CJI LONDON CONFERENCE REPORT
Disruption, opportunity and the ‘Trump Bump’
Disruptive change is reshaping global business aviation. Our London conference explored its impact. Words: Mike Stones
CJI LONDON CONFERENCE • REPORT
Disruption, opportunity and the ‘Trump Bump’
Disruptive change is reshaping global business aviation. Our London conference explored its impact. Words: Mike Stones
A RISING TIDE of disruption is sweeping business aviation. In its wake follow opportunities and threats, according to speakers at our CJI London 2025 conference in February. Key topics included the new generation of business jet clients, emerging markets, changing aircraft values and the “Trump Bump”.
The benefits of President Trump’s second tenure at the White House were apparent quickly, said some. “We definitely saw a Trump Bump,” noted Joan Roberts, vice president of Insured Aircraft Title Service. “We were less than 1% off our 2023 numbers for closings in the fourth quarter. It was so busy we had to turn away deals. January was also a very strong month to start out the year.” That would not have happened without a Trump victory in the US presidential elections last November, she added.
A leading hotel hosted CJI London 2025.
Doug Gollan returns the microphone (disguised as a rugby ball) to the stage.
Speakers also looked forward to the possible return of 100% bonus deprecation and other tax benefits. “From a tax perspective, it’s good news,” said David Hernandez, shareholder at law firm Vedder Price. “The tax moves [audit plans] the Biden administration tried to put in place will now grind to a halt. Many FAA staff will wonder if they still have a job.” Less positive are the president’s plans for tariffs. Opinions about their impact ranged from mild concern to deep-seated fear. (More about this later).
“We are in a Golden Age of executive aviation,” was the upbeat assessment of Steve Friedrich, chief commercial officer, Embraer Executive Aircraft. For evidence he highlighted the fundamental strength of the global economy, corporate profits, wealth accumulation and transfer and the retention of first-time buyers. “Everything is lined up, despite the fact that the backlog is growing,” he adds. “Right now, demand is rock solid. The first-time buyers have stayed with us, they’re sticky.”
Matt Rosanvallon of Freestream Aircraft said their business expects to close about 70 to 75 aircraft transactions every year.
As Baby Boomers (born between 1946 and 1963) begin to transfer wealth to their children, Embraer expects to see 1.2m people in North America with a net worth of more than $5.3m. This spelled good news for business aviation, said Friedrich. “We are seeing more people come into aviation and say it’s a productivity tool – not a luxury – because it helps to grow the economy.”
Aside from the dominant market of North America, Embraer saw the potential for strong growth in the Middle East – particularly Saudi Arabia – and India. This week Saudi Arabia’s General Authority of Civil Aviation (GACA) opened its domestic private aviation market to international operators by announcing the removal of cabotage restrictions for foreign on-demand charter flights within the kingdom.
Puja Mahajan, Azzera makes a point during the panel session entitled Getting business aviation to carbon neutral.
“Saudi has already taken off, we don’t need to wait for 2025 to see that,” said Vincent Rogier of Jet Aviation. “We see the country changing, it’s a very exciting region and there are a lot of opportunities in that space.” Despite Europe being described as “the problem child” due to the growing raft of regulations, according to some, Rogier was more positive: “We should not forget Europe. There is a huge amount of wealth and a lot of opportunities in that space as well … from new buyers and a replacement market.” Business aircraft flights in Europe are predicted to grow by just 0.3% this year, said Argus International.
Airbus Corporate Jets expected big demand from the Middle East this year. Eric Julien, deputy vice president, Commercial Airbus Corporate Jets also expected growing demand in southeast Asia and described the US as the “next new frontier” for the OEM.
Dissecting aircraft values, Matt Rosanvallon, sales and acquisition director at Freestream Aircraft described the market as “robust,” for the business which expects to close 70 to 75 aircraft transactions each year. Inventory climbed by about 7% last year, he added.
Parting smile from Steve Varsano, The Jet Business at the end of the discussion Rethinking Engine PPIs.
“You must know what you are buying in terms of scale, capability and cashflow.”
Marwan Khalek, Gama Aviation
The retirement of Baby Boomer business owners (both operators and brokers) is also creating opportunities to boost growth via mergers and acquisitions. The veteran of up to 25 deals, Marwan Khalek, CEO, Gama Aviation reported: “No more than a handful were less successful than we would have hoped.” His advice was: “You must know what you are buying in terms of scale, capability and cashflow. You have to keep your eyes open.”
