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Uber above the clouds, Wi-Fi onboard and other bizav trends

Anastasia Dagaeva
November 21, 2017
Executive aviation is the most conservative stream in air travel. It seems nothing has changed since the first private jet introduction — a Lockheed Jetstar (first flown in 1957) — privacy, luxury, very important persons. Nevertheless, under a thick layer of gold, some life exists too. BEAM explored how bizjet clients, technologies and business models developed.

Less attitude — more efficiency    

Not unlike a half-century ago, business aviation is still a choice predominantly for the wealthy. According to Forbes, in 2017 the number of billionaires has risen by 13% — hitting the 2043 mark. The rise in high net-worth individuals has also increased demand for the use of private jets. Whilst some chose to buy a personal aircraft, others chose to charter. 

Anyway, this story is about special requests. Still, every request has a different price. “A business jet owner can afford many things. Smoking cigars on board? Sure! The man just paid $50 million”, says Gilles Gotier, the vice-president of Dassault Aviation, “but he would hardly sell the smoke-smelling jet after. And this is quite serious.”

Rationality is a must for a new generation of bizjet users. “These days clients are more concerned about the operating cost. They will never invest in the jet, feeling the money wouldn’t return. They always say how can I resell the aircraft, should I invest more in the maintenance?”, explains Dassault’s manager.

The airplane has to be a liquid asset. Hence, we see less exotic requirements for the cabin design. Even the most ‘kitsch’ clients — Chinese, Russians and Middle Eastern businessmen, now choose traditional, modest interiors. Dassault offers several types of combinations of leather, fabrics, and wood.    

"We have already chosen the best ones and certified them, saving our client’s time and money,” says Dassault’s representative, “A client can always create his own cabin. The problem is, not every material meets airplane design requirements - flammable pieces, heavy ones (marble). Even if they fit, to certify them takes way to long.  

Making the cabin design 'easier' doesn’t make its passengers less picky when it comes to food served onboard. ”We see a lot of unusual requests,“ says Executive Jet Management Europe’s (EJM) top-manager. EJM is a subsidiary of NetJets, the world’s largest bizav operator. The manager adds, “When a client orders sushi from a specific restaurant, our part is to bring these sushi on board, fresh.” 

A private jet is also a flying office, equipped with all sorts of telecom equipment. “Before we used to set a satellite phone, now it goes with internet only”, adds Dassault’s manager, “Today you can hardly sell a charter flight without a Wi-Fi connection.” There’s a new type of client — young, luxury-indifferent, IT-orientated. They use a jet as a fast and convenient transport, that’s it. Elon Musk, for example, would use his Falcon 900 to transport a rocket part.  “Sometimes, bizjet usage goes exotic: from oversize sports equipment to several boxes of oranges from the owner’s garden is Spain”, explains the EJM manager.

A flying office is also what heads of various governments need, so a 10% share of Dassault’s global fleet are the government-use Falcons. As for geography, Asia attracts the attention of all aerospace manufacturers. It’s share just 6% now, while North America and Europe, bizav major markets are 65% and 14% respectively. But Asia is growing fast — the amount of jets doubled during the last five years, according to a Honeywell report

“We will be focusing our marketing efforts on Asia, especially on the mainland, Hong Kong, Malaysia, Japan and Indonesia,” Eric Trappier, Dassault’s president says. “We particularly want Chinese businessmen to understand the effectiveness of the Falcon 8X in linking Chinese cities with the rest of the world. We have worked out every detail to ensure that clients reach their business destinations fresh and prepared to work as soon as they land.” The Falcon 8X range is almost 13,000km and even its name hints a passion the Chinese feel for ‘8’ being a lucky number.  

Not yet supersonic, but comfortable  

So, once the business jet is all about speed, why wouldn’t we have a supersonic one? At least three start-up owners have already questioned themselves. Aerion Corporation, Boom and Spike Aerospace — eagerly trying to find a ‘yes’ answer. None of them own even a full-scale model. Aerion and Boom are talking about a hybrid scheme: subsonic over the ground and supersonic over the water. Spike represents itself as a ‘quiet supersonic’ start-up, reports Aviation Week. 

