be a part of your private aviation journey.
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