A Few Surprises on the Popular Private Jet Routes List

With its density of wealth and internal economic connections, the US remains the world’s most important private jet market by some distance, according to Knight Frank’s 2013 Wealth Report. This dominance is reflected in the globe’s busiest private jet routes, where 60% of the traffic starts and ends in the US.

The report confirms that Europe is the second-largest market, at around 25% of the US. Russia continues to represent a significant portion of overall European demand. Moscow is among the top 10 routes with highest hours flown, reflecting the ongoing importance of Russian wealth in luxury property markets in Europe and the US.

The UK’s capital city’s dominant performance in Europe as an investment destination is confirmed by the fact that 30% of the most popular routes in this region either start or finish in London. The synergy between New York and London is greater than ever, with traffic on this major route increasing every year. While Dubai and the broader UAE are seeing increasing traffic, the Middle East’s position as the world’s third-largest market is being challenged by the rise of traffic in China and Brazil.

Traffic from Brazil to Europe has grown 20% each year since 2010, with the main destinations including France, Spain, Portugal and the UK – reflected by luxury property investment purchases by Brazilian buyers during 2014. Africa is a more fragmented market, although Nigeria has become a major private jet hub – with flights to and from Lagos making it into the list of the top 10 fastest-growing global routes. Anticipating wealth flows from one part of the world to another has become an industry in itself.

Looking at the latest trends on the most popular flight routes, there is a clear synergy between established market routes and investment flows – with London and New York having one of the closest prime property relationships as well as flight paths. The most insightful data comes when we look at emerging-market demand. Latin American investment in Europe, for example, has long been overshadowed by the huge waves of investment flowing into Miami and other US hotspots.

The breadth of popular routes flown into key EU markets from Brazil, but also Argentina and other key southern American hubs, reveals a closer relationship between these markets than is often recognised. The huge potential for demand for property in Europe, and also in North America, from investors based in Asia, Africa, the Middle East and Latin America is hinted at by the new growth routes.

Maiquetia, Venezuela to Miami is a new emerging route. Maiquetía Airport is about 21 kilometres (13 mi) from downtown Caracas, the capital of Venezuela. Simply called Maiquetía by the local population, it is the main international air passenger gateway to Venezuela among the twelve international airports in the country. It handles flights to many important destinations in the Americas, the Caribbean and some in Europe.

The economy of Venezuela is largely based on the oil sector and manufacturing. Revenue from oil exports accounts for more than 50% of the country's GDP and roughly 95% of total exports. Venezuela is the fifth largest member of OPEC by oil production.A 50 percent decline in oil prices in the past seven months has slashed the amount of dollars available for many to import basic goods. Shortages of everything from medicine to beef reached record levels this year, with hundreds of people lining up outside supermarkets and pharmacies.
Gross domestic product will contract 7 percent in 2015, the biggest decline in Latin America, according to the International Monetary Fund.

Venezuela ranks #10 in the world for registered private jets, sitting at 168. Most of them being 1980 Cessna Citations, a few 1975 Dassault Falcon 10s. One of the Venezuelan billionaires is 55 year-old Juan Carlos Escotet, founder of banking empire Banesco and owns a Bombardier Challenger 300, which is registered in the US. Escotet uses this to jet into Miami, Panama, Puerto Rico, Colombia and Dominican Republic.

Miami's finance scene may never blossom into "Wall Street South" -- but recent efforts to attract hedge funds, family offices and other investment firms to South Florida are starting to pay off.

Florida's beautiful weather and a favorable tax climate for the rich have always enticed wealth from other places.

Now Miami's hot downtown, bristling with condos and culture for the first time, is playing a part too.

Miami has become a major destination for high-worth individuals from the Northeast, Latin America and Europe. Some of these people live there permanently, own second or third homes, or are just passing through. Art Basel has brought many of these affluent people into Miami and consequently they have bought Real Estate.

Attracted by the whales, smaller fish see Miami as a place to thrive.
Even though it means more competition, local players welcome the change. Traditional banking, once the cornerstone of Miami finance, has been in decline because of new regulations and disclosure laws for overseas clients.

Miami now has a solid financial infrastructure: law firms, accountants and banks that can support a variety of financial services companies.
Ian McCluskey is a vice president at Newlink Group, which recently started a financial services practice in Miami. Over the past month, McCluskey has conducted a survey to gauge the growth of financial firms here.

He compares their evolution to the local tech sector.
"For a long time you had people in Miami saying we were becoming a tech hub, but the narrative was ahead of the facts in many ways," McCluskey said. "Now you could argue that the facts have caught up to the narrative in tech. I think we're getting to that point with finance too.”

By McCluskey's count, which he arrived at by scouring private databases and interviewing finance executives, Miami is now home to 13 investment banks, 19 private-equity firms, 60 hedge funds and 63 wealth management firms.

McCluskey estimates that Miami also has more than 200 family offices -- private companies that manage money for one or more wealthy families with assets of at least $50 million.

The number of wealthy families from New York and Latin America who spend time in Miami makes it an attractive landing spot for financial managers, said Richard Wilson, founder of the Family Office Club, an advisory firm that recently relocated from Portland, Oregon, to Key Biscayne.

Wilson considered moving to New York, Singapore, the Bahamas, Monaco and San Diego. "But Miami made the most sense," he said.
New York, Chicago and San Francisco have the most family offices in the U.S., Wilson said, although statistics are hazy because family offices have traditionally been secretive and informal affairs.

"But Miami is probably next on that list with Houston, which has a lot of families in the oil business," he said. "And even with all that activity there's still an untapped market here. “

McCluskey estimates the total assets managed by the private wealth industry in South Florida at about $300 billion. This explains why Miami and west Palm Beach have become a major destination for private jet travel.

Fabrizio Poli is an Aviation Analyst & Managing Partner of Boutique Aviation Company Tyrus Wings. He is also an accomplished Airline Transport Pilot having flown both private Jets and for the airlines. Fabrizio is also a bestselling author and inspirational speaker. You can tune in weekly to Fabrizio's business Podcast Living Outside the Cube.Fabrizio can be reached on:

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