Online again – Jets and Foreign Exchange

Firstly I must apologise for the stunning silence over the past few months. A combination of lots of other things going in life; working with several investments (e.g. a private jet business www.planechartering.com ) and setting up a couple of businesses (e.g. my foreign exchange business www.rabbitfx.com )

I have been asked by numerous people – “Is this the right time to start a business and / or investing with all the economic doom and gloom going on?” personally I think so, if you concentrate on “cycle orientated” ideas – for example, the amount of distressed debt funds being setup, dollar denominated commodities etc.

One industry sector which does appear to have been pretty insulated from the current situation is private jets. Whilst over the past 6 months there have been several airlines going bankrupt (e.g. MaxJet and others) there have been numerous column inches in the FT on new investments in the private jet sector.

Why? A couple of key factors:

• The cost of private jets is decreasing (it is still expensive, just now less so) driven by demand and new innovations.
• A general frustration with the level of queuing and security in main hub airports
• Emerging markets in large countries (in terms of space) like Russia and China where the internal airline infrastructure is still pretty nascent
• General productivity boost for senior managers – believe it or not, actually saving T&E costs through private jet travel (e.g. less hotel bills)

JP Morgan released a research report on this topic a few weeks back which pretty much concurs with this assessment.

However, in the large private boat market, there are definitely signs of the current economic situation. Not so much from order books of ship yards (if you can afford to buy one of these things you are pretty much insulated from the current economic situation) but in charter business.

Normally on the Cote D’Azur (South of France) all the charter slots are filled by now, but currently they are around 30% un-filled. There are even some berths and boats available during the Monaco Grand Prix which is pretty much un-heard of.

Perhaps lastminute.com should setup a business called LastMinuteSuperYachtcharter.com – looks like there will be plenty of bargains this year.

~ by Nigel on May 7, 2008.