Welcome to CJI Americas 2020!

While we are unable to meet face to face in 2020, CJI Americas 2020 Virtual will bring the industry together online.

With a focus on the changing business aviation landscape in the US, it will look at the growth strategies of some of the biggest US operators and have an in-depth look at the Brazilian and Mexican markets as well. To know more about the sessions, find our agenda here.

Over 450 senior level operators, brokers, OEMs, financiers, flight support companies, charter arrangers, expert advisers, appraisers, and many others active in business jet transactions will speak about the latest developments and connect with others across the industry.

You can follow a minute-to-minute coverage of the sessions from 17th November here:

Sentient Jet – What a difference a year makes 

After the initial post-Covid boom new entrants are in decline according to Sentient Jet’s Andrew Collins, but he is witnessing another trend of more lower level executives now flying privately.

The President and CEO of Sentient Jet, said: “We are actually seeing it. Where you saw this first wave of new entrants, which has somewhat subsided, so in order for us to really breakout further in this addressable market space we are going to have to retain those clients. So a lot of folks talk about this big bang that happened [of new entrants]. You are starting to see the evolution [of new entrants] ebb over towards corporate America.”

Looking towards OneSky, the firm is working out a strategy on entering into the international market. It is going to be an exciting 2021 and 2022, where technology plays an increasing role, noted Collins.

-YM

Evolving business aviation trends – leading the way

A new breed of High Net Worth Individuals and Ultra High Net Worth Individuals is emerging to re-energise business jet sales, according to Michael Amalfitano. Embraer Jets, President and CEO. “This is leading to a much stronger than usual first-time buyer activity,” he told more than 500 delegates in his keynote address.

“Before first-time buyers used to represent 10% to 15% of business jet deliveries. Now it’s approaching 50% in some classes – especially entry level jet categories,” he said. “We have also seen the pre-owned customers active and this market is heating up. This is for smaller class aircraft – at least for now.”

-Mike Stones

Michael Amalfitano

What’s next for Latin America – Brazil

Brazil has the third largest Jet-A fixed wing business aircraft market in the world. The US has the largest market with over 11,000 aircraft, second is Mexico with about 850 whilst Brazil has around 750.

The Brazilian fleet is relatively old compared with the US, as Covid-19 has left many aircraft on the ground for significant periods. That could that mean the phasing out of a significant proportion of these older aircraft models.

Alexandre Marroquim, CEO, Good Winds Insurance Broker thinks the trend of flying older aircraft will continue to a point. “I think we will keep this fleet here for a while. But the problem is when you talk about the insurance side it’s tough and challenging to get full coverage for these aircraft, especially in Brazil.

“We are also at a tough moment because some insurers are no longer operating in Brazil or have moved out of the aviation segment. So, there is a lack of them. [Right now] It is challenging anyway, but when you talk aircraft 25 years of age and older it is very difficult to get insurance for these aircraft.”

-YM

North of the border – Canada

The differences between the Canadian and US business jet markets can be seen clearly in the light of Covid-19. Looking at the difference in flying patterns between the two nations Emlyn David, CEO, Skyservice said: “More so than the composition of jet ownership I think the flying patterns are the biggest difference between Canada and the US.

I think the number in the US is at 90% domestic for business jet travel whereas in Canada 70% originates going to or coming from across the border. That is very noticeable during Covid where you see FBO activities in the US coming back to near normal, whereas in Canada that’s not the case. So that’s the big difference.”

-YM

Aviation medicine in a time of Covid-19

The Covid-19 vaccine and herd immunity as ways to control the virus are a long way off, says Dr Simon May, MD, Flightcare Global. Mass distribution of the vaccine can be expected late in 2021.

The best ways for the industry to restart private and commercial aviation are if governments allow passengers to travel between regions more freely and increased passenger confidence.

The risk is even lower in a business aviation setting, where there is “natural social distancing” at FBOs and onboard aircraft. “Risk is pretty low for crew. They are probably more likely to catch the virus when they are going about their normal lives,” said May.

And now that there has been a breakthrough with the vaccine, there is reason to be more optimistic than before.

He believes that leisure and private aviation are likely to lead the recovery. A combination of testing, mask wearing, social distancing and advanced contact tracing will reduce the need for quarantine in the meantime.

–YK

The view from Wall Street

Investor sentiment for commercial aviation has been extremely bullish for the past seven to eight years, says Nick Fazioli, MD, Jefferies LLC, Aerospace & Defense Division.

Before the pandemic, the biggest issues affecting the growth of commercial aviation were the global pilot shortage and fuel, he said. Now, the lack of visibility due to Covid-19 has had a deep impact on airlines and the service supply chain.

“But no one saw a pandemic-driven recession coming, and it has really turned the tables on people’s view of commercial versus business aviation,” said Fazioli.

Despite a breakthrough with the vaccine, Fazioli says the demand for air travel in a post-Covid world is unpredictable. “If travel goes away because of Zoom, that is a massive impact on the business model for the airlines.

“On the other hand, this kind of disruption has investor more intrigued about the value proposition for private travel. The fact that you can move individuals and businesses in a more secure way is really resonating.”

It is more now more prudent than before to ask business travels to go private. “The sentiment is positive, but the supply of deal opportunities is still low,” he said.

–YK

Europe-US deals harder than ever

Aoife O’Sullivan, lawyer and partner, The Air Law Firm, told delegates: “You have to adapt. All of the tried and tested routes don’t necessarily work anymore. We had a transaction recently where the seller took the aircraft to Guernsey and they flew a PC-12 down to pick the pilots up to avoid them being quarantined for too long and the aircraft was basically left for the buyer to come and pick up.”

Last year, the whole team involved in the transaction would be there for closing – now that’s not possible. The time pressure has increased too, O’Sullivan said her record for a closing call now was four minutes.

Another challenge presented by Covid-19 is the difficulty in flying in designated airworthiness representatives (DAR) to aircraft locations. Oliver Stone, MD and founder, Colibri Aircraft, told delegates: “As a general rule of thumb a good DAR is as valuable to a deal as just about anybody else. A difficult DAR can upend everything at the closing.

“Good ones are in very high demand with a lot of aircraft to see. If you were to say come to my quarantined country to look at my one aircraft — they won’t. Why would they risk the rest of their business? So, it is a big issue right now especially towards year end.”

–YM