Scott’s advice was fresh in my mind, as I listened to Ed Bolen, president and CEO, NBAA explain the growing menace facing aviation. “Business aviation is under full-scale attack,” he told the conference’s 230 delegates. “There is an effort to disparage our industry, which is not consistent with data and our strategy and we see it in a lot of ways. Nor is the problem confined to Europe, it also occurs in the US.”

Evidence is not hard to find. Top of mind were three new US policy initiatives that could significantly damage business aviation. The unholy trinity includes: the Internal Revenue Service (IRS) plans to step up its audits of business jets owners, a plan for longer depreciation periods on aircraft purchases and a planned five-fold increase in fuel tax over five years.

“On February 21st, the IRS said it would do a lot more audits of people who own an airplane,” said Bolen. “The IRS is saying we think there is a lot of non-compliance on personal use.”

Fuel tax and depreciation are also being targeted. “There is a proposed five times increase in [fuel] tax with no real justification. Plus, there is also a proposal for longer depreciation schedules at a time when most policy-makers think shorter depreciation is good for jobs and good our economy,” he added.

Such legislative attacks are not restricted to the US. Earlier this week, Brazilian Congress moved to approve new tax legislation, which could penalise business aviation, according to Felipe Bonsenso, partner with the country’s law firm Bonsenso Advogados.

If enacted, the ‘Imposto Seletivo’ or Selective Tax would apply to aircraft that are considered harmful to the environment and health. The rate of tax increase is apparently still under discussion.

An attack of a more visceral kind took place this week when protestors stormed onto Hanscom Field Airport, near Boston, Massachusetts. Extinction Rebellion protesters climbed a perimeter fence to disrupt airfield operations forcing the temporary closure of the airport. The raid was staged in protest to Massachusetts Port Authority’s plan to build more hangars for business jets on the airport.

The latest protest follows similar action by the group and others targeting private aviation at other airports in North America and Europe – including, notoriously, at last year’s EBACE event at Geneva Airport.

So, what to do when under attack? The NBAA’s strategy is the opposite of the one recommended by my Tucson taxi driver. Instead of backing quietly away from the threat, the NBAA’s policy is to counter it with reasoned argument, backed by hard data seasoned with practical examples of how business aviation is benefiting lives and businesses worldwide.

Business aviation has a wealth of data to back its case and the global industry should find a unified voice to put that case to policy-makers, protestors and the public worldwide, according to the NBAA. Bolen put it like this: “The facts, the truth and the reality are on our side. We really are an important engine for the economy, a vital link in the transportation system, developing remote economies and businesses to grow by staying in contact with the global economy.”

Combating the many threats facing global business aviation demanded a truly co-ordinated industry response. The association aimed to focus that response with its Climbing.Fast campaign launched at the NBAA-BACE in Las Vegas last October. In addition to promoting the industry’s business and community benefits, the campaign aims to highlight the sector’s mission to achieve net zero carbon emissions, including the use of sustainable aviation fuel (SAF) and its leadership on sustainability targets.

The campaign, and the industry it seeks to defend, faces tough battles to win over business aviation’s increasingly vocal critics: That’s even with the campaign’s army of acronym-based ambassadors including NAFA; the reason for my visit to the Tucson Mountains.

*Meanwhile, please do not rely solely on my taxi driver’s advice if you encounter a western diamondback rattlesnake or any other type of venomous reptile this weekend. Always seek professional guidance. (Scott’s contact details can be provided on request).

Note of complaint: NBAA argues against IRS plans to step up audits of business jets owners and plans for longer depreciation periods and higher fuel tax.

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Not silver but sustainable business aviation dominated the two-day event at the resort amid the tall saguaro cacti. Prickly topics under discussion included the health of the US economy, particularly the impact of high interest rates, the disillusion of some first-time buyers and business aviation under attack.

But there was more gain than pain when it came to the upbeat assessment of the US economy from Gus Faucher, chief economist, PNC Financial Services Group. Without minimising the impact of high interest rates, which could (but not necessarily will) pitch the US economy into recession, Faucher highlighted positive factors likely to lead to steady growth this year and into 2025.

“The US economy is in very good shape right now,” he said. “The economy is 8% larger than it was before the pandemic. Some 22m jobs were lost due to the pandemic but those have been regained and another 8-9m jobs added to where we were before the pandemic.” Strong labour markets underpin consumer spending power, which was driving broad-based economic growth across the US, he added.

Returning rates to 2%

But there are reasons for pessimism. The “inverted yield curve” – meaning short-term interest rates were higher than long-term interest rates – was often associated with recessions. Faucher estimated the likelihood of a US recession at about 35%. However, he felt confident that the Federal Reserve would be successful in returning rates to its goal of 2% from their current level of just over 5%.

“There is likely to be slower growth this year but still growth,” he summarised. “Spending will continue to support growth in 2024, with the Fed cutting rates later this year for technical reasons [partly to cool wage growth] starting in July and in 2025. That will support growth this year and into 2025.”

