CJI Asia 2020 Conference Report
More than 500 delegates attended over 20 presentations and networking events dedicated to understanding the impact of Covid-19 on business aviation in the region and the prospects for growth. Words: Mike Stones
TROPICAL STORM Nangka, which battered Hong Kong on October 13th – the opening day of CJI Asia 2020, offered the perfect metaphor for the state of corporate aviation in Asia. Sarah Kalmeta, founder of aviation and business consultancy Pivot Point, used it to describe consolidation in the sector.
After “10 years which saw an explosion of growth and new operators”, the global Covid-19 pandemic would prove fatal for some small-scale firms, Kalmeta predicted. “The smaller operators – the couple of person teams – probably will not withstand the storm. But the big players realise it’s a storm and that storms pass.”
The weather, or more specifically climate change, also captured the attention of Peter Coles, Clyde & Co’s head of Aviation Practice in Asia Pacific. Coles and his panel, which included Leo Knaapen, Bombardier Aviation’s chief of industry affairs and Clive Jackson, founder and chairman of Victor, considered how business aviation could cut its carbon emissions to mitigate the impact of climate change. Putting the challenge into perspective, Coles said: “This is a serious subject. A 1m rise in sea levels around Europe would mean 96 major airports would be unable to operate.”
Knaapen highlighted the need for action, describing business aviation as “an easy target for the detractors” – whether government officials, non-govermmental organisations or the public. Significant promise was offered by Sustainable Aviation Fuel (SAF), he said. At present, SAF was available only in three or four major airports in Europe and North America. But the opening of Neste’s refinery in Singapore, scheduled to reach full capacity in 2023, would boost availability in the region.
Neste had the capacity to produce 100,000 tonnes of SAF last year, which would increase to 1.5m tonnes, as the Singapore facility reached full production, according to Jackson. But even this was “just the first step” compared with aviation’s pre-Covid-19 fuel burn of 1bn tonnes a year, he added.
“Our team has never been busier – we are seeing a lot of first-time buyers.”
Brad Harris, Dallas Jet International CEO and President
Sunnier outlook predicted
A sunnier outlook for business aviation in the region was predicted by a range of speakers, boosted by the arrival of new clients seeking the safety and convenience of private jet travel.
“Demand is international at the moment, and it is a good market because of the new buyers,” Hamish Harding, Action Aviation chairman, told delegates. Although there are more challenges to closing deals in a Covid-19 age, such as pre-purchase inspections, Harding expects strong demand to continue.
“We might be looking at a change of guard, in America, closer to the end of this year. So, the demand for pre-owned will be high in the next three months with people trying to close deals before the 100% depreciation on pre-owned aircraft is removed.”
He is optimistic that business aviation will emerge stronger after 2020: “We have survived through this quite well compared with commercial airlines.”
Darren Broderick, Asian Corporate Aviation Management, CEO, was also cautiously optimistic. “People don’t believe airline schedules will recover for several years. And they are scared to travel in an aluminium tube from one part of the world to another. These perceptions were forcing people who had the means to travel privately and previously considered investing in private aviation to finally take the plunge.”
Jetex signalled its confidence in the region by using our CJI Asia 2020 event to reveal its latest FBO, based in Singapore. “We are optimistic about the possibilities for growth in the Asia-Pacific region and very excited to be adding Singapore to our network,” said Adel Mardini, CEO and President of Jetex.
“Last year, Singapore experienced very strong demand for private jets with an increase of 16% compared with 2018. Therefore, we look forward to meeting the rising demand with an exceptional FBO and exemplary operational support. Bombardier shares our high standards for service, so the collaboration is a natural fit.”
It was an optimism matched by conference delegates. According to an audience poll, 75% of delegates were either Fairly optimistic (72%) or Very optimistic (3%). Turning to the prospects for recovery, 61% of delegates thought business aviation would return to normal operations by 2022, while 22% thought the industry would return to pre-Covid-19 flight activity by next year.
The CJI Asia 2020 online conference was staged on October 13th and 14th.
CJI Asia 2020 sponsors:
Stonebriar Commercial Finance
Bermuda Aircraft Registry
Boeing Business Jets
Clyde & Co
McAfee & Taft
UAS International Trip Support
Business jets for sale: A 1999 Falcon 2000, priced at $4.775m from Mesinger Jet Sales.
A 2008 Learjet 40XR from Dallas Jet International.
