GVZH at the Corporate Jet Investor London 2022

Earlier this month, GVZH was amongst over 500 delegates attending the annual conference ‘Corporate Jet Investor London 2022’, organised by Corporate Jet Investor – a leading news and information outlet within the global business aviation industry. This conference regrouped industry stakeholders for sector-specific discussions and debates, with special focus being given to the latest developments and trends undergone by the business aviation industry.

Throughout the first day, geopolitical impacts of the war between Russia and Ukraine were a major theme dominating discussions. One key observation made in this respect was the importance of avoiding foreseeable roadblocks in the aviation supply chain as a result of this conflict before they occur by adopting risk mitigation strategies. This same theme took centre stage again throughout the second day, where Russian sanctions were discussed in detail. One key observation in this respect was the importance of KYC mechanisms in meeting obligations related to applicable sanctions.  The best route in this respect was deemed to be that of adopting the previously applicable KYC mechanisms appropriately and rigorously, both in terms of the customer one would have contact with and underlying ultimate customers. These considerations become even more important to the industry in view of the US, UK and EU monitoring the application of restrictions in relation to Russian sanctions.

Moving on to analyse the industry’s trends and statistics, Bart Demosky, on behalf of Bombardier, remarked that business aviation has expanded substantially and has even achieved a ‘record environment’ in terms of demand, global flight hours and a surge in a new high of ultra-high net worth individuals joining the business aviation market, in addition to returning corporate flyers. Similarly, growth was also observed within the civil aviation and the non-commercial aviation American markets. Whilst 2022’s business aviation activity was improved by 7% when compared to last year and 20% when compared to 2019, airline activity levels remain low. It has been told that oil prices and inflation are responsible for many difficulties within this industry.

Despite these setbacks and hurdles, the consensus amongst speakers was that business aviation is strongly advancing and establishing itself as a long-term leading industry. The improved statistics in relation to the specific markets, namely the optimistic indications in respect of new high net and ultra-high net individuals, may even indicate that we are living in a ‘golden age of business aviation’. Taking a deeper look into this market, several panel speakers pointed out that whilst many have the capital to buy an aircraft, the cost to operate, maintain and run that aircraft are generally underestimated, especially in view of the stretched supply chains and increase in costs challenging the charter market.

These considerations were revisited on the second day, wherein the true costs of private jet ownership were discussed considering the responsibility of the industry to ensure that the new entrants into the industry are aware of such costs. In doing so, the new high and ultra high net individuals market will be sustained by improving buyer experience and avoiding unknown financial liabilities and shortfalls. One suggestion was a cost forecast which takes into account preventative, scheduled and unscheduled maintenance costs. Awareness of these financial factors will also enable prospective buyers to decide on whether purchase or charter would be their ideal route.

Another major theme dominating the second day of the Corporate Jet Investor’s London 2022 conference was sustainability, which is also a motivating factor for new entrants and returning buyers. Environmental, Social and Governance (ESG) policies have proven to be a key consideration for such buyers in their selection of OEMs, especially in terms of manufacturing methods and the manufacturer’s power resources. This discussion was shaped through considerations of remedies required to substantiate the shift towards a net-zero carbon emission industry by 2050. Some mechanisms include the adoption of Sustainable Aviation Fuel through carbon offsetting schemes, which comes at higher power costs than the jet fuel generally used at present.