The key importance of nourishing relationships during M&A deals was highlighted by Andy Priester, chairman, George J. Priester Aviation. “It can be a vulnerable transition and our industry is littered with companies that proved to be unsuccessful,” he said. “You have to focus a tremendous amount of time on the quality of your relationships, both in good times and bad.”
New technology is also creating opportunities and lifting safety standards in business aviation, said Lannie O’Bannion, senior vice-president of Global Sales and Flight Operations,
Textron Aviation explained how the latest Cessna Citation M2 Gen3, CJ3 Gen3, and CJ4 Gen3 business jets are equipped with the Garmin Emergency Autoland system, introduced in response to consumer requests. “We were able to bring the Autoland feature to our owner-flown segment because the customers were asking for it,” said O’Bannion. “We were able to collect that information and make it happen.”
Disruption of a less positive kind took centre stage in the discussion of pre-purchase inspections (PPIs). Correctly used, PPIs can help buyers avoid potentially expensive mistakes in buying aircraft with significant defects. But too often, brokers acting for the buyer could push for deeper inspections than were required – sometimes requiring borescope inspections. This risked both adding unnecessary costs for vendors and collapsing deals.
“If you’re on an engine programme, to go and look for a problem when no problem is obvious, [revealed by the required inspections] you’re asking for trouble,” said Steve Varsano, founder of the aircraft brokerage The Jet Business. “It doesn’t make any sense. Some people are trying to be heroes, to look good in front of their client.”
The advice from Delray Dobbins, director of Global Strategy, Engine Assurance Program was clear: “You do not need to borescope your engine to prove it is airworthy. If there are no squawks [problems] in play and it is not due an overhaul according to Chapter 5 [Air Transport Association Classification], that’s an airworthy engine. If a buyer wants an engine 100% within tolerances, buy a new aircraft.”
Thirty of business aviation’s finest: Delegates throng the stage after attending our Women in Business Aviation reception at CJI London 2025 conference.
Thirty of business aviation’s finest: Delegates throng the stage after attending our Women in Business Aviation reception at CJI London 2025 conference.
A continuing source of disruption was blockages in industry supply chains, with Friedrich at Embraer acknowledging they had “restrained growth”. Part of the manufacturer’s solution is longer-term planning, forging stronger links with suppliers and even embedded key staff in their suppliers’ organisations. “Just-in-time inventory is dead. We have sent our best engineers into the supply chain,” he said.
Many speakers highlighted the critical shortage of pilots and airframe and power plant engineers, which was disrupting service and adding to costs.
The importance of sustainability topics divided industry opinion, according to a survey of 16 business jet owners conducted by TAG Aviation. Most owners did not think sustainability was a priority, according to Karl Mills, chief operating officer. But that does not mean it was regarded as unimportant to owners. “Corporate owners especially were very concerned with their sustainability, but the green practices of their business must come first rather than simply putting sustainable aviation fuel [SAF] in the back of their jet,” he said.
Also, owners would be happy to use SAF or boost their existing consumption if the fuel was more readily available.
Kurt Edwards (right), from IBAC explains the funny side of global regulation to Alasdair Whyte, of CJI.
THE NEW 'GOLDEN AGE'
Steve Fiedrich from Embraer Executive Aircraft told delegates: “We are in a Golden Age of executive aviation.” For evidence, he highlighted the fundamental strength of the global economy, global profits, wealth accumulation and transfer and the retention of first-time buyers.
Sustainability is not “all about green meadows and rainbows”, said Kennedy Ricci, president of 4Air. Carbon neutrality can be achieved today by using schemes such as carbon offsets, SAF and other measures, he said.
The prospect of US tariffs concerned many speakers. President Trump had imposed 25% tariffs on imports, including aviation products from Canada and Mexico and 10% on goods from China but then delayed their implementation.
“A huge risk” and potentially “an enormous impact” on inflation was the verdict of Bruce Marshall, executive vice president, AIC Title Service. Aircraft contracts should be updated to reflect the potential additional costs of tariffs, advised Tobias Kleitman, president, TVPX. The people responsible for paying the tariff will be the importer of record and the ultimate consignee or buyer.
Rosanvallon at Freestream said tariffs could “throw a wrench” into business aviation. Friedrich, from Embraer, borrowed a military term to describe them as “reconnaissance by fire”.
London: Audience Votes
