The event, held from May 28th to 30th, is co-hosted by the European Business Aviation Association (EBAA) and the National Business Aviation Association (NBAA).

Jet Aviation will deliver a 35% blend of SAF to GVA for the event, marking the company’s third year providing SAF for EBACE.

“We are delighted to bring SAF to EBACE again this year,” said Joao Martins, vice president of FBO operations in Europe and GM Zurich, Jet Aviation. Jet Aviation will also make SAF available through its book and claim program.

In addition to ensuring availability of SAF, the event offers a variety of sustainability-focused experiences including a dedicated summit to help the industry towards net-zero, cutting-edge alternative propulsion technologies, future of urban transportation,  and the Innovation Pavilion to unveil next-generation sustainable aircraft and new industry sustainability standards.

“Business aviation is increasing efficiency and reducing carbon emissions on the ground and in the air. SAF remains a cornerstone of our plan for achieving net-zero carbon emissions by 2050. We thank Jet Aviation for stepping forward to make SAF and its benefits available to those joining us at what will be an exciting EBACE,” said Ed Bolen, President and CEO, NBAA.

Meanwhile, EBAA Secretary General Holger Krahmer said: “We need to continue to increase the availability, production and use of SAF, and we applaud Jet Aviation for playing such an important role in expanding sustainable fuel supplies around the world.”

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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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The Massachusetts Democrat Senator last week announced a bill with New York Congresswoman Nydia Velázquez that aims to tax business aircraft fuel. His Fuelling Alternative Transportation with a Carbon Aviation Tax (FATCAT) Act (can you see what he did there) wants to raise fuel taxes for private jet travel from $0.22 to $1.95 per gallon.

“The 1 percent can’t free ride on our environment and our infrastructure at a discount,” said Senator Markey in a statement. “Billionaires and the ultra-wealthy are getting a bargain, paying less in taxes each year to fly private and contribute more pollution than millions of drivers combined on the roads below. It’s time to ground these fat cats and make them pay their fair share so that we can invest in building public transportation that communities across the country and our economy desperately need.”

They want to use cash from the tax to support air monitoring for what they call environmental justice communities and long-term investments in clean, affordable public transportation across the country. This would include rail and bus routes near commercial airports.

The National Business Aviation Association is not impressed. “Business aviation pays for its use of the aviation system through a fuel tax, which has many benefits, including that the tax you pay at the pump goes directly toward aviation system upkeep and upgrades, not to non-aviation related expenditures,” said the association in a statement.

“If Congress wants to debate the amount of the fuel tax, that is its prerogative, but we oppose efforts to unfairly single out one mode of transportation for punitive tax treatment, especially for expenditures unrelated to investments in preserving our nation’s world-leading position in aviation.”

Washington insiders say that it is unlikely that Markey’s Bill will ever become law. But the business aviation industry should take it as a warning sign. (Pictured in the United States Capitol).

Lobbyists, protestors and lawmakers are increasingly linking environmentalism with inequality. Earlier this month three protestors from Spain’s Futuro Vegetal (Vegetable Future) and Extinction Rebellion (surely there is an opportunity for an investment bank to do some M&A here) spray painted a business jet at Ibiza Airport. Their colleagues then targeted a superyacht at the marina, a Lamborghini and a couple of night clubs.

Demonstrators painting aircraft and blocking airports are more than a nuisance. They are encouraging politicians and donors to go after business aviation. We have already seen the interim CEO of Amsterdam’s Schiphol threaten a ban on business jets and France attempting to ban short-haul flights. A few members of the California State Legislature this year tried introducing rules that would block flights for aircraft that were carrying less than half their maximum capacity.

Many business aviation companies are gearing up for the 2024 elections where jets are essential for most candidates. We look forward to Senator Markey campaigning across the Commonwealth of Massachusetts – including its many islands like Nantucket – by train, bus, bike and canoe at the next election. If he steps into any business aircraft – helicopter, piston, turboprop or jet – he will be a hypocrite. And no politician would ever want to be called that.

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“We are pleased that lawmakers and regulators recognise that business aviation is critical to our nation’s economy and our transportation infrastructure and 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,” said Bolen.

Contributing to the CJI Global 2020 forum Working with regulators – the view from associations, he highlighted the work of NBAA and other associations  to ensure the concerns of the business aviation community are addressed by the US government under the Coronavirus Aid, Relief and Economic Security Act; widely known as the CARES Act.

