CJI London, Day Two: ‘India is the new China’ and ‘good SAF/bad SAF’

India shows "a willingness to buy airplanes", said David Dixon, Jetcraft Asia.

“India is the new China,” according to David Dixon, president, Jetcraft Asia. Speaking on the second day of CJI London 2024, Dixon joined the panel Selling Aircraft in 2024. Also dominating the discussions were the return to more normal trading conditions for pre-owned aircraft, rising costs, the future of charter and how social media can benefit business aviation.

“India has the same problems as China – lack of infrastructure and legislation – but it also has a willingness to buy airplanes,” Dixon told delegates. So, while the country lacked airports to support business aviation, “India was the one to watch”.  Also showing potential were other countries in southeast Asia, such as Indonesia, and Australia, he added.

Dubai-based Action Aviation also favoured the prospects for growth in India. “There are a lot of aircraft transactions going in and out of India,” said the company’s CEO Mark Butler. “And they are big aircraft too – BBJs and Globals. That’s where our focus will be in 2024.” Also, many owners from the subcontinent are choosing to base their aircraft in Dubai, he added.

It wasn’t just buying habits in Asia that were changing. Speakers reported a significant shift in power from sellers to buyers in pre-owned aircraft negotiations. Sellers are having to learn new “dance steps” to court increasingly choosy buyers, said Matt Rosanvallon, director, Sales and Acquisitions, Freestream Aircraft.

‘Need to dance again’

“Sellers will need to dance again [with prospective buyers], to court them and to be more fluid [in how they facilitate sales],” said Rosanvallon. Last year “a sense of normalisation” returned to the market after “the crazy highs” of 2022.

Sellers should reognise the significant market towards lower prices, counselled John Odegard, managing partner, 5×5 Trading, formerly Wheels Up Aircraft Sales. “Become more realistic, not only on values but how you become a good seller,” he urged sellers. “Make sure your records and maintenance status are in order to make them more appealing in the marketplace.”

The big surprise about pre-owned aircraft trading last year was that there were no surprises, he said. “People entered 2023 with cautious optimism but expecting something to happen – and it really didn’t.” Business remained strong last year and started the same way this year. “The HNWI market remains robust. There’s a good influx of first-time buyers, who used Wheels Up and started moving into whole aircraft ownership.”

Many other speakers confirmed the shifting balance of power from sellers to buyers. Zipporah Marmor, vice president, Aircraft Transactions, ACASS noted: “We are now trending towards a buyers’ market again.”

But lower prices for pre-owned aircraft were proving popular with everyone. challenging for new buyers for new buyers looking to upgrade their aircraft, according to Action Aviation.

Dismissing concerns this year’s US election may deter buyers, Don Dwyer, managing partner, Guardian Jet reported no impact on pre-owned aircraft sales in 2016 and 2020. “I just don’t see anything to slow down the train,” he added. 

But rising prices for new aircraft and aircraft parts had started to tax buyers’ patience, according to some speakers. “Owners are getting a little fed up,” warned Darren Broderick, CEO, Asian Corporate Aviation Management (ACAM). “Before, during and after Covid, we’ve seen dramatic increases in pricing – particularly OEM pricing and supply,” he said. And everyone had seen the rise in fuel prices. Particularly annoying was the sale of windshields at five or six times the OEMs’ original price, he added.

‘Do not want to be fooled’

JSSI estimated prices rises of 3% to 5% before Covid but jumping by 9% to 16% after the pandemic. “Owners come with a budget and they want a forecast,” said Fabrice Roger, senior vice president, Business Development, EMEA and APAC at JSSI. “They are ready to pay the right price, but they do not want to be fooled.”

Sticking with fuel, intensifying production of sustainable aviation fuel (SAF) while diversifying feedstocks would help to boost its available and lower its costs, said João Martin, from Jet Aviation. Part of the problem was lack of capital, according to Nancy Bsales, from 4AIR. “We need to infuse capital into the SAF industry so these facilities can be built,” she said. All agreed that SAF would help aviation achieve the key target of zero carbon emissions by 2050.

