CJI Global 2020 Conference

59 sessions, 31 panel discussions, 28 solo presentations

More than 4,000 delegates (so far) from around the world attended our first CJI Global 2020 virtual conference on July 8th. Over 140 speakers from 22 countries delivered 30-plus hours of content. Words: Mike Stones

CJI Global 2020 Conference

59 sessions,

31 panel discussions,

28 solo presentations

More than 4,000 delegates (so far) from around the world attended our first CJI Global 2020 virtual conference on July 8th. Over 140 speakers from 22 countries delivered 30-plus hours of content. Words: Mike Stones

IT’S THE MULTI-million-dollar question for business aviation: Will the business generated by newcomers to private aviation outweigh that lost to dwindling corporate aviation flights? And when will business aviation, including corporate flights, return to pre-Covid-19 levels?

While definitive answers to those questions are some time away, the early indications were positive, according to Patrick Gallagher, President of NetJets – the world’s largest business jet operator. “New interest in private aviation is up like nothing I’ve ever seen before,” he told delegates. “And now things are beginning to thaw out and the markets are starting to re-open, we are beginning to convert these people to customers.” May was the company’s busiest month for new customers, defined as those making a significant financial commitment, since December 2007, as they reacted to decimated airline schedules and Covid-19 safety concerns.

“There are a lot of people [including Ultra High Net Worth Individuals] sitting on the sidelines who have the means to fly privately but viewed it as a luxury they didn’t need,” said Gallagher. “Now, they look at it as a necessity if they want to see their grandkids again or move between homes.”

Would NetJets retain its new customers? “It’s a very sticky business. Once you get a taste for flying privately, it’s difficult to go back,” he said. But Gallagher was careful to avoid over-optimism. “I still think there is some long-term economic carnage that it will take us all a while to work through.”

Shawn Hall, Signature Aviation’s chief commercial officer, also highlighted the potential for private aviation to attract new ultra-wealthy customers. “A study from McKinsey showed that only 10% of those who have the wealth to fly privately are doing so. 10% doesn’t sound like high market penetration to me.”

Like the NetJets’ boss, Kevin MacNaughton, Air Partner’s MD, predicted the charter market would retain many of its new customers. “The charter market will be stronger because the base level [of new customers] will start to mature. And when they get the hook for flying privately, it’s hard not to continue.”

Alasdair Whyte, CJI co-founder, chaired for 12 hours.

Many speakers believed private jets are becoming the new business class, with Covid-19 offering an opportunity to carve out new safety-conscious clientele. “Private aviation will be seen as a much better option for people,” said Steve Friedrich, chief commercial officer Embraer Executive Jets. “There were about 35 touch-points for people travelling by business or private aviation compared with about 700 for an airline.”

In fact, airports would become one of business aviation’s “best allies”, according to David Dixon, Jetcraft Asia President. “Take a 777-worth of passengers; it’s half a mile long to queue up under current spacing regulations,” said Dixon. “So, I think the airports are going to be business aviation’s best-selling point.”

Turning to aircraft values, inevitably, Covid-19 is continuing to depress the price of pre-owned business aircraft but not drastically, judging by the panel Reborn in the USA – selling aircraft in 2020 and 2021.

“We haven’t seen pricing drop 50% or more off pre-Covid levels and we haven’t seen desperation among sellers,” Jay Mesinger, CEO of Mesinger Jet Sales, told delegates

“We are seeing more manageable price reductions of 5% to 20% depending on the type of airplane and its age and technical capabilities.”

Kevin White, Jet Edge Partners’ President, agreed with that price range with “oftentimes 10% being the sweet spot”. White reported encountering many first-time buyers – or people who claimed they intended to buy – prompted by safety concerns “We are seeing a lot of first-time buyers who are taking the never-again-on-an-airline approach. But whether they are just wannabe buyers will remain to be seen.”

Brian Proctor, Mente Group CEO, believed there would be a knock-on effect for manufacturers. “New OEM pricing is not rationalising as fast as the pre-owned market. There will be a place where OEMs have to shift their pricing.”

Alireza Ittihadieh, Freestream Aircraft, President and CEO, noted a distinct preference for midsize aircraft: “In the Americas, I am seeing a tremendous amount of demand for midsize aircraft,” he said. “All we hear is $4m - $6m aircraft, which eliminates long range cabins. What I am seeing is an audience which has the capability to buy an aircraft and hasn’t yet done so, starting in the charter market.”

The mood of cautiously steady but realistic optimism evident among most presenters and panellists was mirrored by CJI Global 2020’s 4,000 plus delegates. Three-quarters of respondents taking part in our close of conference survey were either Very optimistic (23.08%) or Fairly optimistic (51.92%). Also, nearly 80% thought the key reason for an uptick in business aviation would be the health and safety of principals. ■

Industry Sponsors

CJI would like to thank all the sponsors for making our first virtual conference possible.

