CJI London 2025 – Disruption, opportunity and the ‘Trump Bump’

opinion

by Mike Stones

February 11, 2025

Our CJI London 2025 conference identified a rising tide of disruption impacting business aviation.

A rising tide of disruption is sweeping business aviation. In its wake follow opportunities and threats, according to speakers at last week’s CJI London 2025 conference. 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.

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 the impact of the (rapidly changing) plans appear to range 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 pointed to 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, the demand is rock solid. The first-time buyers have stayed with us, they’re sticky.”

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 growth 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.

“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 manufacturer.

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.

An even more positive assessment of the market was delivered by Pascal Bachmann, senior vice president of sales for Europe, the Middle East and Africa for Jetcraft. “Everything is hot right now,” he said. “The only way the values are going to suffer is if the economy suffers.” Backing that claim, Bachman displayed global aircraft inventory statistics that showed in January 2022, the average number of days aircraft spent on the market was 307 with an average asking price of $5.1m. In Jan 2025 those figures were 199 days on the market and an average asking price of $5.86m.

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 have to 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.”

Disruption to business jet operations linked to pre-purchase inspections (PPIs) was a hot topic. 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.”

Too often PPIs proved a (costly) battleground between sellers, buyers, brokers, maintenance facilities, lawyers and operators, speakers agreed.

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.

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.

Tariffs concerned many speakers. Initially, the president imposed 25% tariffs on imports, including aviation products, it is believed, from Canada and Mexico and 10% on goods from China. But the implementation of tariffs on goods from Canada and Mexico has been delayed by 30 days.

“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 borrowed a military term to describe them as “reconnaissance by fire”.