But not all SAF was created equal, claimed Matt Finch, UK policy manager at Transport & Environment. “Not all SAF is good is good – particularly if it’s made from US corn [maize],” he said. “In Europe, that type of SAF is banned.” Determining the difference between good SAF and bad SAF depended on answering the simple question: what is the underlying feedstock? he said. Good SAF could yield 100% carbon reductions while bad SAF could achieve only 10% reduction.

It was important business aviation authenticated its use of good SAF in order to forestall criticism of its environmental record. Finch warned the industry: “There is bad SAF out there and you will get investigated by journalists and called out for the bad stuff.” But his definition of bad SAF was disputed by Nancy Bsales, from 4AIR.

Despite rising prices, Don Spieth, president, VanGas Aviation Analytics highlighted the value that owners, particularly corporate owners of multiple aircraft, continue to find in business aviation. Corporate flight departments have done a great job, he said. “It’s clear to me that C level leadership looks to the director of Aviation to run their flight department with the same diligence as any other business leader that reports to them.”

Wire fraud

As if rising costs and lengthening backlogs were not enough to worry about, the risk of cyber-attack to both aircraft transactions and operations, was climbing warned the US Federal Bureau of Investigation (FBI). Global losses to wire fraud alone in 2022 totalled $10bn. Aviation remained vulnerable to wire fraud on aircraft sales and ransomware attacks on essentials such as aircraft log books. But early declaration of the offence to authorities offered some possibility of recouping losses. “I think about cybersecurity every minute of every day. It crosses borders instantaneously and we can’t fight it without partnerships around the world,” said Kathryn Sherman, cyber-criminal assistant legal attaché, FBI. “.

While charter activity declined last year, more stability was predicted by ARGUS International. “The industry has found itself a new baseline and we don’t think it will reduce further,” said Mike McCready, its president.

Clients recently lost to business jet charter may yet return, said Julie Black, manager, Executive Aviation, Hunt & Palmer. “Since Covid, there has been a huge opportunity for the industry to show what it can do,” she said. “Customers who were lost for financial reasons have now had a taste [of business aviation] and may not be lost forever.”

‘Don’t hide your business’

Making his first appearance at a CJI conference, Holger Krahmer, new secretary general, European Business Aircraft Association urged business aviation to deliver an upbeat message to governments and policy makers about its contribution to the economic growth and to society. “Be optimistic, be practical and don’t be silent about your aviation business. Don’t hide your business,” he advised delegates.

Krahmer wants EBAA to focus on lobbying and advocacy to help people understand the key contributions of business aviation. “I’m not saying saying membership has been neglected, but there is a direct association between EBAA members and the EBACE event [in Geneva],” he said. “We need to strengthen our lobby-based activities.”

Business aviation firms could also play key a role in delivering marketing messages that ditch cliches about the sector in favour of content that truly reflects the nature and many contribution of the industry, he added.

A powerful way of spreading those messages – and winning new business – is the use of social media platforms such as TikTok, LinkedIn, Instagram and YouTube, according to speakers in our last conference session.

Steve Varsano, founder, The Jet Business devotes three hours every week to social media posts, often on TikTok or YouTube. (One video post attracted 37m views). Overall, he attributes “a few deals” to leads originating from social media.

George Galanopoulos, MD, Luxaviation posts on Instagram several times a week and believes it offers a key to unlocking new and younger audiences. “Drawing new people to our industry is so important and social media really does that,” he said.

Liz Moscrop, Gear Up Media, founder and CEO said: “Social media is not a flash in the pan. It’s got to be part of your business strategy.”

CJI London 2024 took place between February 5th-7th at the London Hilton on Park Lane.  Read our report from the first day of the conference here.