4 Megatrends
Making the market for business jets
In an age of wall-to-wall sound, it can be hard to hear the mood music shaping the market for business jets. Alasdair Whyte identifies four megatrends that will drive the market over the next decade.
4 Megatrends
Making the market for business jets
In an age of wall-to-wall sound, it can be hard to hear the mood music shaping the market for business jets. Alasdair Whyte identifies four megatrends that will drive the market over the next decade.
1. The age of experiences
• Experiential Travel
• Documenting
• Customer service
IT DOES NOT not matter how many times you have abseiled or if you have personally checked-the belay points. There is always a millisecond – a brief flash – when your brain asks you if you really know what you are doing. It happens just as you lean back, feel the rope take the strain and move your first foot down from the edge.
It is even worse when you are abseiling into one of the world’s last unexplored volcano craters. When you can hear your breath rattling through the mask that is keeping out toxic fumes and everything is illuminated by the red glow from the magma hundreds of metres below you.
This may sound like something from a nightmare. But it was a dream holiday for one client. After finding a new route into the crater – The Son of Benbow in Vanuatu – she piloted the helicopter back to the superyacht. She, her security guards and the team from Based on a True Story, a specialist adventure and luxury travel company that organised the experience, then went and met members of a local tribe. Well, after they mock-ambushed the group. The trip ended back on the yacht with diving and amazing underwater photography of basking sharks.
The reason the client keeps returning (and this was her sixth trip with the company) is to experience something unique. Seeing a volcano from the edge is not the same as finding a new route to the bubbling lava lake. And it was a unique visit; a rock fall means that no one will be able to follow her footsteps.
VistaJet has teamed up with Based on a True Story and other specialists to create VistaJet World – a series of experiences for members. They split them into different categories including – adventure; art and music; and dining discoveries (including the opportunity to eat with Sumo wrestlers). But they also offer philanthropic trips. One Based on a True Story project is the opportunity to fund and help with the search for a lost city in a Colombian National Park. And with those focused on conservation and animal protection, you can help fund and fly in an autogyro that is helping to track rhino poachers.
The rise of experiential travel is a huge opportunity for everyone evolved in business aviation.
The term ‘experience economy’ is more than 20 years old. It was first used by Joseph Pine and James Gilmore – two academics – in 1998. They argued that this was a natural function of a maturing society. Societies would start by extracting commodities, then making goods, delivering services and then staging experiences.
“An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event,” wrote the academics.
This may sound too theoretical. But market research firm Euromonitor expects the experience economy to be worth $8trn by 2030.
Most of the largest business aviation companies have, like VistaJet, been staging amazing experiences for customers for many years. The easiest way to play tennis with Roger Federer is to become a NetJets member. (The other more arduous option is to practice for years and then turn professional.) Chef Bobby Flay personally overseas the Sentient Jet breakfast at The Kentucky Derby. Wheels Up hosts a must-attend Superbowl Tailgate Party with former players each year. FlexJet even has a partnership with the Human Longevity Institute, which aims to integrate genomics into lifestyle. (We are not sure what that means either – but it is certainly exclusive).
This is one area where business aviation is leading other industries – and can keep this leadership. But it does not have to be limited to large companies. Small airports and FBOs can create an experience by serving local specialities (or coffee with your face printed on it; as Jetex does). Operators can change catering menus more regularly and highlight small providers. Flying on a private jet is an amazing experience. But when you have flown on a business jet a few times it gets less exciting. The challenge is to keep surprising customers who already have high expectations.
Business aviation is well positioned to benefit from the rise in experiential travel. Destinations like Iceland, Venice and the Kimono Islands are all looking as if they are suffering from too many tourists. Business aircraft can get passengers to areas unserved by airlines.
One other thing to think about is helping customers to document the experience. Based on a True Story creates an amazing hand-bound luxury coffee book with amazing photography (you can see some of it here) after each trip. This is clearly not practical for every flight, but airlines like Emirates are encouraging passengers to take and share photos – they even have polaroid cameras in business and first class.
Forget the old line about a tree falling in a wood, for many social-media addicts an experience has not happened if has not been shared on Instagram. Having your company’s logo positioned for photos and training your crew to clean lenses and change settings on phones can all help.
The line between a service and an experience is tiny. Amazing customer service can easily turn a routine trip into something you remember – and rave about. Volcanoes are optional.
