CJI Miami 2021
More than 500 CEOs and industry leaders gathered in Miami to take the temperature of business aviation last November. The concensus was, like the weather outside the CJI Miami conference, hot, hot, hot. Words: Mike Stones
Eyes down to dissect the future of business aviation in the busy conference hall.
Pooling knowledge: Delegates network at the JSSI-hosted cocktail reception.
“This is the uppest of up markets we have ever seen.” Andrew Collins, Sentient Jet, president and CEO captured succinctly the promise and the challenges business aviation faced last autumn as it surged ahead powered by new clients across all sectors. “I feel every day like that was the biggest day in private aviation yesterday. And then, wait until tomorrow,” Collins told delegates in the opening session of Corporate Jet Investor Miami 2021 conference.
The influx of new clients to card and fractional plans together with new aircraft purchases testified to the industry’s success in promoting the benefits of private aviation. “Last year we all became evangelists for why private aviation matters – how you can avoid crowds and [Covid] exposure,” he said before the emergence of the Omicron variant. “We created this surge and built pent up demand.” A measure of Sentient’s success was that for every new card sale, the company noted 2.5 referrals.
First-time users were up by more than 50% compared with historical data, noted Michael Amalfitano, Embraer Executive Jets, president and CEO. Fuelling this growth was a significant rise in US private wealth – up 12% over the past year, exceeding the growth in Asia Pacific for the first time in five years.
“People are moving up through charter, up through the access points of democratisation…”
Michael Amalfitano, Embraer Executive Jets, president & CEO
“Last year we all became evangelists for why private aviation matters – how you can avoid the crowds and [Covid] exposure.” Andrew Collins, Sentient Jet, president & CEO.
“It is possible to find quality pre-owned aircraft for sale. But you have to look further afield – and that can often bring its own challenges.” Hamish Harding, Action Aviation, chairman.
“The heyday of this business – and we have a lot to figure out as an industry – is in the next five, 10, 15 and 20 years. I see all green lights.” Kenny Dichter, Wheels Up, founder & CEO.
Newcomers were younger, likely to be under 55 years of age, compared with the more traditional buyers aged over 55. “People are moving up from commercial through charter, up through the access points of democratisation, such as card and fractional, to ownership – all happening based on new priorities,” said Amalfitano. Connectivity remained important but new trends were also emerging. New clients are looking for fewer touch points and travel from point-to-point destinations that fit their lifestyle. They want a safer, healthier, and more efficient, seamless travel experience.
Kenny Dichter, Wheels Up, founder and CEO, brimmed with enthusiasm. “The heyday of this business – and we have a lot to figure out as an industry – is in the next five, 10, 15 and 20 years. I see all green lights.”
A key reason for optimism was the opportunity to develop “open table” technology, which is absent in business aviation. “If someone develops technology that can support the industry and make it more efficient, there’s an unbelievable opportunity, not just for Wheels Up, but the whole space,” said Dichter.
Changing customer demands also prompted Brian Proctor, Mente Group, president and CEO to reveal the launch of a new service. Freedom by Four Corners Aviation aimed to offer clients the benefits of their own scalable aviation department. It claims to offer a customised and fully integrated lift solution, including aircraft, crew, operations, and supplemental lift, but “without the hassles of ownership such as administration, accounting, and uncertainties”.
“Within 10 years, if you don’t have a sustainability plan, you won’t be able to borrow money from a major bank.” Ford von Weise, Citi Private Bank, director, head Global Aircraft Finance Group & Advisory Services.
“Business aviation is very nimble. It can react quickly. It can make changes without the need for an act of Congress or lengthy union discussions.” René Banglesdorf, The Aviation Collective, co-founder.
“We are predicting strong economic growth through 2022 to 2023 – well above the [US] economy’s long run average”. Gus Faucher, PNC Financial Services Group, senior vice president & chief economist.
Catching up after Covid isolation: George Kleros JSSI, senior vice president chats to Joe Zulueta, Aviation Suppliers Association, president & CEO and friend.
Growing shortage of pilots
Braking business aviation growth were the growing shortage of pilots and aircraft engineers and technicians and lack of inventory for buyers in a strong sellers’ market. Scott Cutshall, Clay Lacy Aviation, senior vice president, Development and Sustainability warned: “5,000 pilots left the airlines last year [2020] and we had a problem before the pandemic.” And when the airlines experience a shortage, they “reach down” to business aviation to find the remedy. “Costs are going up, salaries are going up, hourly rates are going up, so I would argue that even if prices increase, costs are increasing faster. And we’re just trying to play catch up,” said Cutshall. One key solution was to offer student pilots a clear and rewarding career path.
Swift action was needed now to secure the next generation of recruits before other potential employers out-competed business aviation for young talent, said René Banglesdorf, co-founder of the new mentoring consultancy The Aviation Collective. “Business aviation is very nimble. It can react quickly. It can make changes without the need for an act of Congress or lengthy union discussions,” said Banglesdorf.