Buyers take second-hand planes to new heights
Private jet sales to first-time buyers in the pre-owned market are reaching new heights, according to aircraft brokers Jay Mesinger, Mesinger Jet Sales CEO and President, and Brad Harris, Dallas Jet International CEO and President. Mesinger told delegates: “We are busier than we were in 2004-2007. There is a huge influx of first-time buyers, all High Net Worth Individuals. But almost the entire corporate side of the industry has retreated, except to sell. I don’t mean desperate selling, I mean transition selling. Where they might have gone to the OEMs and ordered a couple of airplanes, they are having us relinquish the old planes.” Harris said that 2020 would be the company’s first or second-best year in terms of revenue, in its 29-year history. “Our team has never been busier – we are seeing a lot of first-time buyers, or HNWIs upgrade [about 90%],” said Harris. “It is a weird time, but Covid has not impacted the pre-owned sector transactionally.”
Virtual conference highlights
Hover over the picutres for the highlights
Virtual conference highlights
01 Alex Fecteau – Boeing Business Jets “It’s going to be a little bit rocky in the next year or two, but I do see Asia as probably the biggest growth market that BBJ has.” Session – Bizliners versus traditional business jets
02. Scott McCreary – McAfee &Taft “For used aircraft purchases, we are seeing a lot of new entrants – new participants in the private aviation industry.” Session – Born in the USA – Moving within the US
03. Stephane Aliaga – Collins Aerospace “Connectivity was very important before Covid-19 but, with the new normal, it’s even more so now. We are seeing this with charter operators that now it is a must-have.” Session – Global high speed connectivity
04. Alireza Ittihadieh – Freestream Aircraft “The world business economy needed a reset and we got that with the Covid crisis. It’s going to take five years to get back to [the market seen] in December 2019.” Session – Markets, jets and trees
05. Mark Winzar – Jet Support Services Inc “There is going to be some data that the OEMs want to keep close to the chest. But having data in the public domain will help people decide how they want to get their maintenance done.” Session – The democratisation of data
06. Richard Koe – WINGX “Aviation overall is going to see strong growth in Asia, particularly in China. I think this is going to be the pivot year and we are certainly going to see a comeback in 18 months to three years.” Session – Bizliners versus traditional business jets
07. Carlos Schattenkirchner – UAS International Trip Support “Interest in private travel has been rising because people don’t trust airline schedules and don’t want to go to a big airport.” Session – Operating and managing in Asia Pacific
08. Rohit Kapur – JetHQ “The pandemic has got a lot of fence-sitters taking notice of private aviation. The pandemic will work positively for our industry and I’m optimistic about where it will take us. We are still to see elective leisure travel come back. It is business travel that is leading the way.” Session: Concept & First Time Buyers
09. Simon Bambridge – TAG Aviation Asia “Business aviation will get back faster than commercial aviation. But it’s going to be a long, slow recovery until things pick up in the second half of 2022.” Session: The future for Asian business aviation
10. Jeffrey Lowe – Asian Sky Group “Any sort of recovery is being pushed back to the second half of 2021. There’s no saving 2020, it’s done and it just will not be a good year for most people. They’ve come to the realisation they are not going to hit their business performance targets for this year.” Session – Closing deals in the age of Covid-19
11. Sarah Kalmeta – Pivot Point “In business aviation, in Asia in particular, I see more females in professional roles than when I first came to Asia 10 years ago. I’ve seen more women in technical advisor roles and working as operations specialists. That’s really positive.” Session – Equal opportunities in Asian aviation
12. David Dixon – Jetcraft Asia “In this part of the world, it’s generally the longer range aeroplanes [that are in biggest demand]. Indonesia, for example, is 13,000 miles long, so the dynamics favour the longer range aeroplane.” Session – Concept & first time buyers
13. Raja Sharmaine – Women in Aviation Asia “The acceptance of women in aviation is very low compared with the telecoms industry, where there is a good mix of men and women. And that mix helps to drive growth and business.” Session – Equal opportunities in Asian aviation
14. Nilesh Pattanayak – Bombardier Aviation “We have to change the mindset in the DGCA [India’s Directorate General of Civil Aviation] to make it easier for people to own, operate and fly business aviation.” Session – Country focus: Is India about to take off?
15. Simon May – Flightcare Global “To get the industry moving, you have to think about how to mitigate the risks [of Covid-19]. No single measure will result in an acceptable risk reduction – it will be a combination.” Session – Aviation medicine in the age of Covid