The age of experiences
• Experiential Travel
• Documenting
• Customer service
IT DOES NOT not matter how many times you have abseiled or if you have personally checked-the belay points. There is always a millisecond – a brief flash – when your brain asks you if you really know what you are doing. It happens just as you lean back, feel the rope take the strain and move your first foot down from the edge.
It is even worse when you are abseiling into one of the world’s last unexplored volcano craters. When you can hear your breath rattling through the mask that is keeping out toxic fumes and everything is illuminated by the red glow from the magma hundreds of metres below you.
This may sound like something from a nightmare. But it was a dream holiday for one client. After finding a new route into the crater – The Son of Benbow in Vanuatu – she piloted the helicopter back to the superyacht. She, her security guards and the team from Based on a True Story, a specialist adventure and luxury travel company that organised the experience, then went and met members of a local tribe. Well, after they mock-ambushed the group. The trip ended back on the yacht with diving and amazing underwater photography of basking sharks.
The reason the client keeps returning (and this was her sixth trip with the company) is to experience something unique. Seeing a volcano from the edge is not the same as finding a new route to the bubbling lava lake. And it was a unique visit; a rock fall means that no one will be able to follow her footsteps.
VistaJet has teamed up with Based on a True Story and other specialists to create VistaJet World – a series of experiences for members. They split them into different categories including – adventure; art and music; and dining discoveries (including the opportunity to eat with Sumo wrestlers). But they also offer philanthropic trips. One Based on a True Story project is the opportunity to fund and help with the search for a lost city in a Colombian National Park. And with those focused on conservation and animal protection, you can help fund and fly in an autogyro that is helping to track rhino poachers.
The rise of experiential travel is a huge opportunity for everyone evolved in business aviation.
The term ‘experience economy’ is more than 20 years old. It was first used by Joseph Pine and James Gilmore – two academics – in 1998. They argued that this was a natural function of a maturing society. Societies would start by extracting commodities, then making goods, delivering services and then staging experiences.
“An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event,” wrote the academics.
This may sound too theoretical. But market research firm Euromonitor expects the experience economy to be worth $8trn by 2030.
Most of the largest business aviation companies have, like VistaJet, been staging amazing experiences for customers for many years. The easiest way to play tennis with Roger Federer is to become a NetJets member. (The other more arduous option is to practice for years and then turn professional.) Chef Bobby Flay personally overseas the Sentient Jet breakfast at The Kentucky Derby. Wheels Up hosts a must-attend Superbowl Tailgate Party with former players each year. FlexJet even has a partnership with the Human Longevity Institute, which aims to integrate genomics into lifestyle. (We are not sure what that means either – but it is certainly exclusive).
This is one area where business aviation is leading other industries – and can keep this leadership. But it does not have to be limited to large companies. Small airports and FBOs can create an experience by serving local specialities (or coffee with your face printed on it; as Jetex does). Operators can change catering menus more regularly and highlight small providers. Flying on a private jet is an amazing experience. But when you have flown on a business jet a few times it gets less exciting. The challenge is to keep surprising customers who already have high expectations.
Business aviation is well positioned to benefit from the rise in experiential travel. Destinations like Iceland, Venice and the Kimono Islands are all looking as if they are suffering from too many tourists. Business aircraft can get passengers to areas unserved by airlines.
One other thing to think about is helping customers to document the experience. Based on a True Story creates an amazing hand-bound luxury coffee book with amazing photography (you can see some of it here) after each trip. This is clearly not practical for every flight, but airlines like Emirates are encouraging passengers to take and share photos – they even have polaroid cameras in business and first class.
Forget the old line about a tree falling in a wood, for many social-media addicts an experience has not happened if has not been shared on Instagram. Having your company’s logo positioned for photos and training your crew to clean lenses and change settings on phones can all help.
The line between a service and an experience is tiny. Amazing customer service can easily turn a routine trip into something you remember – and rave about. Volcanoes are optional.
Additive manufacturing is transforming aircraft and engine design.
Additive manufacturing is transforming aircraft and engine design.
IF YOU WANT TO see the future of flight you need to go to Rwanda in Africa. Since 2016, Zipline, a US company, has been using autonomous drones to deliver blood, vaccines and snake antivenom across the country. The company – now valued at more than $1.2bn – has used drones to make more than 28,000 crucial deliveries by parachute in Rwanda alone. It will soon start operations in the Philippines.
Zipline uses advanced manufacturing and materials to make its aircraft light. The aircraft are fully autonomous and connected to the Internet of Things; launch technicians use iPhones to activate flight control systems before flights (these have QR codes printed on them) – and a computer programme checks they are working. The aircraft are launched using a winch and land with a catch rope (it is worth watching this on YouTube).
