simandflight

Three things that almost certainly will not happen.

Shell is widely credited with being the first organization to realize the value of scenario planning. The oil company has used the technique since the 1970s and says that the it helped them anticipate and adapt to sudden rises in oil prices, the collapse of communism and the threat of climate change.

Scenario planning is not designed to predict the future. Instead it is meant to help you explore what could happen. The theory goes that if you can work out what could happen, you will be ready to deal with what does happen.

With this caveat in mind, here are a few business jet market scenarios for you to consider.

OEMs stop selling

It took some time, but in retrospect it never made sense for aircraft manufacturers to sell aircraft. The salespeople at manufacturers were the last to agree to this but when they realized that customers wanted simple ownership – and that was where the biggest commissions were – they quickly changed.

In the 1990s and 2000s there was a real cachet in owning your own aircraft but the Global Financial Crisis in 2007 changed that. Consultants called it moving from the “owning economy” to the “sharing economy.”

The first OEM “shared ownership club” was a simple one. Buyers selected an aircraft, chose the interior and then agreed the term of the contract. They then chose an operator from a list of approved ones. Provided they flew between the minimum and maximum hours they did not need to worry about anything else. If the aircraft suffered from unforeseen maintenance (which was becoming increasingly rare) the manufacturer lent them another aircraft. At the end of the lease you either returned, renewed or choose another model.

Club members valued the flexibility (although getting out of the club before terms ended was not that easy) but most of all loved the simplicity. Technically they did not own the aircraft but it felt like they did and no corrected them when they called it “their jet.”

Within five years it was responsible for 90% of all sales. Not everyone signed up. Some very rich individuals and a few multinationals still choose to buy aircraft and use their own flight department or a bespoke aircraft manager. Many owner pilots of smaller aircraft also chose to keep running their own aircraft.

Because manufacturers guaranteed availability rather than values, it also changed perceptions about older aircraft. Users of programmes rarely realized how old their aircraft was. Suppliers developed plug-in upgrades and it was common to see 20-year-old aircraft being used by top corporations.

It took time but the change in ownership was the biggest shift in aviation since the jet engine. Whilst some OEMs tried to control the whole experience – including finance, maintenance, crewing, flight planning and training – others quickly formed what they called “risk sharing partnerships.” Owners did not realize but in some cases they were being supported by dozens of different companies. Staff working at risk sharing partners became adept at switching branded polo shirts.

Megacities kills long range business jets

The rise of the megacity was widely forecasted. But no one guessed how badly it would hit long-range business jet sales.

In 1950, 67% of people lived in the country. By 2008 it was split 50:50 but things changed fast. In almost exactly 100 years – 2046, 67% of people were living in cities. In 2030 there were already more than 30 megacities – cities with more than 10 million inhabitants.

This urbanization led to profound changes. Cities became more important than many countries forcing the United Nations to reform.

Children born in megacities often had a very limited understanding of nature or agriculture. Farming became an old person’s career as more and more people left for jobs in urban areas.

The problem for business aviation is that – as always – airports did not keep up with the growth.

Inhabitants of megacities wanted to be able to fly to other cities and business aviation kept being pushed out further and further out of cities. Soon many traditional business aviation prospects were happy to fly long-haul on airlines rather than using business jets (as most of the new cities were in Asia their first-class products were very strong). New developments in security screening also made flying on a commercial aircraft more pleasant.

It was not all bad news for business aviation. Smaller towns and cities became less connected, so smaller businesses jets became essential business tools. Towns realized the important of business aviation and learnt to value having a general aviation airport.

Helicopter and flying car manufacturers were the biggest winners. Although everyone new that urbanization was coming, few cities invested enough in transport infrastructure. As megacites became more gridlocked helicopters and flying cars became the only way to get around.

Pilots still in charge

Everyone knows it will happen eventually, but in 2050 observers are predicting that it will be 2075 until unmanned business jets and commercial jets become normal.

Apart from a few enthusiasts no one drives anymore. Many countries no longer offer driving tests. But aviation is behind the curve. Everyone is used to seeing solar-powered UCAVs (unmanned cargo aerial vehicles) and UFAVs (unmanned fighter aerial vehicles) zipping about the skies. But aircraft passengers still want at least one pilot sitting in the cockpit.

Anyone surprised by this should have looked back at history. Aviation has always been different to other forms of transport.

The first fatal aviation crash came in 1908 when the propeller flew off a Wright Flyer that Orville Wright was flying. Wright was badly injured but his passenger lieutenant Thomas Selfridge died. Just seven years later – in 1915 – the UK launched the Air Accident Investigations Branch.

Compare this with rail. The first rail death was in 1830 when William Huskisson was runover during the opening ceremony of the Liverpool and Manchester Railway. In 2005, 175 years later, the UK Rail Accident Investigation Branch was created.

There is something about aircraft that makes passengers still want pilots. UCAV controllers joke that the key skill of a commercial aircraft pilot is “the ability to wake up when the aircraft lands”. But it does not matter what they think. The public disagree.

Source : CorporateJetInvestor

Reinhard Finke