CONFERENCE REPORT

CJI London 2023

Business viability coupled with the sustainability record of business aviation dominated our London conference.

The viability of business aviation coupled with sustainability topics dominated

the debate among the record audience of 600-plus conference delegates.

THE VIABILITY OF business aviation and the sustainability record of the industry claimed the spotlight during our Corporate Jet Investor London 2023 conference.

During the opening presentation, Athar Husain Khan, secretary-general, European Business Aviation Association (EBAA) asked: “Is business aviation under attack?” The answer came quickly. Minutes into his keynote address, climate change protesters burst into the conference room shouting anti-aviation slogans.

Recovering swiftly from the surprise, Khan said business aviation should be proud of its achievements but could do more to promote its contribution to the global economy, to business effectiveness and to humanitarian causes, such as medical flights. “Business aviation is the Formula One of the skies,” said Khan. “It is the testbed for aviation innovation [particularly sustainability] that points the way for commercial aviation,” he told about 600 delegates.

The disruption was lent poignancy six weeks later with the news that our conference was to be one of Khan’s last public appearances. Tragically, he died unexpectedly, at just 60 years of age, on March 26th. (An appreciation of Khan’s contribution appears in this edition).

Chadi Saade, vice president Commercial, Airbus Corporate Jets conceded that the business aviation had been slow to pick up on the challenge of sustainability. “But in the past six months to a year, things have changed fast,” he said. “Sustainability is not an option [but a necessity]. We have never experienced a time when we need to change as fast as now. It's all about safety – the safety of our planet.”

Chadi Saade, Airbus Corporate Jets conceded business aviation had been slow to pick up on sustainability. But things had improved in the past six months to a year.

Between the presentations, delegates enjoyed the opportunity to meet old friends and make new ones. Marie-Laure Gassier, BNP Paribas shares a joke.

But it wasn’t just sustainability topics that dominated discussion at this year’s London conference. Staying profitable in turbulent times also framed much of the debate. Many speakers thought that while the private jet aviation market may be cooling, significant gains had been made on pre-pandemic levels. Myles Walton, MD, Wolfe Research acknowledged the business jet market may be slowing but it is still 15% to 20% ahead of 2019 levels, he said.

The North American market may continue to grow but “in Europe, they are going to have a tough time continuing to grow”, he added. OEMs are facing both supply side and certification restraints.

Growth topped the agenda for most companies. Adel Mardini, founder & CEO, Jetex said: “Last year was a massive year for us.” The company handled over 71,000 flights compared with 51,000 in 2021. Regions singled out for growth were Europe and Asia.

Rebalancing the market after the surge in business seen in 2022 was a common theme. Andy Priester, chairman and CEO, Priester & Mayo Aviation said: “We are still playing catch up. We got so far behind with the human capital infrastructure and have years of catch up, but at least it's not as bad because there aren't as many new entrants.”

Stephen Friedrich, chief commercial officer, Embraer Executive Jets thought the North American market had coped with soaring demand. “The US has been able to absorb it [rapidly rising demand] because we have the infrastructure.”

While pre-owned jet inventories are now climbing for some categories, Zipporah Marmor, vice president, Aircraft Transactions, ACASS highlighted soaring sales last year. “The surprise of 2022 was what a great year it was, after a record 2021. At the end of 2021, I thought we would never see another year like that and we saw an even better one [in 2022].”

“Last year was a massive year for us.”

Adel Mardini, Jetex

“Last year was a massive year for us.”

Adel Mardini Jetex

Zipporah Marmor, ACASS highlighted soaring sales last year, which surpassed the record year of 2021.

David Hernandez, Vedder Price warned against closing jet deals with sanctioned individuals, companies and their representatives.

Megha Bhatia, Rolls-Royce joined the panel which asked the question: Do maintenance programmes simplify or complicate pre-owned deals?

Andy Priester, Priester & Mayo Aviation said: “We are still playing catch up. We got so far behind with the human capital infrastructure that we still have years of catch up…”

Marmor added: “We had lots of clients make a lot of money in a short time during this last couple of years, selling aircraft that they bought at lower prices,” she said. “Now, we’re starting to have to work again with sellers, whereas our work in the past few years has been with buyers.”

