Elections, perception, and the turkey sandwich – 3 takeaways from CJI Miami 2024

21 Nov 2024

The weather and location make CJI Miami a wonderful conference to attend. However, it is the people, the content and the networking which elevate it into one of the pre-eminent international business aviation events of the year. 2024 did not disappoint! Here are my top 3 takeaways:

The election

6 days after the US election, CJI Miami kicked off with a post-election special with business aviation leaders giving their thoughts on what another Trump administration will mean for the industry:

• There is hope many current positions within the FAA will be viewed as bipartisan; in other words they will not be treated as political appointees which will simply be replaced due to their connection with the Biden administration. If there is a wholesale replacement of top personnel, work will slow and progress on key FAA projects may stall. In any event, new political appointees will need to be educated in business aviation which is a task that will fall primarily to NBAA and GAMA who frequently have to deal with the lobbying on Capitol Hill.
• Bonus depreciation? 1031 exchanges? Could they make a return?! Leading tax experts discussed the likelihood of tax benefits being reintroduced to business aviation. While many of the audience felt Trump would bring back bonus depreciation the panel were more cautious; they explained the new administration will be keenly focused on their election mandates: tax cuts, new jobs and immigration. Therefore, if business aviation is to see a tax benefit it will likely be by default rather than by design.
• Does Trump equal increased aircraft sales? The reaction from brokers was mixed regarding whether a Trump administration will result in an immediate uptick in aircraft sales. The consensus was buyers who sit on the fence will always find a reason to sit on the fence and conversely those who want to buy will buy notwithstanding the result. Any pause in the purchase timeline is to understand the tax implications of a new administration and this would likely be seen in the first 100 days – i.e. by 1 May 2025.

Perception

Most will agree that business aviation is in a perpetual fight with a perception problem. However, it became clear during CJI Miami that perception is not only an external problem. The first example of this was a fascinating ‘one year on’ update from George Mattson of Wheels Up. He noted “perception was not reality” when it came to what people thought of the state of the Wheels Up business. In reality “operations were doing much better than perceived” and business was going well.

The next perception issue was that of Europe. Many delegates felt Europe was suffering due to environmental and political pressures in comparison to the US and therefore business was not good. The international transactions panel confirmed this was simply not the case, and while charter may have declined slightly in comparison to previous years Europe is still very much open for business.

Lastly many of the audience believed fractional ownership was soaring in contrast to charter and private ownership which were in decline. Of course, when this perception was placed in the light of data analytics the picture was far less drastic. While fractional was doing well and making steading gains, charter and private ownership were only slightly down on the crazy years of 2022 and 2023 and still ahead of 2019. Many speakers noted the reality is that the balance is coming back to the market and what we are seeing is a normalisation period.

The $175 turkey sandwich

Private equity has led to the $175 turkey sandwich – this now infamous statement from Kenn Ricci was prompted by the steep rise in costs to business aircraft owners resulting from increased private equity investment in the industry. References to this ridiculously priced sandwich were made several more times during the event to compare and contrast cost issues throughout the industry.

One of the most poignant references was during a discussion on sustainability.  Top quality carbon offsets would be less than the $175 sandwich for an average flight. Carbon removal credits work out between 1 or 2 sandwiches per hour of the flight. And moving to SAF would increase again however when compared to inflight catering costs begins to look reasonable!

That’s a wrap

Thank you to the whole team at CJI Miami for putting on a brilliant and thought-provoking event. We can only look forward to getting back to the sunshine in 2025.

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