Event Sponsors

Action Aviation • AIC Title Service • ACJ • Avinode Group • BBJ • Bombardier Aviation • Citadel Completions • Clay Lacy Aviation • Collins Aerospace • Embraer • Gilchrist Aviation Law • Jet Edge • JSSI • McAfee & Taft • NetJets • PNC Aviation Finance • Stonebriar • The Registry of Aruba • Viasat

Category Sponsors

Bermuda Aircraft Registry • Conklin & de Decker • Global Jet Capital • Inmarsat Aviation • MySky • Pratt & Whitney • Sentient Jet • Shackelford, Bowen, McKinley & Norton LLP

Region Sponsors

DC Aviation Al-Futtaim • IQ-EQ • Krimson Aviation • Pillsbury • Priester Aviation

Global perspective: More than 140 speakers from 22 countries contributed to the conference.

Virtual conference highlights

Hover over the numbers for the highlights

Virtual conference highlights

01. Ed Bolen – NBAA President and CEO “We are pleased that lawmakers and regulators recognise that business aviation is critical to our nation’s economy and our transportation infrastructure. They’re taking necessary steps to make sure that we not only survive but find ourselves in a position to thrive when the coronavirus challenge has been met.” Stream 2 Session 11 – Working with regulators

02. Rob Scholl – Textron Aviation VP of Sales “As long as there is political stability there, Latin America holds tremendous potential. Traditionally, Brazil is our second largest sales market outside the US, so it’s incredibly important.” Stream 3 Session 15 – Latin America

03. René Banglesdorf – IAWA board member “There are a lot of really bright women, young people, really bright people of colour. We shouldn’t just look, as an industry, to people who have typically filled industry roles.” Stream 1 Session 11 – Expanding the workforce

04. Andrew Collins – Sentient Jet CEO “We are seeing more new clients purchasing cards. Usually the mix is about one third new and two thirds clients repurchasing cards. Now, we are seeing 60% new.” Stream 2 Sesson 12 – US charter & jet card market

05. Felipe Bonsenso – CAL Law Partner “I’m very positive about business aviation in Latin America. It [Covid-19] has made a lot of clients, who were not interested in buying a business aircraft to find alternative solutions.” Stream 3 Session 15 – Latin America

06. Steve Friedrich – Embraer Executive Jets Chief commercial officer (CCO) “We have to find a way to support the needs of the community. Then, business aviation will be seen as a tool for productivity and good for economic growth. It’s also good to say we’ve been flying around PPE.” Stream 2 Session 21 – Business aviation 2030

07. Patrick Hansen – Luxaviation Group CEO “There is no time to waste to take the necessary, albeit painful decisions [about restructuring].” Stream 2 Session 5 – The view from Luxaviation

08. Justin Bowman – Air Charter Service CEO “After the Financial Crash, it took several years to retain some semblance of normality. By 2025, we will see it back to where it was before we entered the Covid-19 crisis.” Stream 2 Session 7 – European charter

09. Dawit Lemma – Krimson Aviation Founder “If you look at the type of flight conducted – repatriation, cargo, medevac – it was all essential flying. So, I think this region has experienced growth or opportunities because of Covid.” Stream 2 Session 6 – What next for Africa?

10. JP Fourie – National Airways Corporation Executive director & AfBAA member “Affordability is a big issue. We need to get away from the perception that business aviation is elitist travel. Business aviation provides a key to starting new mineral projects, new oil projects and new greenfield projects.” Stream 2 Session 6 – What next for Africa?

11. Jenny Lau – SinoJet President “It’s now much easier to operate in China, if you’re not coming from overseas. China is now back to 80% of normal [business flight] activity – as long as it is not from overseas. But some airports are more difficult [in terms of restrictions] than others.” Stream 2 Session 3 – Operating in Asia

12. Sarah Kalmeta – AsBAA/Pivot Point “We’ve seen competitors getting masks for each other and moving PPE on jets as they travel around to make sure the staff are protected and things of that nature. I think that the resilience and the SARS experience in this region is why Hong Kong has done so well as well as some other Asian countries. They reacted quickly.”

13. Yosef Hafiz – NASJET Vice President “We are reliant on government projects and are starting to see the government pick up in flying. The owners are dying to fly out of the country, so we are hoping it will pick up by the year's end.” Stream 2 Session 2 – Middle East Panel

14. Hamish Harding – Action Aviation Chairman “We do business around the world and it’s been very active in other regions but the Middle East has been quite quiet. But we do see a lot of new buyers coming up in the coming months.” Stream 2 Session 2 – Middle East Panel. ■

image

Mike Stones,
Group Editor,
Corporate Jet Investor

image

Mike Stones,
Group Editor,
Corporate Jet Investor