Rising from the ashes of 2008 economic crisis and dispelling Brexit fears, business aviators gear up for the upcoming EBACE 2018
While the 2018 European Business Aviation Convention & Exhibition (EBACE2018) doesn’t kick off until May 29, this edition has the business aviation community very eager. Especially, after the recent global changes such as the Brexit as well as the trickle-down effect of The Tax Cuts Act in the United States.
The 3-day long, European Business Aviation Association (EBAA) and the National Business Aviation Association (NBAA) hosted event, will bring together 13,000 business aviation professionals, feature hundreds of exhibitors as well as static display with more than 50 aircraft and numerous education sessions. And, if that isn’t enough, ‘Jetman’ Yves Rossy will kick-start the event’s Opening Session this year. The Swiss militarytrained pilot, Rossy, has invented a series of experimental individual jetpacks and is currently using a self-designed jetpack with top speed of more than 150 knots, carbon-fiber wing and four miniature jet engines.
NUMBERS DON’T LIE
According to intergovernmental organisation Eurocontrol, the last aviation boom in the European skies was in 2002-07 and after the mighty lows during the Great Recession of 2008, the situation seems to be on the mend from 2010 onwards barring a few dips between 2012 and 2015. Then, in 2016 United Kingdom bowed out of the European Union resulting in Britain and the remaining twenty-seven EU members fumbling to forge new relationships. EBAA has also released a Brexit analysis report that calls for negotiators to preserve the current aviation relationship. According to EBAA, business aviation contributes a total of 1,92,000 jobs to the European economy directly, with an additional 1,82,000 estimated to be generated indirectly.
Meanwhile, the competitive Tax Cuts Act introduced by the Donald Trump administration in the United States of America, isn’t pleasing the Europeans either, mostly due to the feature of the legislation that offers much-lowered corporate tax rate. So much so that EU finance ministers have vocalized that the legislation violates World Trade Organisation rules and could lead to discrimination against European companies, simply as Germany’s acting finance minister, Peter Altmaier puts it, “We want to avoid companies moving their headquarters from Europe to the US and we want to avoid investment flows being redirected.” Though it may be too early to tell the implications of the reform on the European business aviation manufacturers, their American counterparts such as Gulfstream did report that the company’s flagship G650/G650ER just had its best quarter since 2014.
However, the initial actionable market intelligence providing startup company, WINGX reportedly noted that August 2017 was the busiest ever August for flight activity, exceeding August 2008 by 1.3 per cent.
Millennials, the future customers of business aviation industry, have a different approach to how they buy and use things compared to previous generations, since they use “the device in their palm to buy everything they need and then share it with everyone they know,” says Embraer’s Michael Amalfitano in AvBuyer
And it seems that charter business model is one of biggest reason behind it with jet charter activity up more than 10 per cent year-on-year. It should also be noted that aviation industry is cyclical in nature and business aviation even more so since it is affected by the region’s economic condition. However, the charter boom has spelt doom for private jet ownership. According to WINGX Advance’s findings, the growing realisation that charter jets are a more cost-effective travel to business meetings or a stress-free vacations as well as the current unstable economic climate, are working against the private ownership of aircraft.
Though the majority of the total business aviation flights in Europe, 63 per cent to be precise, are concentrated in five countries – France, United Kingdom, Germany, Italy and Switzerland, the smaller markets have also finally started warming up. As of January 2018, Greece, Belgium and Portugal saw a 15 per cent growth this month, with flights from Poland and Croatia up 25 per cent while private jet flights from Turkey recorded a 6 per cent hike, as reported by AvBuyer, the online aircraft market that brings together buyers and sellers of jets. The website also pointed out the ‘millennial’ effect on the business jet world. Embraer’s Michael Amalfitano spoke to them saying, “We believe there’s a new platform—a new ecosystem—out there... It’s no longer about the airplane. It’s no longer about owning the plane. It’s very much about how you want to create an experience for the passenger, to have the experience of corporate flight.” He reportedly said that this is happening because millennials , the future customers of the industry, have a very different approach to how they buy and use things to previous generations, since they use “the device in their palm to buy everything they need and then share it with everyone they know.” Does that bode well for the much-needed digitalization of the business aviation industry? Only time can tell, but herself a millennial and charter jet aggregator, Kanika Tekriwal of JetSetGo, echoes the same sentiments, “I personally believe that at the gate of the airport, the driver should be able to scan a barcode on his phone and drive to the plane. You don’t need so much shoo-sha manpower of someone opening the gate or someone doing this and that,” she says, adding, “No one in private aviation has so far understood data and use it as a resource.”
FLIGHT TO REDUCE THE FOOTPRINT
But what’s remarkable about their slow ascend to the top after an almost decade long slump is environmental responsibility standards that have been duly maintained. Carbon emissions generated by airport operations account for up to 5 per cent of total emissions from the aviation sector, and engagement of the airport industry is important to toe the guidelines set in the Paris Agreement. Furthermore, being environmentally conscientious also serves the interests of the aviation industry since preventing extreme weather from climate change works such as storms, heatwaves and turbulence will affect air travel. According to the planning of the European branch of Airports Council International (ACI Europe), about a 100 European airports are expected to be carbon neutral by 2030. The council has doubled its carbon neutrality target for 2030 in support of the Paris Climate Change Agreement, which aims to hold the global average temperature rise to 1.5°C.
Geneva Airport, which is also the site of the static display of aircraft at the annual EBACE, went the ‘carbon neutral’ route last year, earning the highest level (3+) in the Airport Carbon Accreditation (ACA) campaign created by Airports Council International Europe. Even on the economic front, Geneva has had the largest revenue month with the highest number of flights ever recorded in August 2017. The third busiest business aviation airport in Europe, Geneva Airport is the 37th airport in the world to achieve carbon neutrality.