Podcast: EBACE Unpacked

With the 2022 edition of EBACE in full swing, the onsite ShowNews editorial team gather to share their key takeaways from this year's event.

Don't miss a single episode. Subscribe to Aviation Week's BCA Podcast in Apple Podcasts, Google Podcasts, Amazon, Audible and Spotify.

Rush transcript:

Thierry Dubois:

Welcome to this special edition of Aviation Week's BCA Podcast from Geneva. I'm your host, ShowNews editor-in-chief, Thierry Dubois. And today our team here will be sharing their key takeaways from EBACE so far. Joining me, our executive editor of MRO and business aviation, Lee Ann Shay; editor-in-chief of The Weekly of Business Aviation, Molly McMillin, senior editor, Bill Carey; and another of our business aviation experts, Angus Batey. We are recording at the end of day two. Molly, what do you think was the big news of the week?

Molly McMillin:

Well, I think clearly one of the biggest announcements was by Bombardier who announced that they're moving forward with the Global 8000. You might recall a few years ago when they announced the Global 7500, they also were going to do a Global 8000. And Éric Martel, the head of Bombardier, says since then he's been asked that question over and over. Well, we now know the answer in that they are moving forward with that, with an 8000 nautical mile range. What they say will be the fastest jet in that category, with Mach 0.94 and with a delivery date of 2025. So, that's been really well talked about here. They had a big presentation, lots of people attended.

Thierry Dubois:

And in Bombardier's product range is the Global 8000 coming in addition to the 7500?

Molly McMillin:

It will eventually replace the 7500. So they'll be talking to their 7500 customers saying that they'll be able to upgrade their 7500's with the extra range and the extra speed. But eventually this 7500 will be replaced by the 8000.

Thierry Dubois:

And quite special in terms of flight testing, about the high speed, I think.

Molly McMillin:

When they were doing flight testing out in California, they broke the sound barrier using sustainable aviation fuel. The first time I think that that was used in breaking the sound barrier. So they were very excited about being able to do that. They also stressed that the 7500 cabin has been so well received. So it's the same cabin, same fuselage, just better performance.

Thierry Dubois:

Thank you. And visitors also could see other new aircraft, new here at EBACE, such as the Gulfstream G700, which is the top of the range at Gulfstream, it's still in development. And another in development aircraft, which is the Falcon 6X by Dassault Aviation. Any other debutants?

Lee Ann Shay:

Unless you count Bombardier's Eco Jet, it looks kind of like a large drone. It has a blended wing body and they're using it to test various technologies. And we're seeing a lot of advanced air mobility vehicles here on the exhibition for the first time.

Thierry Dubois:

And does Bombardier believe that this layout, the blended wing body, is suitable to business aviation?

Lee Ann Shay:

That's a really good question. They are testing it, they did say that they're going to produce a larger scale mock up, but they didn't say exactly what would be on there or how big it would be. So stay tuned.

Thierry Dubois:

And they are flight testing it in a secret place in Quebec, right?

Lee Ann Shay:

Right.

Thierry Dubois:

The Eco Jet is part of a larger sustainability theme, which is dominant here at EBACE. We've been hearing about how the industry can become sustainable everywhere, especially with SAF, sustainable aviation fuels. What did we learn about SAF this week, Angus.

Angus Batey:

Well, I think we learned that some of the claims and hopes made for SAF in recent years are being extremely slow to come to fruition. There seem to be a number of reasons for that supply, nowhere near meeting demand. But even on the demand side, there are questions. Despite all of the great messaging that this sector has done, very effectively, we all thought over the last few years, there still seem to be people at the front-end of airplanes who are not yet ready to put SAF into their jets. As a result of that, the demand at FBOs is low. That causes suppliers to not wish to invest too much more in increasing supplies.

And so we end up in a situation where the people who want it can't get it because it's not available everywhere. Also, some of the big suppliers understandably are happier to do one single deal to sell all of their supply to a single customer than they would be to do small deals with lots of smaller FBOs, particularly when we find that some of those FBOs may have the SAF sat there for several months and not actually sell it. So some big players are coming in, it turns out. The airlines, the business aviation sector, never thought that the commercial sector would be first. Maybe they're not first, but they are taking an awful lot of this very constrained supply, leaving less and less for business aviation.