Safety is also a priority. The company has worked closely with the Rwanda Civil Aviation Authority. The aircraft fly low and missions can be aborted quickly with a parachute being activated.
Zipline is a great example of the Fourth Aviation Revolution in action.
The term Fourth Industrial Revolution was first used by Klaus Schwab, the founder of the World Economic Forum, to describe the “new ways in which technology becomes embedded within societies and even our human bodies”. These technologies include: additive manufacturing; artificial intelligence; biotechnology; virtual/augmented reality; the Internet of Things; blockchain and many others. Together these technologies – often driven by other industries – are driving the Fourth Aviation Revolution.
A Zipline aircraft can carry only three blood bags. But soon we will see electric aircraft flying around cities carrying people (and a lot more carrying cargo). The cost of training a pilot will fall significantly thanks to virtual reality and electric aircraft. Biotechnology will lower the costs of sustainable fuel.
Existing aircraft will also be transformed. Aircraft monitoring combined with artificial intelligence (creating digital-twin engines) will reduce unplanned maintenance to zero.
Additive manufacturing will simplify engines. GE holds the honour of having the first 3D printed part on an engine to be certified by the US Federal Aviation Administration. The part involved was a housing case for a sensor which provides temperature and pressure readings for the GE90-94B engines used on Boeing 777-200ERs.
“When we were designing that, we executed well over 250 different design iterations. And when I say iterations, I mean designed, built and tested those iterations,” says Josh Mook, innovation leader, GE Additive. “And that is so important because normally in a combustion development programme you may only get a handful of iterations to do. And combustion, as an example, is still on that border between science and art, where combustion is a very complex phenomenon that we cannot fully simulate. So there really is no substitute for testing.”
New technologies will (finally) make operating aircraft easier. And owners and passengers will insist on digital systems.
But it will not happen tomorrow.
Revolutions always take time. Even the French one took 10 years. And they had the guillotine to speed things up.
The Fourth Industrial Revolution
• Drone deliveries
• Additive manufacturing
• AI
IF YOU WANT TO see the future of flight you need to go to Rwanda in Africa. Since 2016, Zipline, a US company, has been using autonomous drones to deliver blood, vaccines and snake antivenom across the country. The company – now valued at more than $1.2bn – has used drones to make more than 28,000 crucial deliveries by parachute in Rwanda alone. It will soon start operations in the Philippines.
Zipline uses advanced manufacturing and materials to make its aircraft light. The aircraft are fully autonomous and connected to the Internet of Things; launch technicians use iPhones to activate flight control systems before flights (these have QR codes printed on them) – and a computer programme checks they are working. The aircraft are launched using a winch and land with a catch rope (it is worth watching this on YouTube).
Safety is also a priority. The company has worked closely with the Rwanda Civil Aviation Authority. The aircraft fly low and missions can be aborted quickly with a parachute being activated.
Zipline is a great example of the Fourth Aviation Revolution in action.
The term Fourth Industrial Revolution was first used by Klaus Schwab, the founder of the World Economic Forum, to describe the “new ways in which technology becomes embedded within societies and even our human bodies”. These technologies include: additive manufacturing; artificial intelligence; biotechnology; virtual/augmented reality; the Internet of Things; blockchain and many others. Together these technologies – often driven by other industries – are driving the Fourth Aviation Revolution.
A Zipline aircraft can carry only three blood bags. But soon we will see electric aircraft flying around cities carrying people (and a lot more carrying cargo). The cost of training a pilot will fall significantly thanks to virtual reality and electric aircraft. Biotechnology will lower the costs of sustainable fuel.
Existing aircraft will also be transformed. Aircraft monitoring combined with artificial intelligence (creating digital-twin engines) will reduce unplanned maintenance to zero.
Additive manufacturing will simplify engines. GE holds the honour of having the first 3D printed part on an engine to be certified by the US Federal Aviation Administration. The part involved was a housing case for a sensor which provides temperature and pressure readings for the GE90-94B engines used on Boeing 777-200ERs.
“When we were designing that, we executed well over 250 different design iterations. And when I say iterations, I mean designed, built and tested those iterations,” says Josh Mook, innovation leader, GE Additive. “And that is so important because normally in a combustion development programme you may only get a handful of iterations to do. And combustion, as an example, is still on that border between science and art, where combustion is a very complex phenomenon that we cannot fully simulate. So there really is no substitute for testing.”
