Business aviation set for 10 years of (green) growth

Mike Stones
By Mike Stones February 4, 2020 08:03

Business aviation set for 10 years of (green) growth

Corporate Jet Investor’s 10th London 2020 conference opened today under typically grey, chilly February skies. But inside, the atmosphere was distinctly warmer, and definitely greener, as delegates heard predictions of strong prospects for business aviation over the next 10 years – provided the sector could win over its environmental critics.

David Coleal, President Bombardier Aviation, highlighted the industry consensus that there will be 7,000 new aircraft deliveries between 2019 to 2028, representing growth of about 28% on the previous nine-year period. “The years up to 2028 will see a CAGR [compound annual growth rate] of 2.4%, which is not unusual for a lot of industries,” Coleal told the 250-plus conference delegates.

The biggest growth was likely at both ends of the size category. Large category business jet deliveries would rise by 52% to 2,400 deliveries, with light jets deliveries climbing by 22%. The medium size category was likely to rise by 14% with 2,200 deliveries.

Coleal said growth would be underpinned by strong industry fundamentals with industry drivers focusing on the continuing rise in wealth creation, the globalisation of trade and strong demand from emerging markets. In the near term, he picked out three factors that would have an impact on demand for business jets: accessibility to airports, a focus on passenger well-being and smart cabins.

Accessibility referred to improving journey times to airport using technology such as eVTOLs. “These aircraft will not take demand away from business aviation, it will enhance customers’ ability to get to the airport to take a private jet. So, the industry should embrace eVTOLs.”

‘Industry should embrace eVTOLS’

The trend towards passenger health and well-being would be reflected in an increasing preference for flight at low pressure altitudes, he said. There would also be an expectation for lower noise and vibration levels, using light settings to synchronise with circadian rhythms to help passengers feel healthier.

Also smarter cabin technology would enable the growing popularity of voice-command systems to close the shades, he continued. “Cutting edge connectivity will continue to improve,” said Coleal. “Even now a lack of connectivity is AoG [Aircraft on Ground event] and the aircraft would not be launched. Passengers expect to stream real-time data in large volumes and do that wherever you are in the world.”

But in order to realise the potential growth in business aviation, the industry needs to persuade younger generations that it is part of the solution to climate change not the problem. “We need to demonstrate leadership in this area because headlines are translating to real activism [against business aviation].” Coleal said the industry needed to remind particularly young people that the industry was contributing to climate change solutions – with fuel efficiency improving by 40% over the past 40 years and the development of Sustainable Aviation Fuel (SAF).

“These are the future buyers [for private aviation],” said Coleal. “We have to demonstrate that we are a forward-thinking industry that is taking action on climate.”

The need to communicate more effectively with younger generations was picked up in following sessions. Aoife O’Sullivan, Partner with The Air Law Firm, was blunt: “There is a general perception we are flying fat cats about and I don’t think, as an industry, we do enough to combat view.”

Clive Jackson, Victor’s founder and CEO, said: “Generation Z is driving the debate. When they think about climate emergency they look up to the skies. So, we have to think about how we project ourselves.”

For example, commercial aviation accounted for about 4% of carbon dioxide emissions, while business aviation was responsible for just 0.04%. Better communication of key facts about the industry – including its contribution to economic growth and job creation – together with the widespread adoption of SAF and carbon offsetting were viewed as important means of the industry answering its many critics.

Mark Masluch, Bombardier Aviation’s director of public affairs and communications, had some simple advice for business jet operators: “Purchase SAF and when you’ve purchased it, purchase some more. You can look at carbon offsetting but, in practice, buying SAF will drive demand and increase supply.” At present, SAF is up to four times more expensive than SAF and is produced in only three or four locations worldwide. But growing demand would both improve its availability and reduce its price.

‘Must be SAF’

A number of speakers saw a role for governments in helping to stimulate demand for sustainable fuel. Tom Parsons, Air BP’s low carbon commercial development manager, said that last month Norway became the first country to require the use of SAF. “From January, 0.5% of all aviation fuel consumed in Norway must be SAF and Sweden is expected to follow suit.”

Nancy Bsales, carbon offset provider and strategist, with Aero Carbonfund, said carbon offsetting by planting trees could make a major contribution to helping business aviation respond to climate change during the time it took for SAF to become more widely available.

Mike Silvestro, CEO Flexjet, detected a new trend towards big corporate operators making more considered decisions about fleet extensions. “We are seeing corporate flight departments become more thoughtful about how they deploy capital,” said Silvestro. “Instead of buying a fourth or fifth plane, they are asking about a shared solution, such as ours, to supplement their existing fleet.”

Don Dwyer, Guardian Jet managing partner, said that he noted High Net Worth Individuals now g the market to buy a used airplane but still spending $20-30bn.

Dassault’s Anne Devilliers believed environmental criticism was driving some to consider fractional ownership rather than outright purchase. “We hear people say they don’t want to be on the frontline of the battle [over private jet ownership] and that will increase NetJets’ share.”

So, while there were few green shoots in evidence outside the CJI London Conference venue in the chilly February weather, inside much of the debate about the future of business aviation was coloured by green topics.

Mike Stones
By Mike Stones February 4, 2020 08:03

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