EBACE 2017

AMT was at EBACE 2017 in Geneva trying to find the direction the business aviation market -not only in Europe - is heading to. The voices collected on-site were dominated by a hope in a better tomorrow. Hope is difficult to quantify and hope is definitively not a valid system so the outlook is a kind of sluggish but despite everything, many market subjects see the light at the end of a tunnel. The show clearly benefited from spring alike weather, but also from first encouraging signs that European business aviation is returning to growth.

Just after the end of the 2017 European Business Aviation Convention & Exhibition (EBACE2017), organizers declared that the show was one of the most successful in recent memory, with more than 400 exhibitors from 40 different countries and over 10,000 attendees.  Some 450 journalists covered the event being able to see 56 aircraft on static display on Geneva International airport and three more located inside the Palexpo exhibit hall. According to Brandon Mitchener, the new CEO of EBAA, many more aircraft would have come to Geneva but the space this year was on apron limited because of the construction work at the airport.  This year attendees could not just walk out to the static display, as in previous years, what was not a real problem as the organization of the short and frequent bus commuter link was perfect. By the way all attendees in Geneva received a free  "Geneva transport card" valid for all public transportation services.

EBACE is jointly hosted by the National Business Aviation Association (NBAA) and the European Business Aviation Association (EBAA). This year’s show took place from May 22 to 24 at Geneva’s Palexpo conference center and Geneva International Airport. Well, some journalist remember the times when the EBACE was bigger and more crowded, but frankly said, EBACE2017 was big enough to be the most important event in Europe of this kind, but small enough so one can attend most of conferences and workshops not having to neglect the personal contacts in the exhibition halls.

As usual on this kind of events, one day prior the opening of the show, in this year on Sunday,  many press conferences took place in a well organized manner and conveniently located in a single hall.

The EBACE2017 week kicked off with the full up Opening General Session led by the solar aviation pioneer, Dr. Bertrand Piccard, Solar Impulse chairman and pilot, the first pilot to fly around the world entirely on solar power aboard the Solar Impulse aircraft.  He described in his inspiring and motivating speech his challenging experience, predicting that only innovation can and would lead aviation toward a more sustainable future. Bertrand encouraged the audience to start thinking in a non-conventional way, because only so we could find solutions for a better future.

Panels and education sessions held throughout the show covered timely and important issues, such as the possible disturbances created by the Brexit, growing opportunities for young professionals,  security and top advocacy priorities across Europe. EBACE2017 also included two, really well-attended, day-long seminars where experts analyzed and advised aircraft transactions and business aviation safety. The first edition of Careers in Business Aviation introduced more than 250 students, from about 120 schools across Europe, to the broad range of opportunities in the industry.

An important number of OEMs held maintenance and operations sessions, and EBACE showcased business aviation’s sustainability.  Bombardier brought the entire fleet flying to Geneva using biofuel. We could see several new aircraft models, such as the Airbus ACJ330neo, and new partnerships, including a teaming between Bombardier, Nextant and Rockwell Collins on the Challenger 604. Similar news come from joint actions between Aerion and GE Aviation.

Brexit Debate

This was one of extremely well attended debates at EBACE2017. The situation is still not clear as the British government has not yet started the Brexit negotiations. In any way most panelist and insiders were worried that this process will take very long, possibly too long for some active subjects in the field, and possibly some damage to the industry may occur. The common wish and hope -specially on the British side-  was that, somehow, the status quo may be preserved. This was marked by a big question mark by other EU -non British- panel members.

  By Giulia Mauri -law partner at Pierstone-  calculation, it will take about six to eight years to negotiate a trade deal. For British negotiators looking to preserve access to the European market after Brexit, “there’s about 18 months,”. The situation could become even worse if there will be a need to negotiate 27 trade deals in 18 months (27 is the number of remaining countries in the EU). Mauri added: “Imagine a Europe where we go back to country-by-country, bilateral trade negotiations,...., That’s the worst-case scenario.”  

