The optimist’s guide to 2017

Alasdair Whyte
By Alasdair Whyte January 7, 2017 11:00

The optimist’s guide to 2017

There are a lot of articles warning that the world faces real uncertainty in 2017 – including Bloomberg’s pessimist’s guide. But instead, let’s look at how the business aviation market could look if everything goes brilliantly. Here is an optimist’s guide to business aviation in 2017. Best wishes for a happy, healthy and prosperous New Year. Just please do not blame me if none of this happens.

January: Trump makes business aviation great again
US business aviation has felt under attack from politicians for the last nine years. It started when automakers went to Washington to ask for cash in 2008 and President Barack Obama attacked business aircraft tax breaks several times. But that is all in the past. On January 22 the country gets a President who has already owned several business jets.

OEMs report strong interest from key business aviation states like Florida, Arizona, North Carolina and Ohio which went to President Trump. As a dealmaker, Trump is proud to tweet that he has sold a G650 and a Boeing Business Jet to the first foreign leader to visit Washington.

February: FAA and EASA become BFFs
A freak snowstorm traps the senior management teams from both the US FAA and EASA in an airport bar overnight (they had been separately flying to Montreal for an ICAO meeting). By morning they have knocked up a formal agreement on some napkins agreeing to simplify and harmonise all regulations. OEMs, operators and maintenance companies celebrate the news.

March: Brexit means business jets
The UK triggers Article 50 formally starting the process of leaving the European Union. Negotiations between the country and the rest of the European Union start badly when a joke by Boris Johnson, Britain’s foreign minister, is taken the wrong way. Things get worse when he tries a second one.

It becomes clear that the UK will not be signing up to freedom of movement and that European Union members are not looking to offer Britain a special deal.

This means that from 2019 Europeans will face long queues at UK airports. So will Britons arriving on the Continent. Although Britons pride themselves on queuing, many UK corporates – and European ones with British interests – see an aircraft as a way of skipping the biggest trouble. Sales in Europe boom.

April: Cash is back
President Trump’s plans to encourage US companies to bring back cash from their international operations is a huge success. The amounts involved are staggering. Apple has $216 billion overseas, Cisco $60.6 billion and Coca-Cola $22.4 billion. But there are many smaller US firms that also take advantage of the policy.

As well as share buy backs and mergers, US corporations use some of this cash to upgrade their fleets.

May: Charter is cool
On Twitter the tag #jetset is everywhere. Online platforms and membership companies have opened up business aviation to younger clients and it suddenly clicks in 2017. The summer sees record aircraft utilisation and sign ups. The owner of the factory which makes Wheels Up baseball caps buys an ACJ.

July: Rising oil prices rejuvenate international buyers
Everyone had forgotten that the oil analysts who predicted that fuel will stay below $50 a barrel for 2017 were the same ones predicting $200 barrels in 2010. And they have got it wrong again. Oil hits $100 a barrel by May and $150 in July as it becomes clear that producers have cut too deep. Finance ministers in oil producing countries in the Middle East and Africa breathe a sigh of relief. Demand for business jets soon returns.

November: China takes off again
It is no surprise when President Xi is re-elected at the Autumn Chinese communist party congress. But it is a real shock when he mentions how aircraft of all sizes are a key part of the “One Belt One Road” policy – including business jets. He says that airspace will be opened up and controlled by a new air traffic control organisation.

Not wanting to be left out, the next day, India’s President Narendra Modi announces that India has already started building 100 business aviation airports.

 

Alasdair Whyte
By Alasdair Whyte January 7, 2017 11:00