Lee Ann Shay:

One good piece about SAF that came out this week though, was that Geneva here where we are, does offer SAF at the FBO. So this is the first EBACE where companies will be able to fuel their aircraft with SAF.

Angus Batey:

However, that's only for three days.

Molly McMillin:

Correct. And they mentioned that they flew in here using SAF, but obviously there's just not enough supply to do around the year supplies and get everybody-

Angus Batey:

Supply is part of it, but another one of the issues is actually taxation. Switzerland being outside of the European union, the SAF has to come in across the border out of Europe into a different jurisdiction, different tax rates apply, a whole different set of rules start to govern it. Another area that the fuel industry had been looking at increasing SAF adoption via is using book and claim accounting procedures, where people are able to pay for SAF in one location where it may not be available and put it into the jet at a different location where the supply is available. That seems to be working well in the US, where you've got a consistent taxation system, but in Europe, every single European territory has a slightly different tax mechanism, which makes a book and claim system very difficult to implement. Just doesn't seem to work in this continent.

Molly McMillin:

If I can jump in here just a minute. I was in a panel discussion this morning, where they were talking about fuel efficiencies, saying that in the long term it's SAF and it's electrification and alternative fuels. But right now there are many things that can be done for fuel efficiency. Winglets, filing your flight plan to be as efficient for landing and routes as possible. And EUROCONTROL was saying that many will file a standard flight plan, but they won't file the most optimum flight plan for their route. And that if you file the flight plan, fly to that flight plan and just do the things that you have the technology onboard to do today, you'll be able to still reduce your CO2 emissions by doing what's available.

Thierry Dubois:

So let's use what we have first.

Molly McMillin:

Yes.

Thierry Dubois:

Could we jump to SATCOM, satellite communications? We have seen progress in that area as well. Bill?

Bill Carey:

Yes, there was a real cornucopia of developments in inflight entertainment and connectivity, and specifically satellite communications or SATCOM. And if you bear with me, I had to make a cheat sheet here because there were so many that it's hard to keep track of. The EBACE started with an announcement by Gogo and Hughes Network Systems of a partnership with OneWeb, which is in the process of launching a 648 satellite lower earth orbit constellation into space. Gogo is more thought of as an air-to-ground inflight connectivity provider. They're rolling out a 5G system in the United States. But they've paired with OneWeb, and Hughes is building their flat-panel, electronically steer array antenna system. So they'll be able to capture the OneWeb LEO satellites. And I found that a really remarkable development; OneWeb, as I said, is only in the process of constructing its satellite network.

And it has two thirds of those 648 satellites in space as we speak. But due to Russia's invasion of Ukraine, they were forced to stop using Russian Soyuz rockets as their launch platform, and had to hastily strike agreements with a competitor, SpaceX of Elon Musk fame, to help them continue launching the balance of those satellites, and as well as New Space India. Now not to be outdone, after that announcement, Satcom Direct and its partner, QEST of Germany, announced partnership with OneWeb. QEST is the actual antenna manufacturer for Satcom Direct's Plane Simple Antenna System. Now they're going to do a separate antenna, that again, electronically steered phased array antenna, that will connect to the OneWeb LEO constellation.

Just as we came here today Inmarsat announced that it was upgrading its Jet ConneX Ka-Band network for business aviation, to something they're now calling JX Evolution. Earlier, they announced an enhancement of their SwiftBroadband L-band system that they're calling SwiftJet. And then earlier in the week, I was really pleased to get a ride on a Gulfstream G550, that is Satcom Direct's company aircraft. And-

Thierry Dubois:

You tested it yourself?

Bill Carey:

What I did test was a whole separate system. They're paired with Intelsat to develop the Plane Simple Antenna System, that as I mentioned, is manufactured by QEST of Germany for Intelsat's Ku-band network. But they're also developing that same antenna system for Ka-band and also for L-band; the Iridium Certus L-band service, which is going to be introduced in the coming years as well. So there's a lot going on in inflight connectivity, as it applies to business aviation. There seems to have been a pent up demand. I think it's kind of following the pace of the commercial space industry, which is launching satellites into orbit every single day.

Thierry Dubois:

And from a passenger perspective, could you see greater speed?

