New clients on a (Swiss) roll at EBACE
It wasn’t a long bus ride from the EBACE Palexpo exhibition hall to the static aircraft display at Geneva airport last Monday. But it was a place to hear insight about the new force powering private jet aviation.
A fellow passenger next to me remarked to his colleague – with evident exasperation – “He’s only 42, has just made billions in one of the tech industries and, now, he’s buying his first business jet. Where did I go wrong?”
Setting aside the speaker’s envious introspection, his words capture neatly the influx of first-time or concept buyers queuing up to buy their first business jet. There’s a rising tide of new entrants to private jet charter too. You don’t need to sit on a Swiss bus to notice this trend and all major jet manufacturers are thinking about how it will shape both demand for their products and how they do business.
Quantifying the number of new clients can be tricky. But not if you are Michael Amalfitano, president and CEO of Embraer Executive Jets. “In 2021, 48% of international buyers were first time buyers – not just Embraer, the market,” he told me during the OEM’s media briefing at the show. “Now look at Embraer – sales to new buyers, deliveries of. We have typically seen those segments at 10%, 12%, 15%, as an industry and as a brand. Those numbers have spiked up.”
Sales to new clients account for 36% of the total and for the backlog it is 38% “and growing”. Phenom deliveries to first-time buyers accounted for 47% of the market last year and 26% of all Embraer Executive Jets’ deliveries went to first time customers. “So it is real.”
It’s a familiar story told by all the OEMs we met at EBACE – although only Embraer shared precise figures. Mark Burns, president, Gulfstream, told me: “We have certainly seen a surge in first-time buyers in the past years – but the demographic has changed too – with younger buyers and [in new locations such as] in Vietnam and India.”
Michel Ouellette, executive vice president Bombardier Specialized Aircraft, Programs and Engineering, said: “We are seeing a lot of interest from new entrants and, yes, they are interested in sustainability topics.”
Éric Trappier, chairman and CEO Dassault Aviation, thought Covid had made private jet travel an even more compelling proposition. “During Covid quite a number of new customers joined the business aviation community because it is the only way to travel,” he told me. Not only had airlines’ schedules reduced significantly, making private jet travel the only practical means of convenient transportation on some journeys, but new and existing clients valued the greater security. “Clients want to avoid the Covid plane and don’t want to be at airports with lots of people,” said Trappier. “They increasingly want to travel and to meet customers, partners, suppliers and contractors. So, I’m quite optimistic about the future of business aviation.”
The question is: Will this rising tide of new entrants wane as soon as first class commercial airline travel becomes available again? The conventional wisdom is: No. Once you have experienced the luxury, convenience and safety of a private jet cabin, first class seats – both in the executive lounge and on the aircraft – permanently lose their lustre.
Less sure of this confident (and often heard) proposition is Amalfitano, at Embraer Executive Jets. Retaining new clients looms large in his thoughts. “The stickiness part is what are you doing with them,” he says. “Are you educating them? Are you immersing them in your brand. Introducing them to supply chain and customer support?”
Many first-time buyers, unlike the tech entrepreneur who so impressed my fellow bus passenger, have always had the means to buy a jet. And that has powerful implications for maintaining longer term business relationships. Key is understanding clients’ mission profile to help them buy right jets by tailoring the aircraft solution to individual customers.
“You have to engage with them,” said Amalfitano. “They expect you to engage with them. That’s why we are talking about a human-centred approach to the travel experience and that’s what creates that stickiness.”
Meanwhile, Geneva enjoyed a mini heat wave on Monday, with temperatures topping 28 deg C. Back on the bus to the static display, me and my fellow passengers had all the stickiness we could handle.
Michael Amalfitano, president and CEO of Embraer Executive Jets, (L) and Steve Varsano, CEO of The Jet Business were both camera ready at the EBACE static display last week. (Image: EBACE).