Audience Votes:
CJI Miami 2021 sponsors:
Audience Votes:
Event partners
Action Aviation
Four Corners Aviation
Gogo Business Aviation
Jet Aviation
Jet Edge
Sentient Jet
Stonebriar Commercial Finance
Wheels Up
Lead sponsors
Aerlex
AIC Title Service
Air Charter Safety Foundation
ATP Flightdocs
Bombardier
Clay Lacy Aviation
Collins Aerospace
Embraer
Fontainebleau Aviation
Freestream Aircraft
GE Aviation
Gilchrist Aviation Law
JSSI
Priester Aviation
Private Jet Card Comparisons
The Registry of Aruba
Rolls-Royce
San Marino Aircraft Registry
Solairus Aviation
Viasat
Sponsors
ACJ
Air Law Office
Global Jet Capital
Inmarsat Aviation
Intelsat
JetHQ
Journey Aviation
McAfee & Taft
Paynode
PNC Aviation Finance
NetJets
SmartSky Networks
Vedder Price
Amstat
Association partners
American Society of Appraisers
National Aircraft Finance Association
Sustainability partner
4Air
CJI Miami 2021 sponsors:
Event partners
Action Aviation
Four Corners Aviation
Gogo Business Aviation
Jet Aviation
Jet Edge
Sentient Jet
Stonebriar Commercial Finance
Wheels Up
Lead sponsors
Aerlex
AIC Title Service
Air Charter Safety Foundation
ATP Flightdocs
Bombardier
Clay Lacy Aviation
Collins Aerospace
Embraer
Fontainebleau Aviation
Freestream Aircraft
GE Aviation
Gilchrist Aviation Law
JSSI
Priester Aviation
Private Jet Card Comparisons
The Registry of Aruba
Rolls-Royce
San Marino Aircraft Registry
Solairus Aviation
Viasat
Sponsors
ACJ
Air Law Office
Global Jet Capital
Inmarsat Aviation
Intelsat
JetHQ
Journey Aviation
McAfee & Taft
Paynode
PNC Aviation Finance
NetJets
SmartSky Networks
Vedder Price
Amstat
Association partners
American Society of Appraisers
National Aircraft Finance Association
Sustainability partner
4Air
Lack of inventory focused minds throughout the day. While OEMs won praise for their production restraint (possibly influenced by supply chains challenges), brokers complained about the lack of quality pre-owned aircraft for sale and operators about the lack of lift. Pre-owned aircraft are available, but you have to look further afield, which brought challenges, said Hamish Harding, Action Aviation chairman. People could be “made to sell”, with the high level of prices available now, he added. Two productive locations for sourcing pre-owned business jets were China and Russia.
Sustainability concerns also emerged as a key theme. Sustainable aviation fuel (SAF), book-and-claim options and carbon offsets offered the best short-term solution to reduce business aviation’s carbon footprint while new technology such as electric and hybrid electric and hydrogen propulsion offered longer term solutions. Leo Knaapen, Bombardier, chief, Industry Affairs put the challenge of SAF supply into perspective: “Next year we will have about 3bn gallons of SAF, but we need about 35bn. That is the commitment or challenge [president] Biden has given.”
Jean-Noel Robert, Airbus Corporate Jets, head of business development, underlined all the major OEM’s commitment to SAF. Airbus was committed to ensuring its entire fleet was certified to fly using SAF, he added.
At present SAF is only available at about two dozen locations throughout the US, acknowledged Kennedy Ricci, 4AIR president. “That’s not necessarily a bad thing. It makes sense to sell SAF close to where it’s made. But five years from now, new SAF pathways will evolve in different locations to generate different [more efficient] types of SAF.”
Securing corporate finance in future will be dependent on producing a sustainability plan, warned Ford von Weise, Citi Private Bank, director, head Global Aircraft Finance Group & Advisory Services. “Within 10 years, if you don’t have a sustainability plan, you won’t be able to borrow money from a major bank,” von Weise told delegates. “This is happening regardless of what you think should happen.”
CJI Miami took place at the Fontainebleau Miami Beach hotel on November 2nd and 3rd 2021.
Shaken not stirred: Michael Amalfitano, Embraer Executive Jets, president & CEO, greets David Fowkes, Raymond James, MD and sector co-head, Aviaton & Aerospace.
Industry gap sparks ‘feeding frenzy’
Lack of pre-owned US aircraft for sale sometimes sparks “a feeding frenzy”, warned Wayne Starling (pictured left), International Aircraft Dealers Association (IADA) executive director and industry consultant.
Summarising comments from IADA members, Starling said: “If you’re looking in the US, it’s like a carcass after vultures have picked over it. What remains are aircraft that need so much maintenance or have so many problems they will probably never sell.”
Quantifying the shortfall in inventory Andrew Young, Amstat general manager said just 4.9% of the fleet of business jets and turbo props is available for sale – the lowest level since Amstat launched in 1984. A market in equilibrium usually has about 10% of the fleet for sale compared with as much as 18% in the depths of the Great Financial Depression, he said.
Also there had been a 44% contraction in aircraft available for purchase year-on-year. “With preferred aircraft selling very fast – some before they are listed on the market – the days on the market for the remaining aircraft has risen by 22%.”
Jeremy Stumpf, Freestream Aircraft vice president, urged buyers to compromise. “The perfect aircraft will likely not be available, so go with the one that ticks most of the boxes,” he said. “Make changes to the aircraft after you close the deal. The most important thing is to secure the aircraft.”
Wheels ready and dressed to the nines: Delegates prepare for the Annual CJI Miami 9-Hole Golf Challenge.
