CJI Miami 2022: Is the heat wave cooling?
Outside the Fontainebleau conference centre, the Florida heat beat down on nearly 500 delegates at this year’s CJI Miami conference.
Inside, there was heat too, but this was confined to descriptions of the high-demand market for private jets. The key themes running through the 28 different sessions all touched on strong demand, supply chain issues and talent shortages, sustainability and a new influx of capital coming into the industry.
While everyone expects the US economy to worsen, almost all delegates were confident there will be no big fall in the next 12 months at least, with 33% of attendees very optimistic and 66% fairly optimistic. Brokers, too, were confident demand will remain strong into 2023.
Bankers shared their cautious optimism, with business expected to stay strong over the next year. “Senior executives do anticipate some level of recession, but the number one takeaway is that the banks are still open for business,” said Keith Hayes, senior vice president of PNC Aviation Finance. He added: “We’re not in fear of recession, we’re lending very prudently and we’re still doing business.”Global Jet Capital’s CEO Vivek Kaushal agreed:“We’re doing probably 50% more volume this year than we did last year, so we’re still very much in business.”
Another reason for optimism was OEMs’ strict supply chain management – aided by supply chain disruptions. However, keeping up with the demand was a worry for many. Maintenance was a particular concern. Speaking about backlogs in the sector, Christopher Jordan, Operations director, Global Engine Service Sales, Honeywell said: “Have you ever played whackamole? That’s what it’s like right now. It’s triage.”
Hiring (and keeping) the right people also dominated lots of conversations. Many attributed this to the industry’s image and commercial airlines’ polished recruitment campaigns. “Let’s be honest, we’re getting our tails kicked by the airlines,” said Andy Priester, chairman and CEO, Priester Aviation. “That’s where [the students’] mentality is. As an industry, we need to figure out how to engage and recruit people to get them involved in our organisations at the high school and university levels. If we do it together, we’re going to be able to make a difference, if we all do it separately it’s going to be really hard to fix.”
FAA staff shortages are also delaying some jet sales. Chris Rocheleau, chief operating officer, NBAA said the challenge is that companies in business aviation are “trying to move at the speed of Silicon Valley versus moving at the speed of government”. He said: “There’s always a little bit more work to do than there is the time and resources to do it, and the FAA faces the same challenges.
“As you have a lot of people rotating in the senior positions, it’s challenging for the agency to pick a path, there’s a lot of competing interests. Permanent leadership in a direction that’s important to the industry is going to make a difference.”
Sustainability offered both a challenge and an opportunity. While it remains the focus of industry criticism, Eve Laurier, vice president of Communications, Marketing and Public Affairs, Bombardier said it could be key to recruiting more talent. The same young people who are critical of aviation could be attracted by the promised opportunities to make it more sustainable. “They can test the solutions[to sustainability]with us. They can’t test them with commercial aviation”, she said.
More than half (58%) of the 500 delegates thought the industry has seen a permanent shift in demand. The remaining 42% thought the industry was experiencing cyclical changes. So, even if demand dips in the short term, it will come back around.
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