New technologies will (finally) make operating aircraft easier. And owners and passengers will insist on digital systems.
But it will not happen tomorrow.
Revolutions always take time. Even the French one took 10 years. And they had the guillotine to speed things up.
2. The Fourth Industrial Revolution
• Drone deliveries
• Additive manufacturing
• AI
You thought service at low-cost airlines couldn't get worse.
Flygskam to the moon
• Flight shaming
• Sustainable Fuel
• Offsetting
OCTOBER 2019: EXTINCTION Rebellion protestors target London City Airport. November 2019: The UK Labour Party suggests a 2025 ban on private jets. November 2019: Extinction Rebellion block the private jet terminal at Geneva Airport. January 2020: Joaquin Phoenix tells fellow actors at The Golden Globe Awards that: “We don’t have to take private jets to Palm Springs and back.”
You do not need a complicated algorithm to see that business aviation is under attack. Environmental themes dominated much of 2019. The Oxford English Dictionary said “climate emergency” was its word of the year – “flight shaming”, the translation of the Swedish word ‘flygskam’ was also on the shortlist. Greta Thunberg, the 17-year-old campaigner, was named Time Magazine’s person of the year.
Business aviation is an easy target. Even if it is not a logical target.
The Air Transport Action Group (ATAG), an industry body, says that all large aircraft – business jets, commercial airliners and freight aircraft – contribute 2% of all carbon man-made carbon emissions. ATAG estimates that these flights produced 915m tonnes of CO2 in 2019. Humans produced over 42bn tonnes of CO2.
Business aviation produces just 2% of all aviation emissions. This is around 18.3m tonnes of carbon dioxide. Phoenix may be surprised to know that this is roughly the same as the US film and TV production industry, according to research by University of California, Los Angeles (UCLA) in 2006. On a purely rational level, business aviation attracts far more attention from environmentalists than it merits (especially as the industry is working hard to cut emissions). Business aviation is also committed to carbon neutral growth by 2020; improving fuel efficiency by 2% a year between 2010 and 2020 and; reducing carbon dioxide emissions by 50% by 2050 compared with 2005.
One problem is that people are always keen to support environmental policies that do not affect them. Car drivers in the US and Europe will say that the coal power stations in China should be shutdown. European politicians are happy to criticise the destruction of the Amazon rainforest.
As most people do not fly in business aircraft, the ideas of banning jets is popular. Some 54.6% of the 5,000 people we surveyed in the UK, supported the idea of a ban. This is higher than Sweden – where 49.6% believe in banning business jets. Most surprisingly, even 41.8% of Americans believe that business jets should be banned.
Fighting back – or even defending the industry – is not easy. But how successful the industry is at doing this will be critical for the next 10 years.
The good news is that the business aviation industry – particularly trade groups, manufacturers and fuel companies – are already doing a lot. New aircraft (and engines) are much more fuel efficient than they were 10 years ago and electric aviation is closer than everyone thinks.
There is increased interest in carbon off-sets. “Fifteen years ago, I would talk to an operator or a pilot and they would often look at me and say this is “BS – we will never be interested,” says Nancy Bsales, who has specialised in carbon and business aviation flights for more than 15 years and is seeing increased demand. “But a lot came back a few years later and have kept offsetting. And if you completely disagree with the idea, that is fine. But it will be part of the regulatory landscape in the future.”
The other big breakthrough is Sustainable Aviation Fuel (SAF) which is made from sustainable feedstock varying from cooking oil and other non-palm waste oils; food waste; wood scraps, fast growing plants and algae. It costs more than standard jet fuel – at the moment three times as much – but the price is coming down fast. The number of airports offering it is growing fast.
“Aviation has solved lots of problems over more than 100 years, it solved the problem of gravity, of speed and range,” said Ed Bolen, President of the National Business Aviation Association (NBAA), speaking at a special Sustainable Aviation Fuel event at Farnborough Airport in 2019. “It can solve this issue.”
The Business Aviation Coalition for Sustainable Aviation Fuel, Jet Aviation and Zurich Airport even managed to make sustainable aviation fuel available for people flying out of the World Economic Forum. They also introduced a new payment-transfer programme called ‘book-and-claim’.
“Business aviation aims to be a catalyst in the transition to cleaner and more sustainable transport. The new SAF programme brings us one step closer,” said Juergen Wiese, chairman of the European Business Aviation Association (EBAA). “Business aviation is laying the foundation of a physical, and traceable, SAF supply chain around the world.”