Interest rates are affecting the decision to buy aircraft but not in the obvious way of affecting decision-making, said Shawn Dinning, senior partner, Dallas Jet International. “I don’t see a situation where a prospective buyer or borrower is looking at rates and saying, ‘I can’t afford this deal’. We are not seeing a delay in decisions to buy. About 70% of our business lately has been cash.”

But interest rates are affecting the core business of his clients – principals and corporations. “We do a lot of multi-family-type real estate companies and two years ago they were printing money, now they went from a nice positive cash flow position to bleeding hundreds of thousands if not millions of dollars because of interest rates,” said Dinning. In some cases, owners need the liquidity on the airplane. “They have to prioritise, so the airplane gets the axe,” he added.

On a more positive note, he said: “Demand continues to surprise me in a good way and it’s keeping up with this increase in inventory in a pretty good way.”

‘More transactions in Q1’

Wayne Starling, executive director of International Aircraft Dealers Association (IADA) agreed. “There were more transactions in the first quarter of this year than there were in the first quarter of last year,” he said, based on his association’s latest report.

But Johnny Foster, president and CEO, OGARAJETS reported growing frustration and disappointment among first-time buyers. Before the pandemic, almost every year consistently, first-time buyers accounted for about 5% of the purchases of aircraft. But that figure rose to 38% of buyers between 2020 and 2022, he said.

They came into the market, often buying legacy aircraft with the promise of bonus depreciation and excessive demand for charter. “Now we are hearing and seeing these first-time buyers are disenfranchised with the model because their aircraft is not flying 600 or 1,000 hours a year [through charter]. It’s flying 100 hours a year,” he said. “And their pilots’ salaries have tripled over the past three years, and they are now being told they have to have three pilots instead of two pilots.”

These frustrations were compounded by their first main maintenance event, which “has caught many by surprise”. The legacy aircraft that cost only $2m or $3m to buy could be facing inspection costs of half a million dollars, said Foster.

‘Full-scale attack’

From disappointment to hostility. Business aviation is under “full-scale attack” and not just in Europe, warned Ed Bolen, president and CEO, National Business Aviation Association. “There is an effort to find ways to disparage our industry which is not consistent with data and our strategy. We see it in a lot of ways,” he said. Examples include the February 21st announcement by the Internal Revenue Service (IRS) that it intended to step up its aircraft owner audits.

Other examples cited were the five-fold increase in fuel tax over five years and the plan for longer depreciation periods. Combating these and other threats would rely on a coordinated industry response and lobbying policy-maker, he said. Not least via the NBAA’s Climbing.Fast campaign.

Speaking to CJI after his presentation, Bolen set out his goals for the end of the decade. “By 2030, we will be ready to answer the SAF Challenge of 3bn gallons produced in the US,” he said. “We would like to see operators continue to look for ways to operate even more sustainably.” That means looking at good quality offset programmes and book-and-claim options. “And we are working hard to introduce advanced air mobility and hybrid solutions and the effectiveness of our air traffic integration.”

Despite challenges facing business aviation – not least high interest rates, supply chain difficulties and the shortage of pilots, airframe and powerplant technicians – the industry can look forward to a bright future as wealth generation and transfer continue to fuel demand, according to speakers.

Stephen Friedrich, chief commercial officer, Embraer summed up the reasons for optimism: “Over the next 20 years, we are going to see a $73trn wealth transfer from Boomers to Generation X and Millennials – and that is only just beginning. This is in addition to [aircraft] purchases by corporate flight departments and private individuals.”

Back in the 19th century the silver boom soon turned to bust, with fire consuming the mining town of Quijotoa in 1889. Attendees at the NAFA conference heard strong reasons to believe in a much more sustainable (and profitable) future for business aviation.

Prickly saguero cacti surrounded the conference venue. Inside, delegates discussed thorny topics such as the impact of high interest rates.

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Philipp Zeller, senior vice president Dassault, Business Aviation, Rolls-Royce welcomed the next phase of the engine development programme. “All the tests completed to date confirm the reliability of the engine and show it will meet the performance requirements to power Dassault’s flagship, the Falcon 10X,” said Zeller.

The flight test programme, based at in Tucson, Arizona will include engine performance and handling checks at various speeds and altitudes, inflight engine relights, tests of the nacelle’s anti-icing system and fan vibration tests at various altitudes.

Air tests follow a ground test programme which included the evaluation of the Pearl 10X’s e new ultra-low emissions Additive Layer Manufacturing (ALM) combustor, which is compatible with 100% Sustainable Aviation Fuel (SAF) and a new accessory gearbox, which enables higher additional power extraction. The engine is said to have exceeded its target thrust levels on its first test run will be the most powerful business aviation engine in the Rolls-Royce portfolio, according to the company.

