Business Aviation CEOs Discuss the Industry’s Next Phase of Growth

The business aviation industry is experiencing robust growth, driven by wealth creation and a younger demographic entering private aviation. At the NBAA-BACE conference last week, four CEOs from some of the largest companies discussed the trends and challenges driving the industry.

The lunchtime panel titled “Architects of Business Aviation’s Future” included Michael Amalfitano, President and CEO of Embraer Executive Jets, Eric Martel, President & CEO of Bombardier, Ron Draper, President & CEO Textron Aviation, and Mike Silvestro, CEO of Flexjet, with Phil LeBeau of CNBC as moderator.

State of the Business and Industry Trends

Overall, the industry is doing very well. Private planes are flying 40% more than pre-COVID levels. And, with global wealth projected to grow 20% by 2029, according to Credit Suisse, this is expected to fuel even more demand for private aviation.

Michael Amalfitano of Embraer noted, “the industry is robust, strong, resilient. It's interesting to see, despite all of the impacts that we have from government shutdown or tariffs or other activities. It is very strong. And I think the thing that's driving that is wealth creation.”

Ron Draper of Textron said “All economic indicators are it's good whether you look at backlog levels of the OEMs, whether you look at flying activity, whether you look at the used market.” adding “All indicators are healthy, and I think all the OEMs haven't over produced in this cycle, so I think supply and demand are aligned and the market remains strong.”

Demographic Shifts and Customer Behavior

Mike Silvestro of Flexjet commented on a younger demographic entering the private aviation market, with 40-somethings moving directly to super-midsize and heavy jets. He highlighted the trend of younger customers wanting experiences over material possessions, viewing private aviation as part of their journey.

Specifically, Mike Silvestro stated, “I would describe it as younger, larger, and longer. What I mean by that is, at Flexjet, we've seen a decidedly younger first entrant into our space. A generation ago, a man or woman would wait till their late 50s or early 60s to start flying privately, even though they could financially afford it. But, right now, the 40-somethings are all in, and they're not waiting, and they're not flying small airplanes.” Expanding on this, he added, “They're moving right into mid and super-mid and heavy jets, and they're going around the world. For the first nine months, so far this year, we've done 1,000 Atlantic crossings.”

Phil LeBeau noted recent trends in private jet use, where fractional and charter usage have grown faster than corporate fleet use. He asked how much of that is being driven by companies changing the mix of their private flights.

Mike Silvestro replied that “a big part of our business at Flexjet, forever, has been supplemental lift.” Adding “what I mean by that is corporate flight departments fly their own aircraft, but I think over the years, fractional has given the really creative and thoughtful fleet managers (an option), rather than buying the fifth or the sixth or the seventh aircraft in their fleet, why not supplement what they do with fractional.” He continued by explaining the reasons companies do this, saying, first of all, that it gives them access to different-sized aircraft they might not have in their fleet, but which are better suited to certain mission profiles. He also gave the example of the flexibility that a national floating fleet provides, giving the example of “you have an executive that needs to go from San Diego up to Seattle, and you're based in New York, you just call your fractional provider,” who provides a plane that happens to be on the West Coast.

The aircraft manufacturers embrace the value of partnering with large fleet operators, such as Flexjet, to showcase their aircraft. Specifically, Michael Amalfitano commented, “that every time they're on a Praetor jet or a Phenom jet in their program, they're showcasing our brand.” And Ron Draper echoed this sentiment, saying, “It's a partnership to sell airplanes, and so fractionals are great, and that opens up the market to people who may not buy the entire airplane. So, it benefits the entire industry.”

Privacy Driving Fractional

Phil LeBeau also inquired about privacy, driving the move to fractional ownership, asking, “How much of the increased use of fractional or charter is driven by corporations or executives, saying they want a little more privacy?” Mike Silvestro very much confirmed that privacy is a driver, saying, “If you have a high-profile executive who doesn't want to be tracked, one who doesn't want that scrutiny, the anonymity that fractional provides is a huge advantage.” And Phil LeBeau asked further whether that also extends to wealthier clients? With Mike Silvestro saying it's really important to people with a high profile, because they just want anonymity, whether they're businesspeople or ultra-high-net-worth individuals.

Future Developments, Including AAM

The panel members also discussed future developments, new technology, such as “Advanced Air Mobility” (AAM) and the potential impact on private aviation.

Both Michael Amalfitano and Ron Draper are excited about the different propulsion systems that are at various stages of development. With Michael Amalfitano noting that, in addition to electric motors, there are hybrid-electric and hydrogen-propulsion solutions that have the potential to unlock growth. While Ron Draper commented that in addition to the propulsion technologies, he is also excited by “different types of avionics systems, the different types of autopilots, all the way up to full autonomous systems.”

Eric Martel built on all this development, saying that Bombardier “is thinking of changing the shape of the plane.” And Michael Amalfitano affirmed these thoughts, saying that with the future potential for autonomous aircraft, “why does the body have to be the shape it has been for the last 60 years? So maybe there will be different structures that we'll see.”

Embraer is one of the companies building eVTOL (Electronic vertical take-off and landing) aircraft, with Michael Amalfitano noting that “there are lots of competitors that are trying to unlock the potential of urban air mobility and advanced air mobility.” The Embraer eVTOL aircraft is called Eve, but Embraer is also building a global network of services and support, and an air traffic management solution for the Urban Air Mobility (UAM) ecosystem. Michael Amalfitano commented that with Eve, they are creating a new concept for shorter trips “to just connect you to a phenom operator in the private space, or connect you to a commercial jet in the commercial space with the airlines.”

But he added “we're taking our time, and we're wanting to make sure that we bring safety and reliability to that new marketplace. We have hope to have the first flight by the end of this year and enter into service by the end of 2027. With an almost 2,900 order book for their Eve units, they have certainly attracted a lot of interest.

As an operator, Mike Silvestro added his thoughts about AAM / UAM, saying “it's coming. I think there's no question that this industry is going to be the way of the future. It just depends upon how long.” Directional Aviation, Flexjets parent company placed an order for 200 Eve aircraft in 2021 and Mike Silvestro also noted “We operate a fleet of helicopters, right in New York and London and in South Florida. We got into the business about six or seven years ago for this very reason, because we felt like operating in that environment with rotor-wing vehicles would be very similar to what this new technology would be. So we felt like there would be lessons learned. And so, as an operator, we're learning our lessons, and when that time comes, we'll be ready.”