Business aviation has the potential to be one of the most environmentally friendly forms of transport. Changing Flight Shame to Flight Pride. But sadly Flygstolhet is not as catchy.
3. Flygskam to the moon
• Flight shaming
• Sustainable Fuel
• Offsetting
OCTOBER 2019: EXTINCTION Rebellion protestors target London City Airport. November 2019: The UK Labour Party suggests a 2025 ban on private jets. November 2019: Extinction Rebellion block the private jet terminal at Geneva Airport. January 2020: Joaquin Phoenix tells fellow actors at The Golden Globe Awards that: “We don’t have to take private jets to Palm Springs and back.”
You do not need a complicated algorithm to see that business aviation is under attack. Environmental themes dominated much of 2019. The Oxford English Dictionary said “climate emergency” was its word of the year – “flight shaming”, the translation of the Swedish word ‘flygskam’ was also on the shortlist. Greta Thunberg, the 17-year-old campaigner, was named Time Magazine’s person of the year.
Business aviation is an easy target. Even if it is not a logical target.
The Air Transport Action Group (ATAG), an industry body, says that all large aircraft – business jets, commercial airliners and freight aircraft – contribute 2% of all carbon man-made carbon emissions. ATAG estimates that these flights produced 915m tonnes of CO2 in 2019. Humans produced over 42bn tonnes of CO2.
Business aviation produces just 2% of all aviation emissions. This is around 18.3m tonnes of carbon dioxide. Phoenix may be surprised to know that this is roughly the same as the US film and TV production industry, according to research by University of California, Los Angeles (UCLA) in 2006. On a purely rational level, business aviation attracts far more attention from environmentalists than it merits (especially as the industry is working hard to cut emissions). Business aviation is also committed to carbon neutral growth by 2020; improving fuel efficiency by 2% a year between 2010 and 2020 and; reducing carbon dioxide emissions by 50% by 2050 compared with 2005.
One problem is that people are always keen to support environmental policies that do not affect them. Car drivers in the US and Europe will say that the coal power stations in China should be shutdown. European politicians are happy to criticise the destruction of the Amazon rainforest.
As most people do not fly in business aircraft, the ideas of banning jets is popular. Some 54.6% of the 5,000 people we surveyed in the UK, supported the idea of a ban. This is higher than Sweden – where 49.6% believe in banning business jets. Most surprisingly, even 41.8% of Americans believe that business jets should be banned.
Fighting back – or even defending the industry – is not easy. But how successful the industry is at doing this will be critical for the next 10 years.
The good news is that the business aviation industry – particularly trade groups, manufacturers and fuel companies – are already doing a lot. New aircraft (and engines) are much more fuel efficient than they were 10 years ago and electric aviation is closer than everyone thinks.
There is increased interest in carbon off-sets. “Fifteen years ago, I would talk to an operator or a pilot and they would often look at me and say this is “BS – we will never be interested,” says Nancy Bsales, who has specialised in carbon and business aviation flights for more than 15 years and is seeing increased demand. “But a lot came back a few years later and have kept offsetting. And if you completely disagree with the idea, that is fine. But it will be part of the regulatory landscape in the future.”
The other big breakthrough is Sustainable Aviation Fuel (SAF) which is made from sustainable feedstock varying from cooking oil and other non-palm waste oils; food waste; wood scraps, fast growing plants and algae. It costs more than standard jet fuel – at the moment three times as much – but the price is coming down fast. The number of airports offering it is growing fast.
“Aviation has solved lots of problems over more than 100 years, it solved the problem of gravity, of speed and range,” said Ed Bolen, President of the National Business Aviation Association (NBAA), speaking at a special Sustainable Aviation Fuel event at Farnborough Airport in 2019. “It can solve this issue.”
The Business Aviation Coalition for Sustainable Aviation Fuel, Jet Aviation and Zurich Airport even managed to make sustainable aviation fuel available for people flying out of the World Economic Forum. They also introduced a new payment-transfer programme called ‘book-and-claim’.
“Business aviation aims to be a catalyst in the transition to cleaner and more sustainable transport. The new SAF programme brings us one step closer,” said Juergen Wiese, chairman of the European Business Aviation Association (EBAA). “Business aviation is laying the foundation of a physical, and traceable, SAF supply chain around the world.”
Business aviation has the potential to be one of the most environmentally friendly forms of transport. Changing Flight Shame to Flight Pride. But sadly Flygstolhet is not as catchy.