Another project — Quiet Spike — established by US-based Gulfstream Aerospace, has a big chance to win the supersonic race. Last year, the manufacturer reserved two patent rights for supersonic’s noise reduction which would open doors to fly not only over the water but everywhere else. The Gulfstream current flagship G650 flies as fast as 980 km/h, it’s close competitors are Bombardier Global 7000 and Dassault Falcon 8X are catching up with 955 km/h and 900 km/h respectively. 

Dassault Aviation is the only company that produces not only executive aircrafts but also military fighters is not optimistic on going supersonic. “Engines are the major problem. There’re some on the market, but those are not sufficient to transport passengers. The jet fighter engine is not compatible too. It’s not designed to maintain supersonic cruise speed and run for hours, in other words —  it’s range is limited.”, Dassault’s top manager explains. 

The French company never stopped scientific research and had been running a joint venture with Russian’s “Sukhoi” company for 5 years (Sukhoi Supersonic Business Jet project). The verdict: the SST moment is not yet to come. “It’s more important to save time on the ground than in the air. To avoid traffic jams, all sorts of airport queues and formalities. The bizjet passenger can be fast and stress-free because of the infrastructure: a helicopter transfer to the executive terminal, speeded-up customs clearance etc.”, admits Dassault’s manager.

It’s too early to introduce unmanned business jets too, says Dassault. The company explains, that developing such aircraft is not a big tech problem, they already built nEUROn unmanned drone for the military. “It’s more about psychology than technology. Would you seat on a plane without a pilot present?”, smiles Dassault’s top-manager, “What our engineers are focused on is a one-pilot cabin. That’s where the industry comes to.” 

The same applies to alternative power sources — solar or electric. Those are yet too weak to provide enough energy. The ultimate bizjet feature is a powerful take-off scheme to allow quickly maintain the cruise altitude over commercial traffic. Only traditional petroleum-powered engines do it. Another problem is the price. The biofuel is so expensive even executive aviation avoids it. 

What about the Uber of the skies? 

New business models arrive as more IT-technologies develop. Until recently there were only three ways to fly the bizjet — charter, sharing or full ownership. The first one is occasional. The second means, a passenger would fly no less than 400 hours during a year, so he needs a “part” of the airplane. Full ownership is for those, spending a lot of time flying around.  

A new scheme appeared not long ago, a so-called “seat sharing”. The idea is to sell seats on “empty legs” — ferry flights, when a private jet returns to the base without it’s main customer, for example. One of the first start-ups to make money on this principle was JetSmarter. 

“The private aviation market is so ineffective. Almost a third of the flights are empty, from one port to another catching up passengers. We wanted to warm-up the demand, bringing passengers to dedicated flights and destinations, forcing jets to transport these new customers, and finally make the service affordable for more people”, said JetSmarter’s Sergey Petrossov. 

He even compared his service to Uber. “The seat-sharing niche is just taking shape, more players are yet to come, there are more ways to share, so it’s a bit early to make the final opinion.” The Dassault’s manager carefully welcomes a new business model, specifying that it may only be profitable with small “budget” jet aircrafts. “I’m really not sure if the owner of a big expensive airplane would welcome the people he never knew, even if they paid and he himself wasn't onboard.” 

Bizav forecast 

Almost a half of the executive jets market has a good chance to return to its pre-crisis year 2008 by 2021. The small-cabin jets will have to wait even 5 years more to reach the pre-2008 level, as stated by Teal Group in its 10-year forecast.  

 Teal expects deliveries of 11,434 bizjets with a value of $272 billion between 2017 and 2016, which is 1.7% higher compared to the last decade. “It has been nearly 10 years since the Great Recession triggered a serious business jet downturn. Since then, the market has seen a strange and unpleasant mix of false recovery starts, modest gains, and serious anomalies”, said Teal’s analysts Richard Aboulafia, the report’s author. He pointed to a number of positive signs in 2017 — a shrinking pre-owned airplanes inventory and increased utilization of jets.  

“Right now, given the macroeconomic and geopolitical uncertainty, we think it’s best to maintain a very conservative outlook”, admits Aboulafia. The forecast shows a 2.3% fall in bizjets shipments this year and “modest” single-digit growth up to the end of 2019. This is expected to “modestly” rise in the next decade.

While return to the pre-crisis level at the top-end of the bizjet market is expected by 2021 (according to Teal for aircrafts over $26 million), the lower part of the executive jets market — with price tags from $4 million to $26 million — will take longer to recover and reach pre-recession level, the report says.  
Photos: Dassault Aviation