From 2019 to 2022 the business aviation sector has had a historic few years. Private aviation has attracted a new clientele during Covid. The figures for the business aviation sector in 2023 announce unprecedented levels. After a period of turbulence and a slowdown in activity at the end of 2022, all players in the business aviation market are looking ahead to 2023. Will 2023 be the year of the take-off for business aviation or the continuation of its growth? How does 2022 look for this niche market? What are the challenges of tomorrow for aircraft manufacturers, airlines and brokers? AEROAFFAIRES takes stock of the year 2022 and shares the trends that are emerging in 2023 for business aviation.
Une demande de vols privés historique en 2022 .
WingX, the aviation data specialist, has just revealed the global business aviation figures. The global business aviation market is set to grow by 10% by the end of 2022. In Europe, the business aviation market has done very well. The European Business Aviation Association (EBAA) has announced an increase of 11.8% compared to 2021. A total of 793,152 flights were recorded in Europe this year. Despite this good performance, the players in the sector (air brokers and airlines) note a slowdown. It is estimated at 13.6% since October 2022. This slowdown should not be a cause for concern. It is a phenomenon common to the previous 3 years. No, the private jet is not dead.
Paris Le Bourget airport is at the top of the list of the most dynamic airports in Europe. It recorded a 24.1% increase in traffic, according to EBAA. London (Farnborough and Luton) and Switzerland (Geneva Cointrin and Zurich) are also among the most dynamic airports in 2022. Finally, Istanbul-Ataturk airport is in 10th place with a 17.6% increase in traffic in 2022.
The business aviation market shaken by the phenomenon of “jet bashing” :
As the summer season gets into full swing in Europe, jet bashing has invited itself to the party in the summer of 2022. The controversy surrounding the use of private jets has flared up without warning. Some politicians have set the world on fire by proposing to regulate, tax or even ban private jets. Actors from the business aviation sector have spoken out in defence of this production tool. It was a good opportunity to explain the interest of this type of aviation and to say no to the “Flygskam”, the shame of flying. This was the case with Isabelle Clerc, CEO of AEROAFFAIRES, who was invited by the major media. M6, TF1 and BFM gave her the floor. She was able to explain the need to perpetuate business aviation as a source of productivity for those who use it.
Jet bashing is the criticism of the use of private aircraft, usually on environmental grounds. Critics argue that excessive use of private aircraft contributes to greenhouse gas emissions and air pollution, and that this is particularly irresponsible at a time when environmental concerns are becoming increasingly important.
A tense economic and political context, a source of turbulence at the end of 2022 :
- A conflict in Ukraine with negative repercussions for the aviation sector :
The destruction of the Antonov-225, a mythical and strategic Ukrainian cargo plane, has led to a series of sanctions against Russia.
Since February 2022, overflight bans have multiplied. Initiated by the British, followed by the USA, Europe and Canada, the airspace has gradually been closed to all Russian aircraft. The United States, Europe, and Canada followed suit and gradually closed the airspace to all Russian aircraft, preventing them from flying over these countries and continents, in return for sanctions. Russia was quick to retaliate by banning flights over its territory.
This open warfare in the airspace is becoming a real headache for business aviation companies. They have to constantly rework their flight routes. Some routes are being lengthened, leading to higher prices for private jet travel.
- A fluctuating exchange rate that serves business aviation.
Airlines are highly exposed to exchange rate fluctuations. This is because they have costs in foreign currencies and revenues in local currencies. Examples are fuel costs, aircraft purchase costs and maintenance costs. Exchange rate fluctuations have a significant impact on airline costs and margins.
This year 2022, the exchange rate has been unfavourable for airlines. As a result, they have seen their operating costs increase, reducing their profit margins.
- An exceptional fuel price increase in 2022.
Fuel accounts for about 30% of airline operating costs. In 2022, the business aviation sector has seen the price of jet fuel skyrocket. As with commercial aviation, it is impossible for this sector to escape the impact of this increase on the price of private jet flights.
It is estimated that the price of oil will rise by 80% by 2022. The price of a barrel of oil has risen from $75 to $135 at its highest level. In addition, the European embargo on Russian barrels is adding to the rise in fuel prices. And this trend could continue into 2023.