Bill Carey:

I'm going to get the megabits per second mixed up in my mind, but that is a selling point, for instance, of Satcom Direct and Intelsat, that they're going to give you a top level capacity and a plan to subscribe to that service, and always get that level of capacity, which would probably drain anybody's smart phone and tablet batteries on the plane as you watch streaming video on the monitor and listen to Pandora music in the speakers. So there's enough... And do virtual conferences and various other things. And so there's enough capacity there. So they're kind of getting away from a dollar per megabyte cost structure to just offering capacity and giving operators the option of buying into all or, or part of that capacity. The pricing structures are still evolving and these services are still evolving. And that's why I found, the agreements with OneWeb so remarkable because they're really, both Gogo and Satcom Direct, are banking on this LEO satellite reaching its full network and being able to successfully turn on, probably in the 2024, 2025 timeframe.

Thierry Dubois:

Thank you, Bill. What about aircraft sales? We've heard about biz liners, in particular, Airbus, Boeing; they also are in the business aviation market. Angus, will you hear from them?

Angus Batey:

Oh, interestingly, they both seem to be targeting new markets. Boeing, in particular, talked about the way that the charter market has tended to be one that has been met for their aircraft via secondhand sales. But as we know, the used aircraft market at the moment is crazy. There's no availability. And the price of a used BBJ is now comparable to price of a new one. Albeit you're going to have to wait for the new one, but you're probably going to have to wait for the secondhand one as well.

So there's no longer that ability to save money by going to the used market. And so they're seeing that charter operators might well be a target for their new aircraft in a way that they haven't before. Airbus, on the other hand with the 220 now believe that they can address the high-end biz jet market. And so instead of just looking at the few hundred biz liners that are out there, they look at all of the long range business jets from Gulfstream, and ironically, Bombardier and others as being... If you are in the market for one of those, then you could now be in the market for an ACJ 220.

Thierry Dubois:

Ironically, because?

Angus Batey:

Because the 220 used to be a Bombardier aircraft.

Thierry Dubois:

Molly, Angus just referred to a crazy or very active secondhand market. Did you hear the same?

Molly McMillin:

Absolutely. I attended a panel discussion by several brokers. It was a lively discussion about the market and maybe where things might be going. They mentioned how inventory is very low, as Angus said. And that a lot of the buyers were either high net worth individuals, charter companies, corporations, a variety of buyers; and many of those sales are cash. They're just all cash sales. So they don't have to worry about lending because it's hard to get in, take the aircraft and get it in to get a pre-buy inspection. They want to get an aircraft. If somebody calls and it's couple of years or three years, or even up to four years, you might have to wait for a new one. Then they may not want to wait that long. And so turn to the pre-owned market.

On the flip side, the prices have gotten so much higher in the pre-owned market. Then you start moving over to the new market. It's just been just so robust and it's hard to keep up with. Part of that discussion was though, where are things moving now? And one of the brokers mentioned that just in the last couple of weeks, she's had two aircraft owners that wanted to say, maybe I should go ahead and put my aircraft up for sale now in case the market might turn or start to slow. So that now people are wondering where the market is going. There seems to be a consensus that it's modulating, its craziness of the price increases might be flattening out. But there seems to be a consensus that if there is a downturn, it won't be like the downturn of 2008, it might be just back to normal.

Thierry Dubois:

And normal in business aviation has various definitions.

Molly McMillin:

Well, normal meaning an aircraft is like your automobile that depreciates over time, and in a normal market. So it could depreciate at a normal level, but no one knows. And they said the next month might be very telling on where the market is going.

Lee Ann Shay:

Rollie Vincent, at a JETNET iQ press conference yesterday, I guess it was, also said that the number of used aircraft has been consistently declining each year since 2019. And the market right now is still pretty much... Sellers are getting asking price for their used aircraft. But he said that there are enough cautionary signals in the industry that there could be a correction, a little bit of a bubble burst coming. But I agree with Molly, it's not going to be a precipitous down climb, unless something like a COVID happens again, but it could be turning a little bit.

Thierry Dubois:

I'm afraid that all we have time for today. We hope you are enjoying our coverage from EBACE in the digital edition of ShowNews, and at aviationweek.com/ebace. The BCA Podcast will be back with another episode in a few weeks. Don't miss it by subscribing in Apple Podcasts or wherever you listen to podcasts. You can discover all of Aviation Week's podcasts at aviationweek.com/podcasts. Thank you very much for listening.