ALBERT EINSTEIN’S THEORY of relativity states that time and space are not a constant. It is an extremely easy thesis to prove. Just stand at a hotel or hire car check-in desk after a long flight and you can feel literally feel time slowing down. Seconds become minutes. No matter how many frequent-traveller programmes you subscribe to, it always seems to take an age. But it is usually forgotten by the time your reach your room or drive away.
The same is true for business-jet owners. They buy aircraft to get places (not even to fly – just to get somewhere). Not to become experts on sales tax, ADS-B mandates or auxiliary power unit (APU) warranties. But the experience of buying and then owning a business jet is often a frustrating one. There are a mass of opportunities to rethink and to simplify ownership. To make the complex as simple as possible.
There is a lot of talk about the sharing economy replacing that of ownership. But business aviation has always had options for people who do not want to own a whole aircraft – first charter (1910 onwards), then fractional (1964) and now memberships. But a lot of people still want to own an aircraft outright and there is a big opportunity to improve the experience and get more people hooked.
At one level, there can be few more-enjoyable experiences than boarding your own aircraft for the first time. Companies with corporate aircraft quickly discover how useful a tool it can be. Brokers tell stories of small and medium US companies upgrading their aircraft when they discover they can actually serve a much larger region than they ever imagined. But while some buyers will want to know the technical issues involved in their aircraft, most do not.
In the energy market, turbine manufacturers provide availability guarantees rather than selling turbines. This could be a natural switch from power-by-the-hour programmes (especially as connected aircraft will change the way maintenance is done).
Ownership is also competing with the charter market – both cards and programmes. At the moment, many charter hourly rates are lower than the actual cost of owning aircraft if financing costs and depreciation are included.
“The entire industry is aligned with selling and operating aircraft – it has been that way since Bill Lear sold his first aircraft,” says Brian Proctor, President and CEO of Mente Group. “But we find that most buyers do not want an aircraft. They want to buy what the aircraft makes available to them and that is lift. They want access to safe, customisable, affordable lift. There is an opportunity particularly at the higher end of the market.”
Embraer’s Pulse concept. To celebrate it's 50th anniversary it asked its designers; “What will business aviation look like in the next 50 years.” We think it will take them 10.
Flight as a service
• Rethinking ownership
• Simplifiying lift
ALBERT EINSTEIN’S THEORY of relativity states that time and space are not a constant. It is an extremely easy thesis to prove. Just stand at a hotel or hire car check-in desk after a long flight and you can feel literally feel time slowing down. Seconds become minutes. No matter how many frequent-traveller programmes you subscribe to, it always seems to take an age. But it is usually forgotten by the time your reach your room or drive away.
The same is true for business-jet owners. They buy aircraft to get places (not even to fly – just to get somewhere). Not to become experts on sales tax, ADS-B mandates or auxiliary power unit (APU) warranties. But the experience of buying and then owning a business jet is often a frustrating one. There are a mass of opportunities to rethink and to simplify ownership. To make the complex as simple as possible.
There is a lot of talk about the sharing economy replacing that of ownership. But business aviation has always had options for people who do not want to own a whole aircraft – first charter (1910 onwards), then fractional (1964) and now memberships. But a lot of people still want to own an aircraft outright and there is a big opportunity to improve the experience and get more people hooked.
At one level, there can be few more-enjoyable experiences than boarding your own aircraft for the first time. Companies with corporate aircraft quickly discover how useful a tool it can be. Brokers tell stories of small and medium US companies upgrading their aircraft when they discover they can actually serve a much larger region than they ever imagined. But while some buyers will want to know the technical issues involved in their aircraft, most do not.
In the energy market, turbine manufacturers provide availability guarantees rather than selling turbines. This could be a natural switch from power-by-the-hour programmes (especially as connected aircraft will change the way maintenance is done).
Ownership is also competing with the charter market – both cards and programmes. At the moment, many charter hourly rates are lower than the actual cost of owning aircraft if financing costs and depreciation are included.
“The entire industry is aligned with selling and operating aircraft – it has been that way since Bill Lear sold his first aircraft,” says Brian Proctor, President and CEO of Mente Group. “But we find that most buyers do not want an aircraft. They want to buy what the aircraft makes available to them and that is lift. They want access to safe, customisable, affordable lift. There is an opportunity particularly at the higher end of the market.”
Embraer’s Pulse concept. To celebrate it's 50th anniversary it asked its designers; “What will business aviation look like in the next 50 years.” We think it will take them 10.