In 2023, business aviation faces many challenges :
Win back the hearts of the general public by focusing on innovative projects :
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Jet bashing and the shame of flying have hit the aviation market and more particularly private aviation. From then on, it is an entire sector that must justify its place and win back a public that is not its clientele. This is a perilous exercise in style, which only communication and example can succeed.
The general public is not the clientele of business aviation. However, it has the power to influence the behaviour of business and private customers through pressure. Airline brokers, such as AEROAFFAIRES or airlines, see this clearly. Isabelle Clerc, CEO of AEROAFFAIRES, tells us that “owning a private jet is no longer in the air. There is a new trend. Some owners are abandoning their aircraft in favour of renting them for greater confidentiality.
To win back the general public, the players in the aviation industry are not skimping on their communication. This is how the initiatives and commitments of aircraft manufacturers to reduce their carbon footprint are brought to light. The entire aeronautical industry is improving its image by investing in reforestation and carbon buyback programmes. AEROAFFAIRES has been a forerunner in this field by forming a strong partnership with EcoTree.
One beneficial aspect of jet bashing is the acceleration of innovation. The aircraft of the future are appearing. Thus, the numerous “green aircraft” projects such as the eVtol project are very popular, as are 10 other innovative projects. Green and reduced CO2 emissions are the major challenges facing aircraft manufacturers in 2023 and the years to come.
The importance of accelerating the use of SAF for aviation in 2023.
SAF (Synthetic Aviation Fuel) is an alternative fuel. It is made from renewable resources such as plants, algae and organic waste. It is produced by a process of converting biomass into fuel. This can include steps such as fermentation, distillation and catalysis. One of the most important advantages of FAS is that it significantly reduces greenhouse gas emissions compared to traditional aviation fuels.
There are several reasons why the use of FAS is in the spotlight. It is seen as an ideal solution for reducing the environmental impact of aviation. The entire industry is pinning its hopes on this new energy. First of all, FAS can be produced from renewable resources. This means that it does not contribute to the CO2 emissions associated with the extraction and refining of traditional fuels. In addition, FAS is considered an alternative fuel compatible with existing engines. So there is no need to invest in expensive technology to use it. Aircraft manufacturers like it.
It is estimated that by 2050, 63% of fuel will be SAF-based. This growth is due to the obligations imposed by the European Commission on the aviation sector.
However, it should be noted that FAS production is not yet developed enough to completely replace traditional fuels. Production costs are still higher than for traditional fuels. It is therefore important to continue investing in research and development. This is to increase the production of FAS and make this alternative more accessible and competitive.
The need to turn to green aviation: ensuring the sustainability of business aviation.
The use of private aircraft for business travel contributes to greenhouse gas emissions and air pollution. Companies and individuals who use private aircraft are increasingly aware of this impact. They are looking to reduce their carbon footprint by using more environmentally friendly aircraft and limiting the number of unnecessary flights. For this reason, the aviation industry needs to adapt to this issue, by offering ‘green’ aviation. Green private aviation refers to the use of private aircraft that have a lower environmental impact than traditional aircraft. There are several ways to achieve this goal :
- The use of alternative fuels : The use of alternative fuels such as FAS or electricity can significantly reduce greenhouse gas emissions.
- Improving energy efficiency : Green aircraft can use technologies that improve fuel efficiency. The use of more efficient engines, lightweight materials for aircraft construction, and advanced energy management systems are all on the agenda.
- Route optimization : Green aircraft can use technology to optimise flight routes. This allows them to reduce flight times and distances.
- Airport optimisation : Major names in the airport industry, such as EDEIS AEROPORTS or Vinci AEROPORT are committed to enhancing environmental friendliness in airports. Infrastructures are redesigned to meet environmental challenges in their entirety. Edeis has set up a GREEN BUILD’ing service to develop green airports.
By 2023, disparate business aviation trends for the EU and the US.
A business clientele that should continue to use business aviation.