He also acknowledged some frustration on the part of companies owning and operating their own aircraft that they were not flying more frequently. “There is some pent-up excitement about the ability to get back [to full flight operations],” he said. “But there are concerns the coronavirus is not lessening its grip [in the US] at the present time.”

‘Pent-up excitement’

The NBAA boss added that he was excited new customers were coming to the industry and that the sector had a great opportunity to showcase what it can deliver for society and the economy.

Tim Obitts, President and CEO of the National Air Transportation Association (NATA), spoke of the big personal emotional costs exacted on individual operators by the Covid-19 crisis. In telephone conversations, some were reduced to tears at the prospect of having to make staff redundant or furlough them, he said. But he went on to describe a “huge pick up [in business aviation] over the past three weeks”. However, customers remained cautious because of the recent uptick in Covid-19 cases in the US. “We need to demonstrate that we [as an industry] are safe, clean and secure,” said Obitts.

Airports cutting their presence at US regional airports represented a significant opportunity for business aviation. “Corporations still have senior executives that need to fly and there’s cargo that needs to be transported,” said Obitts. “That’s what business aviation does. So, we have a great story to tell.”

‘Leading indicator of recovery’

Bolen suggested that business aviation may recover quickly – unlike in previous downturns. “Oftentimes, business aviation has been a trailing indicator of recessions. But this time, there are indications it is a leading indicator of recovery,” he  said. “I think there’s a sense that, this time, we can lead, facilitate and foster that recovery. Our members can actually lead the sprint and hand off the baton as we go forward.”

Athar Husain Khan, secretary general of the European Business Aircraft Association (EBAA), said the Covid-19 crisis offered a major opportunity for business aviation in Europe. Private aviation operated from more airports than commercial airlines and was proving much quicker to recover from the Covid-19 crisis. “Within  Europe, business aviation operators use three times as many airports than commercial operators,” Khan told delegates.

“If there’s an aviation that can lead the recovery, it is business aviation. These arguments are gaining traction and seeing recognition at regulatory and political level,” he added.

Meanwhile, you can watch panel discussions and presentations from CJI Global 2020 here.

Working with regulators – the view from associations

-Athar Husain Khan, secretary general of the European Business Aircraft Association

-Ed Bolen, President and CEO of the National Business Aviation Association

-Tim Obitts, President and CEO of the National Air Transportation Association.

Tim Obitts:  Business aviation “has a great story to tell …”.

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Global business aviation needs “strategic planning and metrics” to boost its ethnic and gender diversity, according to Pamela Williams, Human Relations director, Organization of Black Aerospace Professionals (OBAP).

Addressing the CJI Global 2020 forum Expanding the business aviation workforce, Williams told delegates: “It has to be a strategic conversation in a board room and there has to be a strategic plan around it. How do we implement processes, plans and metrics to tell us we are really putting our money where our mouth is [on expanding ethnic diversity]? Or are we continuing to give this lip service?”

Sierra Grimes, senior manager of registration and programmes, National Business Aviation Association (NBAA), urged diversity groups in private aviation to act together. “We have groups like IAWA [International Aviation Women’s Association] and the Latino Pilots Association, which have been working for their sectors for years but it’s all been in silos.

‘It’s all been in silos’

“If we can make the time to come together as a group and build a picture of what diversity in this industry looks like, by having that conversation with each entity represented, that’s how you can really push the needle [on improving diversity].”

Williams added: “We can get this done but we have to be very intentional about it.”

René Banglesdorf, co-founder and CEO of Charlie Bravo Aviation and IAWA Advisory Board member, warned that business aviation was “missing out on an entire talent pool”, when recruiting the next generation. “There are a lot of really bright women, young people, really bright people of colour. We shouldn’t just look, as an industry, to the people who have typically filled industry roles.”

Banglesdorf also highlighted the need to attract new groups of customers. “I feel we are not reaching out to new groups of customers because we don’t get our messaging right. If we only have one homogeneous group to which we are developing messaging, we are missing out.”

‘New groups of customers’

After monitoring female ownership of aircraft for about 10 years, Banglesdorf noted the percentage was about the same as women leaders in the industry – about 5%. “So yes, we are missing out on a huge customer base because of that.”

Shelley Svoren, Vice President of Next Gen, IAWA and board member, also spoke passionately about the urgent need to improve gender and ethnic in business aviation. “It’s not enough to hire a diverse workforce,” Svoren told delegates. “You must bring them to the table to be part of the discussion. It doesn’t work if you’re hiring women for the sake of hiring women. Or hiring ethnic minorities to check a box. Make it real, bring us with you and listen to us.”

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