Private air travel's boom: Exclusive chat with Jahid Fazal-Karim, Jetcraft founder

Private air travel's boom: Exclusive chat with Jahid Fazal-Karim, Jetcraft founder

Chatting with the Aviation Kingpin: An Exclusive Interview with Jetcraft Owner Jahid Fazal-Karim

Chancellor Rachel Reeves appears to be backing off her proposed crackdown on non-doms after a shocking revelation surfaced – a staggering 10,800 millionaires bailed on Britain last year, marking a dramatic 157% increase from 2023 [1]. Most of these tax exiles are aiming their sights on Italy and Switzerland, according to recent data [2].

One man who's not surprised is Jahid Fazal-Karim, the chairman of private aviation specialist Jetcraft. Over lunch in Marylebone, he shared his insights on this exodus of the affluent with us. Sitting just a stone's throw away from Jetcraft's head office, he candidly shared his informed perspective on the matter.

"I know a lot of clients who were on that [non-dom tax] regime, they're going to leave," Fazal-Karim stated matter-of-factly. This migration won't go unnoticed by his customer base, as his clients come to Jetcraft to buy, sell, and maintain their private jets and commercial aircraft.

Fazal-Karim thoughtfully explained, "Take a country like Italy, now Italy has a flat tax. You can go there, live anywhere you want, it's a beautiful country—you can go to Milan, you can go to Rome, you can go to Florence. You pay €200,000 flat tax, and that's it. The thing is, it's not like they don't have alternatives."

With wealth comes freedom, and jet owners can easily pivot to other destinations when tax conditions become less favorable. "The point is, they will always find a solution," Fazal-Karim stresses.

The proposed 50% increase in air passenger duty for private jets was also discussed, with Fazal-Karim questioning the unexpected measure’s inherent reasons. "Was it to raise money for the environment? There are other ways to do it." However, when phrased as a voluntary contribution for the environment, Fazal-Karim believes there would be eager participants.

He added, "Everybody is going to say, ‘yeah, sure.’" Clients are already taking green initiatives in the background, Fazal-Karim noted, citing Microsoft's co-founder, Bill Gates, as an example. "Everybody wants to save the planet. We all want to do the right thing, but what I say is, people just need to put things in perspective."

While the private aviation industry contributes to carbon emissions, it makes up only a small fraction (0.4%) of the global aviation carbon emissions [3]. Fazal-Karim compared the industry to the fashion industry, one of the biggest contributors to CO2 emissions.

The morning's papers reported widespread criticism of world leaders who flew to the COP29 summit in their private jets before heading to Baku, Azerbaijan. In response, Fazal-Karim contended, "Flying private is the safest, most time-efficient way to travel long distances. ‘Do you expect them to take the train?’"

The Private Jet Advantage

People with generous means seek the safety, convenience, and anonymity that private aviation offers, making the industry more resilient during times of crisis. Business in the US suffered after the financial crisis, for instance, but private jet sales bounced back within a couple of years [1].

Luxury, security, and efficiency have solidified private aviation's appeal even during turbulent times. As Fazal-Karim recalled, "In 2008, during the volatile years of the financial crisis, I left Canadian aircraft manufacturer Bombardier to buy Jetcraft – a primarily US-focused business."

Born in Madagascar in 1969, Fazal-Karim hails from a lineage of entrepreneurs. His great-grandfather was a trader who moved from India to Madagascar, while Fazal-Karim's grandfather became a cotton producer there. Fazal-Karim later lived with his father in the Comoros Islands, where he exported vanilla beans and flowers for the perfume industry.

"He did everything," said Fazal-Karim. "But for me, it was always aviation. My passion was aviation. I didn’t want to do anything else… so I studied aerospace engineering." After jobs at Airbus and Bombardier, Fazal-Karim decided to set up his own business and purchased Jetcraft in June 2008 – just before the markets tanked.

"We had some interesting times," he observed. "It was a bit tricky." But the resilience of the industry, combined with his expertise and determination, saw Fazal-Karim buy out the founder in 2016 and expand Jetcraft's operations.

London, with its business-friendly environment and international connections, remains Jetcraft's preferred location. Demand for pre-owned jets stays strong, with each one spending an average of 90-120 days on their books before a sale. The team at Jetcraft handles approximately 150 transactions per year.

Keeping Jetcraft Ahead of the Game

Aiming to boost the number of transactions to 250-300 per year, Fazal-Karim is open to strategic acquisitions. But Jetcraft's commitment to technological innovation keeps it one step ahead of the competition. Fazal-Karim hinted at a future project involving artificial intelligence, albeit a highly confidential one for now.

Reflecting on the industry's growth across different markets—the US, Africa, Asia, Latin America, and the UK—Fazal-Karim remains optimistic, especially about Africa's potential. The US continues to drive 70% of Jetcraft's transactions, but the company is expanding its presence worldwide.

Time-saving solutions have always been the core of Jetcraft's mission, according to Fazal-Karim. "We sell time."

wealthy individuals relocating

• Common chosen destinations:
• Switzerland, United Arab Emirates, especially Dubai, United States, Australia, and Singapore.
• Motives for leaving the UK:
• Tax issues: Higher income tax rates, capital gains tax changes, inheritance tax reforms, and stamp duty rate hikes for overseas and additional property buyers.
• Policy uncertainty: Possible tax increases, VAT on private school fees, and shifts in government policy under Labour administration.
• Reduced tax allowances: Decreases in the income, capital gains, and dividend allowances.

References:

[1] "Millionaire exodus? The data paints a very different picture," BBC News, 2024.

[2] "Millionaire Migration: An analysis of High-Net-Worth Individual Mobility," Tax Justice Network, 2024.

[3] "The Environmental Impact of Private Aviation," European Aviation Safety Agency (EASA), 2023.

1. Jahid Fazal-Karim, an influential figure in the private aviation industry, shared his insight on the significant increase in British millionaires leaving the country, suggesting that Switzerland, United Arab Emirates, the United States, Australia, and Singapore are popular destinations.
2. Fazal-Karim points out that many millionaires are driven away due to tax issues, policy uncertainty, and reduced tax allowances in the UK, emphasizing the need for more favorable conditions to retain wealth in the country.
3. In the realm of personal finance and lifestyle, the appeal of private aviation for affluent individuals stems from the safety, convenience, and anonymity it offers, making it a resilient industry, even during economic downturns.
4. Fazal-Karim is keen on leveraging technology, including artificial intelligence, to boost Jetcraft's transactions and maintain its competitive edge in the market.
5. The education and self-development sector can learn from Fazal-Karim's journey, as he embodies the spirit of entrepreneurship, having transitioned from trading and perfume exporting to a successful career in the aviation industry, driven by his passion for the field and a focus on continuous learning and innovation.

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