It is difficult to predict with any certainty who the business aviation customer base will be in 2023. This will depend on many factors such as the changing global economic situation and travel restrictions related to the COVID-19 pandemic. However, it can be expected that the business aviation customer base will continue to diversify. How will this happen? As companies in different sectors and sizes discover the benefits of using private aircraft for business travel.
It is likely that large companies will continue to use private aircraft for business travel. This is because it saves time and increases productivity. Smaller companies may also be more inclined to use private aircraft. Indeed, the development of frequent flyer programmes is accelerating, such as AEROAFFAIRES’ Flying Jet Card. Other practices, such as fractional private jets and private jet sharing are becoming increasingly popular and accessible. In 2023, one of the trends for the business aviation sector is the continued demand from business customers who are convinced of the benefits of this means of mobility.
The great return of foreign customers to Europe.
Many sectors such as tourism, hotels and business aviation are hoping for the return of Asian and American customers to Europe in 2023.
After 3 years of a strict covid policy, prohibiting any exit from the territory, the reopening of the Chinese borders is excellent news for business aviation. As a result, this market should see an increase in demand from or to these areas. This should be taken with caution, given the current situation in China with regard to Covid. The Chinese are the biggest spenders on tourism ($255 billion in 2019 alone), compared to $127 billion for the Americans.
Business aviation players have their eyes on these two continents, which could come to drive the private jet market upwards. The next few months will be decisive in confirming these 2023 trends in the business aviation sector.
A concentration and restructuring of players in the business aviation market.
With more than 2,000 players serving the airline industry and 449,000 jobs (in 2021) and given the uncertain global environment, the currently fragmented private aviation market is expected to continue to change in 2023. Like VistaJet’s takeover of Air Hamburg in 2022, takeovers and groupings should multiply in 2023. This concentration of players will ensure the profitability of certain airlines. Thus, the increase in costs and the optimisation of aircraft operating and maintenance costs would be better absorbed.
Aircrafts manufacturers who work hard to offer ever more innovative, ever more efficient aircraft.
Whether it is Boeing, Dassault or Gulfstream, these three behemoths of the aeronautics industry are redoubling their imagination to differentiate themselves. This will enable them to remain in the race for the private jet market in 2023. They are adapting to the challenges of tomorrow, unveiling aircraft that are :
- more innovative
- more efficient
- going further and further
- while at the same time being more fuel-efficient and reducing carbon emissions.
Thus, in 2021 the Falcon 10X made its appearance, closely followed by its competitor the Gulfstream G800. In 2022, it was Bombardier that made its mark with the announcement of the Global 8000. The production and delivery of private jets are therefore trends in 2023 that should be confirmed in the business aviation market. Thus, more and more technological gems are expected to join the fleet of aircraft available to private aviation.
An upward forecast for the US business aviation market.
According to Meeting Spotlight, ACJ (Airbus Coporate Jet) surveyed 100 senior US executives on business aviation trends for 2023. These companies have revenues in excess of $500 million. CEOs, CFOs, board directors and senior executives responded to the survey. The survey reveals that the business aviation market is expected to continue to do well in 2023. Indeed, 89% of respondents believe they will use business aviation services again in 2023. They acknowledge that they have become “dependent” on this means of mobility since the Covid 19 crisis, which allows them a real gain in productivity compared to traditional commercial aviation. In the US, the trend in demand for private flights will clearly be good for business aviation.
What conclusions can be drawn from the 2023 business aviation trends ?
As all these trends show, the year 2023 holds many surprises for the business aviation sector. With a tense geopolitical environment, a troubled global economy and rising commodity prices, Europe is hoping for a return of Asian and American customers to drive up demand for private jet flights in 2023. Business aviation has more than one trick up its sleeve to restore its image and continue to be part of the mobility landscape of tomorrow. For AEROAFFAIRES, 2023 will be the year of the acceleration of “green”. Indeed, the air brokerage company will redouble its efforts by systematically proposing a range of more environmentally-friendly aircraft (turboprops or aircraft using SAF). Finally, the company, a pioneer in the commitment to the environment, will continue to engage its customers through the EcoTree programme and the investment of its customers in French forests.
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