Forget gazing into crystal balls, the future of business jet flying lies in increased utilisation, says Brazilian jet manufacturer Embraer
The global business, economic and political climate was the largely unspoken subtext of the recent Middle East Business Aviation Association (MEBAA) show in Dubai, UAE, in December. The show, however, was alive with plans being shared and scuttlebutt about new models and in-hand research occupying much of the conversation in the business jet arena.
Marco Pellegrini, President and CEO of Embraer Executive Jets of Brazil, cheerfully embraced the reality of the current climate and expressed a disarmingly positive view of how to negotiate these troubled times.
“We have been serving commercial airlines for 26 years and we brought that DNA to the business jet market. We designed the planes for low operating cost, high utilisation, ease of maintenance, and ease of flying. That is exactly the business model that is going to succeed in this flat market,” he says.
Asked if there was a move away from super luxury jets for individuals to a multi-purpose jet that can be used in the charter market, Pellegrini opines that this indeed was the case.
“Sharing the transportation – models that allow more people to use the plane – seems to be the trend. Someone buys a plane, positions a charter company with the correct management and they start offering charter. I feel that more and more people will stop buying planes and they will be sharing. I have seen so many initiatives in that respect. That should be the new plan.”
Pellegrini’s positive view of the route through the current economic difficulties was enthusing. “I think we should be doing more to promote business; not discussing the future because you cannot control it. What you should do is promote better utilisation of the business jet. On average, they fly two or three hundred hours a year and they are designed for thousands of hours.”
A MATTER OF EFFICIENCY
He quotes supporting statistics, which seem to justify his infectious optimism: in the US, in 2015 for example, 700 million people flew commercial, and just one million flew biz-jet.
“If you compare the gap in utilisation of commercial and biz-jet, it’s huge. The question is: is there a way to add more people to the biz-jet sector to fly more? That should be our discussion – not complaining or trying to identify the future!”
He observes that if a traveller was able to use a biz-jet, he would arrive 50 minutes before the flight, could work with more privacy in flight, use wi-fi, and improve productivity by 50 per cent.
“Instead of a crystal ball, you should be looking at new business models and try to promote further biz-jet utilisation, to promote better transportation,” he says. “So the question is, how can we at Embraer help the industry use biz-jets in a more efficient way?”
Pellegrini has the answer, at least for Embraer. “We do have planes for that exact segmentation – the Phenom 100 and 200. These are designed for maximum utilisation and low operating cost and they fit very well into that business model.”
Embraer ended 2016 with 108 aircraft delivered to the commercial market and 117 to the executive aviation market, totalling 73 light and 44 large executive jets. The total of 225 aircraft for these two markets represents the highest volume of deliveries in the last six years. As of December 31, its backlog totalled $19.6 billion.
However, it is the utilisation sector that Pellegrini finds stimulating in terms of growth. “We are investing in helping companies that are providing premium transportation with new business models that we believe are going to succeed. For example, smartphones. People are using them to access transportation – point to point – using these apps. We believe that this could be the biggest breakthrough in the next year and it will invaluably support our initiatives.”
Embraer’s Director Corporate Communications Guy Douglas offers the example that Cedar Executive, a wholly owned charter company of Middle East Airlines, had a Legacy 500 for less than a year and is already asking for a second.
“This is excellent news because it confirms their business model for charter services. Our aircraft are particularly good at that because we have taken the knowledge we have from our commercial aircraft, which are based on the fifteen-minute turn-around and back in the sky making money. We use that high utilisation mode on our business jets making sure the customer has something that really works.”
Last year, Embraer won two awards in the “best customer support” category because of its on-time take-offs and departures, which stands at 99.5 per cent.
“We are becoming strong in the charter and air taxi markets that value this kind of efficiency and are really developing. Moreover, people are using their aircraft to allow others to fly. It’s an important niche market,” he says.
Douglas notes that Embraer has been able to develop three aircraft at a time. “It derives from our being pretty much the only aircraft manufacturer with operations in the commercial, business and defence fields. We have the same teams working on the development and testing of the planes so that the things that they learn cross-fertilise and inform development of the whole range of aircraft.
“Three next-generation E-Jet aircraft – the E2s – in our commercial aircraft sector are under development, the E175-E2, E190-E2 and E195-E2. The E190-E2 already has three aircraft in the test programme – that’s in the regional commercial market each with a capacity of about 130 seats. That’s where we dominate the market with a 60 per cent share. For example, at London City Airport an Embraer jet takes off every 17 minutes, and 42 per cent of every cycle is an Embraer jet.”
THE LUXURY FACTOR
The economic reach of the oil market is much broader than simply cheap fuel – the activities of the oil industry drive the activities of a very many businesses and this applies equally to the Middle East business jet market. It is also the same for the large carriers in the region which rely on premium passengers to make their numbers work. Maximum utilisation of a business jet sharing does not mean a downgrade in luxury, merely capitalising on the efficiency and usability of the aircraft.
“We see ourselves as makers of a luxury product, but of course there are other variables that apply,” says Douglas. “If you are a corporate and you want to buy a jet for business use, then you may not want to be seen as opulent with your shareholders’ money. So fitting out the jet might involve different materials which are more appropriate for a business tool.”
Embraer has worked hard towards getting a market share, and has become a significant player in the business jet market in just a decade.
“We recently delivered our thousandth executive jet so we have gone from ‘zero to hero’ in just ten years. We have a portfolio of six jets that are mostly clean sheet designs, apart from the big Lineage, which is one of our commercial jets reworked,” says Douglas. “For us now, customer experience is everything, and we will not be playing in the heavy discount game that is going on right now. Our finish and kit is right up there with others in a more commercial area. And the support we give is second to none.”
In August, Embraer Executive Jets secured first position for the second year in a row in Pro Pilot magazine’s Corporate Aircraft Product Support Survey. The 8.58 overall scores – the highest in 26 years of this research – confirms the company on the top of the two most important specialised surveys in the industry.
Earlier Embraer had soared to its first-ever solo number one ranking in Aviation International News’ 2016 Product Support Survey, receiving its highest-ever combined overall average (8.4 out of a possible 10) for new and pre-flown business jets. To top the awards year off, the British Airline Charter Awards (BACA) gave Embraer the Aircraft Manufacturer of the Year for 2016.
Everything, as Douglas explains, is now about customer experience. “We believe that if you spend money on a jet you want it to work and you want it to be a great experience. No compromise on quality, but a focus on efficiency and customer service. We are adding things to the Embraer package, not taking them away. If your jet is AOG (aircraft on ground – unserviceable) for a length of time, you will get a call from Marco Pellegrini (President and CEO of Embraer Executive Jets) to explain exactly what is happening.”
There is a slowdown over the whole aircraft industry, it is an extremely competitive market and to rest on the company’s laurels, impressive though they may be, does not develop business. Embraer is already test flying the next generation of commercial jets, yet the current generation is little more than ten years old.
“That is a cycle that is unheard of – but we are determined to keep ahead,” he says. “There are new entrants into the market from other countries – but that serves only to drive us to do more in terms of fuel efficiency and passenger comfort and the whole Embraer package.”
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