Pascal Bachmann, senior vice president, Sales, EMEA, Jetcraft predicted: “This year will be the year of the patient buyer.” Many dismissed suggestions that pre-owned jet sales could collapse – believing the industry is more stable than before the 2008 financial crisis. But some thought prices would continue to fall while inventories rise.

Don Dwyer, managing partner at Guardian Jet and Steve Varsano, CEO, The Jet Business, based in London, and other speakers offered insights into how the market is influencing brokerages. Buyers will choose brokers more carefully as the market grows, according to Dwyer. “There are great brokers in this room and then there are some in the world who are really bad,” he said. “There has to be a filtering out process. As buyers mature, that will happen.” Varsano said good brokers ensure deals are closed before the end of the week, due to the fast-paced nature of the industry. “Nothing is the same on Monday as it was on Friday,” he said.

Matt Rosanvallon, director of Sales and Acquisitions, Freestream said: “The crazy [times] of 2021 and 2022 are over, but I still think there are strong aspects of the market. The industry has been through a roller coaster, with economic downturn and interest rates rising, and buyers are now having to wait longer for aircraft to become available.”

A warning about aircraft transactions involving Russia, following its invasion of Ukraine, was delivered by David Hernandez, shareholder, Vedder Price. Planning jet deals with sanctioned individuals, companies and their representatives could exact a very high price, he said. “Many people have dealt with sanctioned individuals in the past five years and the US government knows this. Yes, the US hunts down assets, but they also come for the people that help them too.”

Alan Cunningham, partner at EY Law said it’s important to know what you can do or not do under the sanction rules. “You can’t buy or sell in Russia,” he said. “But you can buy and sell Russian-owned aircraft as long as the individual is not sanctioned. Essentially, you cannot sell aircraft that will fly in Russia.”

The many networking sessions enabled delegates to relax over a cocktail as they discussed the day’s events.

“There are great brokers in this room…”

Don Dwyer, Guardian Jet

“There are great brokers in this room…”

Don Dwyer Guardian Jet

Taking part in the From Russia With Sanctions panel were (L to R) Alan Cunningham, EY Law,

David Hernandez, Vedder Price, Jonathan Russell, Jaffa & Co and Heather Gordon, Martyn Fiddler.

Returning to sustainability, in the medium to long term, innovative research and new technologies, such as electric and hydrogen propulsion, offered scope to cut or eliminate the industry’s carbon footprint ahead of the zero emissions target of 2050. But for now, Sustainable Aviation Fuel (SAF) offered the best practical means to cut emissions (alongside carbon offsetting schemes) and to be seen to do so by global opinion, according to speakers.

Nancy Bsales, chief operating officer with the sustainability consultancy 4Air highlighted business aviation’s pioneering role. “What you have to remember is that we are the people who are laying the foundation for the rest of aviation,” she said. But high prices and low availability meant sustainable fuels faced a big challenge. “We are only at 1% of the global need for SAF today,” said Bsales. “We are hoping for 10%-12% [SAF use] by 2030 and to continue to grow from there. But you have to be patient with the progress made.”

Corporate interest in SAF was confirmed by Elouisa Dalli, senior vice president, Marketing and Communications, Jet Aviation. “You are seeing corporate flight departments use SAF to meet their ESG [environmental and social governance] targets. Some are even going as far as 100% using the book-and-claim system."

New legislation is becoming a big incentive to invest in SAF now, said Jonathan Wood, vice president, Renewable Aviation, Neste. “Policy is going to be incredibly important. In the EU, around 2% of all aviation fuel will need to be SAF by 2025.” Over the next year, Neste plans to boost SAF availability 15-fold.

Audience Votes:

CJI Sponsors

Event partners

Action Aviation

Gama Aviation

Gogo Business Aviation

Jetex

JSSI

Stonebriar Commercial Finance

Lead sponsors

2-REG

AE Industrial Partners

AIC Title Service

Air bp

ARGUS International

Boeing Business Jets

Bombardier

Collins Aerospace

Freestream Aircraft

GE Aerospace

Global Jet Capital

Guardian Jet

Jaffa & Co

Jet Aviation

Mytaverse

OneWeb

Pratt & Whitney

Priester Aviation

Rolls-Royce

TAG Aviation

Textron Aviation

Vista