The test programme has now logged more than 2,300 testing hours, both on the Advance 2 demonstrator and the Pearl 10X engine configuration. Combining what is claimed to be the most efficient core of any business jet engine with a high-performance low-pressure system, the Pearl 10X delivers more than 18,000lbf of thrust. Compared with the manufacturer’s last generation of business aviation engines, the Pearl 10X offers a 5% higher efficiency, while delivering outstanding low noise and emissions performance, according to Rolls-Royce. “This combination will enable customers and operators to have premium airport accessibility and fly ultra-long-range connections, whilst also being able to travel close to the speed of sound,” said the company.

The 10X engine is the third power plant in Rolls-Royce’s Pearl line. The Pearl 15 engine equips the Bombardier Global 5500/6500 and the Pearl 700 powers the Gulfstream G700/G800.

Rolls-Royce traditionally names engines after British rivers, featuring in its portfolio the Trent, Tay, Derwent and Welland engines. Striking a more international nomenclature, its Pearl engine may have drawn inspiration from rivers located in two vast potential markets. There are Pearl rivers in the US, located in Mississippi and Louisiana, and in Guangdong Province, southern China.

The Falcon 10X, powered by the Pearl 10X, is expected to enter service in 2027 – two years behind schedule.

The Pearl 10X engine undergoing flight tests on a Boeing 747, based in Tucson, Arizonia.

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The new terminals will be based at Miami’s Opa-Locka Executive Airport (KOPF), Montana’s Bozeman Yellowstone International Airport (KBZN) and Arizona’s Scottsdale Airport (KSDL).

“More people than ever are electing to travel by private aircraft,” said Megan Wolf, chief experience officer, Flexjet. “This increase in traffic means the large general aviation FBOs in popular departure and arrival points are more hectic than in the past. Flexjet’s owners-only lounges offer comfort and amenities to ease the transition from the jet to your final destination.”

The Miami terminal is expected to be the first to open and will include amenities such as a bar and café, modern conference rooms and dedicated concierges. It will also serve as the seasonal hub for the firm’s South Florida helicopter service, which Flexjet says is an industry first. The helicopter division was launched to provide last-mile transport for owners of Flexjet aircraft travelling from airports to final destinations.

Eli Flint, president, Helicopter Division, Flexjet said: “Industrywide, there has been little integrated connection yet between fixed-wing operations and urban air mobility. A journey isn’t just from one airport to another, it should go beyond that to enable a passenger to access off-airport destinations, or even airports too small for jets.”

He added: “Flexjet’s innovative helicopter service will provide a complementary step that will save travellers time and add convenience.”

Once completed, the new terminals will bring the company’s tally of private terminals to eight across the US. The other five are located at: Naples Airport in Florida (KAPF), New Jersey’s Teterboro Airport (KTEB), Westchester County Airport in White Plains, New York (KHPN), Dallas Love Field, Texas (KDAL) (pictured) and Van Nuys Airport in Los Angeles, California (KVNY).

There has recently been an influx of capital to the industry, with Cogent Bank expanding into the jet financing industry with Business Aviation Vertical earlier this month. Kenn Ricci, the owner of Flexjet, spoke about how new business capital is reshaping business aviation at Corporate Jet Investor Miami 2022.

Ricci is speaking at Corporate Jet Investor London 2023.

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The delivery was the first of six mission-configured aircraft fitting demands of BACN special missions, to be supplied under the 2021 contract.  Announced in June 2021, the contract represents a potential total value of up to $464.8m.

Bombardier’s president and CEO, Eric Martel said: “The defence sector is a key pillar of Bombardier’s future as our ultra-reliable and high-performing platforms are best suited to house and operate complex mission equipment.” 

Bombardier Global aircraft technologies enable uninterrupted communications between surface and air, with minimal complications from high altitudes, mountains or distance, according to the OEM.

Steve Patrick, vice president, Bombardier Defense highlighted the versatility of the Global 6000 aircraft: “Our best-in-class Global aircraft platform offers the complete package – proven reliability, significant payload capacity, ample available power and the highest degree of stability to support sensitive equipment.

“This, along with top notch design, manufacturing and certification expertise required to carry out modifications makes Bombardier Global aircraft the optimal choice for conversion to specialised assets,” he added.

Modifications to the Global 6000 were carried out by engineers and technicians at the new Bombardier Defense US headquarters in Wichita. Teams at Bombardier’s Tucson, Arizona site completed the interior and exterior work on the aircraft.

Lieutenant colonel Eric Inkenbrandt, USAF said the BACN programme reduces communication problems associated with incompatible systems, adverse terrain and distance.

“BACN increases interoperability which results in forces that execute faster, more reliably, and with less risk to the war fighter,” he said. “The delivery is the pivotal first step to advancing the mission this programme provides.” he added.

The next two deliveries of BACN-equipped Global aircraft, referred to as the ‘E-11A fleet’, are expected in 2022 and 2023. The USAF also plans to purchase an additional aircraft each year until 2025.

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