CJI London Day One: ‘Vaccine bounce’ injects new confidence into business aviation
The roll out of vaccines is injecting new confidence into the private jet market, Hamish Harding, Action Aviation chairman, told Corporate Jet Investor’s London 2021 online conference yesterday.
“There’s a sort of vaccine bounce now, as people grow more confident,” Harding told more than 550 delegates on the first day of the conference. “As we see vaccines roll out, they [prospective buyers] want to be ready to move as soon as they can get their vaccine.”
Harding’s comments followed The Great British Brunch Challenge sponsored by Bombardier Aviation and judged by Daniel Hulme, On Air Dining CEO. (Top honours were won by Paul Mulko, FlyEasy Software, with a little help from 10-year-old daughter Avital). Meanwhile, the influx of new buyers seen in the fourth quarter of 2020 was continuing in the first quarter, continued Harding. “Bonus depreciation [in the US market] was wonderful and, as usual, spurred some people into doing some amazingly fast transactions.”
But sourcing particular types of business aircraft was proving increasingly problematic. Harding cited the difficulties in finding a forward galley Gulfstream 450 from 2015 to 2017 – the last years of its production.
Rebecca Johnson, JetHQ, President, EMA agreed sourcing the right inventory was becoming more difficult. “One of the biggest challenges of 2021 is finding inventory,” said Johnson. “It’s not only finding inventory but finding it at the right price. We are finding it, but we are having to look real hard.”
‘Having to look real hard’
The return of corporate travellers to private aviation was detected by Pascal Bachmann, Jetcraft, Senior Vice President, Sales EMEA. “The corporates realise that travelling with the airlines is very difficult and is not going to improve any time soon. They only have 24 hours in their day just like everyone else,” said Bachman. “Many consider that private aviation has the solution to the problem they are encountering.”
Alireza Ittihadieh, Freestream Aircraft President and CEO, highlighted the growing impact of Chinese buyers. “All of a sudden, there’s a new audience in China,” he said. “It’s 70% American and 30% in China.” Confirmation of increasing interest from China was supplied by Stan Shparberg, Airbus Corporate Jets, Vice President Commercial. “China has really picked up,” he told the forum The large aircraft market. Tobias Laps, Comlux Executive Vice President, Sales agreed: “China has big potential for large aircraft [sales].”
In addition to the prospects for business aviation this year, sustainability was another key theme, with opinions aired on the future of Sustainable Aviation Fuel (SAF), book and claim systems and carbon offset schemes. Bryan Sherbacow, from SAF producer World Energy, said interest in SAF has picked up significantly in the past two years. “I’ve been working in this area for 12 years and it’s amazing to see what’s happened in the past 12 to 24 months – especially with the level of specificity. With this level of detail, we can really see things changing, particularly on policy.”
‘Still the hurdle of price’
Jonathan Wood, Neste Vice President, Renewable Aviation agreed. “In the past 12 months the conversations have changed from: ‘Should we, shouldn’t we?’ to ‘How much and when?’” But price remained an obstacle. “There is still the hurdle of price. With the best will in the world, it’s not going to be the same price as fossil fuel for the foreseeable future.”
Tim Obitts, National Air Transport Association (NATA), President and CEO, says more incentives are needed to boost adoption. “The demand is there. People want their SAF. But there needs to be incentives to make it happen to increase supply and to book and claim to disseminate that.”
Both Neste and World energy are making “massive investment” in production facilities to make boost SAF production, according to Sherbacow of World Energy. “In the next two to three years there will be another 1bn gallons of real SAF between our two companies. That’s a significant amount.”
Neste’s Wood agreed about the need to boost production but said some existing capacity still went unused. “We need more capacity [in total] but we have some capacity that is not fully used.” He went on to pledge Neste would deliver SAF to destinations worldwide to meet significant demand. “If we have firm demand from customers, we will bring that SAF to the customer, wherever they are.”
Nancy Bsales, 4Air, COO Sustainability, highlighted the role of carbon offsets. “There are ways that you can reduce your carbon footprint, by technologies like winglets and sustainable aviation fuel and that will reduce your carbon footprint, but there is still a footprint left,” said Bsales.
Business Aviation needs to be more sustainable
“Sustainability has stayed an issue,” added Bsales. “We don’t get to choose the challenges but how we respond to them.” The conference audience agreed with her. In a poll, 95% of respondents said business aviation needs to be more sustainable.
Speakers warned that unless the industry took decisive action to improve its sustainability record, some governments may introduce legislation to regulate the sector. Athar Husain Khan, European Business Aviation Association warned: “If we don’t reach those [sustainability] targets, they are going to clamp down on the industry in Europe.”
But worries about sustainability, the continuing impact of Covid-19 and sourcing good quality inventory did little to dent the optimism of delegates about the prospects for business aviation. An audience poll revealed 65% of respondents were fairly optimistic, 29% were very optimistic and 6% were fairly pessimistic.
There is still time to register to join us and yesterday’s sessions are still available on demand.