Going green: staying in the black
It was a simple question. Is business aviation under attack? asked Athar Hussain Khan, from European Business Aviation Association (EBAA) during the first session of our CJI London 2023 conference. He did not have to wait long for an answer.
During the question-and-answer session, Khan was interrupted by two (uninvited) climate change protesters who burst into the conference shouting: “Aviation is ruining our future.” It was a sharp reminder for our record audience (of around 600 delegates) about the importance of addressing sustainability topics and green concerns, while focusing on keeping their businesses in the black.
Recovering swiftly from the surprise interruption, the EBAA secretary general went on to say business aviation should be proud of what it has achieved already but could do more to promote its contribution to the global economy, to individuals’ lifestyle and to humanitarian causes, such as medical flights. “Business aviation is the Formula One of the skies,” said Khan. “It is the test bed for aviation innovation [particularly sustainability]” that points the way for commercial aviation.
While the sector faced “unjustified demonisation”, if it “can show more of itself”, it could persuade more people of its merits. “By drawing from our many strengths, we can shape the narrative [about business aviation] to our perspective,” he said.
Many speakers noted how aviation needs to improve its environmental record. “The business aviation industry has been slow to pick up on sustainability,” conceded Chadi Saade, vice president Commercial, Airbus Corporate Jets. “But in the past six months to a year, things had changed fast. Sustainability is not an option. We have never experienced a time when we need to change as fast as now. It’s all about safety – the safety of our planet.”
In the medium to long term, innovative research and new technologies, like electric and hydrogen propulsion, offered scope to cut or eliminate business aviation’s carbon footprint ahead of the zero emissions target of 2050. But for now, Sustainable Aviation Fuel (SAF) offered the best practical means to cut emissions (alongside carbon offsetting schemes) and to be seen to do by global opinion, according to speakers.
Nancy Bsales, chief operating officer with the sustainability consultancy 4Air returned to business aviation’s pioneering role. “What you have to remember is that we are the people who are laying the foundation for the rest of aviation,” she said.
But high prices and low availability meant sustainable fuel faced a big challenge. Toby Edwards, CEO, Victor told delegates: “Last year, we [SAF] only accounted for 0.1% of aviation fuel. So, getting that to 10% by 2030 is going to be a huge challenge,” he said. But he reported rising demand, as clients realised the sustainability and reputational benefits of using the fuel. “What we are seeing that is super exciting, is that one in five customers are requesting and using SAF when they book with us.”
Karl Mills, chief commercial officer, Europe, TAG Aviation saw SAF delivering business as well as sustainability benefits. “Sustainability is a very powerful sales tool, which has been overlooked,” he said. “In the future aircraft owners may choose a management company based on their sustainability record, especially corporate clients.”
Corporate interest in SAF was confirmed by Elouisa Dalli, senior vice president, Marketing and Communications, Jet Aviation. ”You are seeing corporate flight departments use SAF to meet their ESG targets, some even going as far as using 100% using the book-and-claim system.”
New legislation is becoming a big incentive to invest in SAF now, said Jonathan Wood, vice president, Renewable Aviation, Neste. “Policy is going to be incredibly important in SAFs future. In the EU around 2% of all fuel used in aviation will need to be SAF by 2025.”
But it wasn’t just green topics that dominated discussion at this year’s London conference. Staying profitably in the black also framed much of the debate. Many speakers thought that while private jet aviation market may be cooling, significant gains had been made on pre-pandemic levels. Myles Walton, MD Wolfe Research acknowledged the business jet market may be slowing down but said it is still 15% to 20% ahead of 2019 levels.
The North American market may continue to grow but “in Europe, they are going to have a tough time continuing to grow”, he said. Overall OEMs were facing both supply side and certification restraints.
Growth was very much on the agenda of most companies, including Jetex. “Last year was a massive year for us,” said Adel Mardini, president and CEO, Jetex. The company handled more than 71,000 flights compared with 51,000 in 2021. Regions singled out for growth were Europe and Asia.
Answering the question are we seeing a more balanced market, Andy Priester, chairman and CEO Priester Aviation said: “We are still playing catch up. We got so far behind with the human capital infrastructure that we still have years of catch up, but at least it’s not as bad because there aren’t as many new entrants.”
Stephen Friedrich, chief commercial officer, Embraer Executive Jets said the North American market had coped with soaring demand. “The US has been able to absorb it [rapidly rising demand] because we have the infrastructure.”
Fabian Bello, CEO Journey Aviation said: “I had a handful of clients who bought at the right time and their aircraft appreciated. In the last three months with pilot issues increasing and pilots quitting, [new clients] are saying they’re going to sell their airplane, pocket the money and be done. I do think there’s going to be a shake-off where these new assets go right back into the market.”
While pre-owned jets inventories are now climbing for some categories, Zipporah Marmor, vice president, Aircraft Transactions, ACASS highlighted soaring business last year. “The surprise of 2022 was what a great year it was, after a record 2021. At the end of 2021, I thought we would never see a year like that and we saw an even better one [in 2022].”
Chris Miller, managing partner, Shearwater Global Capital predicted: “In six months’ time, we will look back and see this as the start of more normal depreciation.”
Turning to cybersecurity, Katie Bancroft, associate, Jaffa & Co said aviation was becoming more aware of the risks. “People are taking steps to protect their sensitive personal data. But it is not a one-and-done thing. You need continuous improvements to ensure your information remains cybersecure.”
Andrew Douglas, founder, Make Tech Fly put the scale of the challenge into perspective. “If you knew some of the cyber threats out there, you would probably go back to pen and paper.”