Analysts See Future Growth in Europe

After a decade of stalled recoveries, business aviation has posted in this year a steady growth across Europe for the six months prior to April 2017. But does that portend a full recovery, or just another blip? “If you look at the trend lines for the business aircraft fleet and GDP, we probably had overbuilding from about 2005 to 2008, but after 2008, we probably under-built aircraft,” said Richard Aboulafia, vice president of analysis at Teal Group. “We will return to growth, but we might not return to the 2007 market peak until 2021.”

Marc Bailey, the CEO of the British Business and General Aviation Association (BBGA) assured EBACE2017 attendees that the industry was united, and committed to advocating for preserving as much of the status quo – and the single market in aviation – as possible.

Too Many Platforms?

Analysts at the panel admitted forecasting was as difficult as ever. The stock market is often a leading indicator for aircraft deliveries, and global markets are up in the last six months. However, investors have shown signs of skittishness. The oversupply of pre-owned aircraft is exacerbated, the panelists agreed, by OEMs rolling out new platforms and cutting prices to keep factories open.

“OEMs are spending heavily on new models. That’s a reason to be concerned,” said Aboulafia. “We’re seeing some aircraft platforms end. We better have the growth we’re forecasting, otherwise we’re going to see some pain.”

Digitization. Commodification?

Against those concerns, based on fleet and delivery data, Richard Koe, managing director of WINGX Advance, pointed to aircraft utilization data for signs of optimism specially considering the growth for on-demand charter of 10 percent. Richard added that the aircraft inventory is being digitized and charter is being digitized - those effects should not be underestimated. 

According to Oliver King, acting CEO of Avinode Group “charter is definitely on its way to becoming a digital product. ‘Do people want to book aircraft online?’ According to Oliver that discussion is over and the clear answer is" yes". The question is now if an operator can make money that way. At the lower end of the market, with turboprops and light jets, the panelists agreed operators could grow a successful business model based on digital booking.

SET - The rise of the singles

The market is commodifying and expanding, and there is now a realistic hope that the demand for simpler products will rise. The approval by the EASA and the European Union in March for commercial Single Engine Turboprop (SET) operations in instrument meteorological (IMC) conditions and at night, seemingly came in the right moment. This change of long-standing rules in Europe seemingly is going to provide a breakthrough for single engine turboprops and -some strongly hope- those aircraft might compete with small jets. There are several appealing choices in this field like the freshly announced Cessna Denali or a brand new Piper M600 (was on static display) but in this field even Europeans manufacturers are well placed. Here we have to mention the proven workhorse from Switzerland, Pilatus PC-12NG and the French Daher TBM  910/930.  Nicolas Chabbert, senior vp of Daher, said at EBACE: “This is a major milestone,” laying out a case for Daher’s TBM 910 and TMB 930 as the platforms best suited to serve this new European market. According to Nicolas TBM aircraft can access way more than 1,300 airports in Europe, 44 percent more than light jets, opening new destinations to commercial operations. This was already proven by the French charter operator Voldirect which has been providing charter service since 2013 with a TBM, under an exemption granted by the French government, and has logged more than 1,200 charter flights without any safety issues. Simon Caldecott, Piper CEO, who was present at EBACE, was more than pleased with the development in Europe.

Even the GE new Advanced Turboprop (ATP) fits almost perfect in this positive SET - operations frame. GE has selected Europe as hub for its ATP - this powerplant will be manufactured in Czech Republic and is being prepared for its first run. Stay tuned - AMT will report from the factory. 

Brandon Mitchener, who attended his first EBACE as the new CEO of EBAA, was pleased by his debut saying  “We could easily sell more static display if we had more space, but we don’t,” Mitchener, who is used to conventions and exhibitions in other industries, said  “the cool factor of business jets and business helicopters .... is just how small and close-knit the community is." Adding: "Everyone knows everyone. There is a sense of family.” I can subscribe this statement - it is probably the best definition of EBACE you can get.

Next year’s EBACE will return to Palexpo and Geneva International Airport on May 29-31, 2018.