Reflecting on 2024

17 Dec 2024

 As another eventful year draws to a close: the Martyn Fiddler team took a moment to reflect on 2024, uncovering insights and lessons to carry forward into 2025. Here are our top four takeaways from the year 2024:

Polarising Elections – Stability is out; Uncertainty is the “New Black”.

There were over 30 national elections during 2024 and not everyone has been happy about the results. In the UK, millions have signed online petitions to hold another general election due to public upset at increased taxes. In the USA, Democrats have been trying to work out what went wrong. Canada and Mexico are trying to figure out what happens next. Further afield, allegations of election interference and “fake news” media have been rife with challenges to election results across Europe and beyond.

But what effect does geo-politics have on business aviation and its future?

• Taxes: In the UK and Europe business aviation continues to be a scapegoat for politicians to tax; it is an easy industry to blame for environmental hurt and is an easy target for those who want to point at the wealth imbalance as the reason for all of societies woes. Specific and extreme increases in business aircraft passenger taxes are a clear example of this while luxury and carbon taxes are being considered as future taxes for those deemed to be ‘wealthy’.
• Tariffs: In the USA, the new Trump administration brings the hope of tax reduction, deregulation and favourable benefits for business aviation, including the reintroduction of bonus depreciation which could lead to an increase in sales. However, while many are hopeful of tax reduction internally, the president-elect’s rhetoric regarding punitive tariffs on international imports could have a significant impact on an already frayed supply chain.

Take-out:

Business aviation should sit tight and see where politicians decide to take the rules next. The industry will need to work hard through its associations and trade bodies to educate new governments regarding the benefits of business aviation and the wealth its clients bring to benefit the public purse.

Consolidation or Bust?

Love it or hate it, reality TV is here to stay. However, it is not a new phenomenon; in 1948 US television programme ‘Candid Camera’ combined surveillance with ordinary people to create entertainment. Since then, the concept has evolved and developed to become the billion-dollar industry which many households indulge in at least once a week. Why? We tune in to observe people reacting to unusual and challenging situations, competing to survive longer in the game, and trying to gain popularity (or notoriety) to increase their survival chances.

While many see reality television as escapism, it is also an interesting reflection on the reality of new technology. As each new industry matures, it goes through a process of consolidation – similar to how the reality TV whittle down their contestants. To stay in the game for longer, businesses need to grow and gain power; they do this by acquiring competitors and assimilating businesses within their supply chain.

For those not looking to grow, the options start to look limited: try and retain your independence by being niche and unique, be acquired or be voted out.

This is especially true in new technology where being popular (and having a well thought out technology and scalability plan) is crucial to getting the funding required to get to production of a concept. And waiting in the wings are the old technology businesses – looking to see who will be successful and then putting the offer to acquire the best in show. Arguably cruel – and perhaps lazy by the incumbents.

What is also cruel is that winners are nearly always forgotten as they are acquired as soon as they get to the commercially viable stage. Think about all the technologies that have been acquired by Meta, Alphabet and Apple. And those that didn’t get bought? They shuffle off to be seen as failures.

Take the rise and fall of Lilium, the German air-taxi eVTOL business which filed for insolvency in October after it failed to raise additional finance to develop its aircraft. Lilium was founded in 2015 and raised approximately $425million from investors before listing on the Nasdaq in 2021.

However, things started to go downhill when deadlines and milestones in its progress were not met, and investors were not seeing the ROI they anticipated in the timescales they had hoped for. The result was one less player in the globally competitive eVTOL market.

For those that are left, the reality TV of aircraft eVTOL technology is that it is still all to play for.

At the IBGAA conference in November 2024, a panel of eVTOL and electric aircraft specialists noted there are now only a few players left. Their predictions for the future were that the consolidation will leave only two or three companies left standing. Such is the natural order of markets.

Take-out:

The consolidation of electric aircraft start-up will happen, and the OEM’s start to circle and acquire.

Does Sustainability need a Rebrand?

Until recently it was not possible to enter a conversation about aviation sustainability without being told that SAF (Sustainable Aviation Fuel) is the only way forward.

In fact, the inaugural SAF Investor conference was held in London during February 2024. Yet, as we approach the end 2024, the rhetoric is changing. There is a movement away from SAF as the only answer to aviation’s sustainability problem.

The reason for this is the ‘S’ in SAF – rather than a disagreement about lower carbon fuels being preferable to traditional aviation fuel.

Why does use of the word sustainability evoke such an emotional response?

The answer is that only a limited amount of SAF is considered 100% carbon neutral.

Much SAF is blended with traditional fuels and therefore it is lower carbon – not zero carbon.

Moreover, SAF is often not readily available at airports – it must be transported from its production plant to the aircraft – which in itself creates a carbon footprint. The argument is that the ‘S’ in SAF is misleading and ‘Alternative Aviation Fuel’ would be more appropriate.

During the IMPACT on Sustainable Aviation Forum in December 2024, it was clear that SAF is the short to medium term solution which is needed to reduce carbon emissions but it cannot be considered in isolation.

Rather the medium to longer term solutions of hydrogen fuel technologies, carbon capture and nonCO2 reduction actions must be invested in and developed alongside SAF, to achieve the NetZero goals of the industry. It was clear that reducing emissions on the scale required will be both difficult and expensive. It was also clear that whether it is called SAF, alternative fuel or pink fairy dust, didn’t matter to the fast approach deadlines set by the UK and EU governments for minimum SAF usage.

So, does sustainability need a rebrand? Or does it matter so long as the goal is to reduce aviation’s environmental impact? The answer is it probably depends on which part of the planet you live.

The political climate in the USA has posed challenges for sustainability, a core element of ESG. A Republican-led anti-ESG movement has sparked lawsuits and efforts to push back against what some perceive as “woke” investment practices, aiming to reshape the priorities of investment institutions.

In Europe the grass is ‘greener’. However, “even proponents of sustainable investing have been attacking ESG’s reputation. Many accuse asset managers of greenwashing: misrepresenting how “good” or “clean” their investment strategies are” – the Financial Times reports.

Lastly, many will have seen the dramatic scenes at COP29 as the Alliance of Small Island States walked out of talks for lack of meaningful engagement and funds committed to tackle the effects of climate change.

Take-out:

Reducing the environmental impact of aviation will be the greatest challenge aviation will face this century, and it is a challenge it must take seriously and tackle quickly. What we name the tools to face the challenge is one of semantics – 2025 will need to see action rather than further procrastination.

The AI dilemma

Even if you are not already familiar with Artificial Intelligence (AI), over the last 18 months you have probably noticed some telltale signs that AI generated content has been used in articles you have read, on your LinkedIn feed and more frequently, in the CVs of those applying to work with you.

What are those telltale signs that indicate the author may have had some artificial assistance? Red flags include:

• Repeated words or phrases
• Structural incoherencies
• Vague and generalised ‘facts’
• Lack of human emotion and passion
• Overly verbose language

But does it matter, and will it get better? Many of us have experimented, to a greater or lesser extent with using AI ourselves; sometimes under the watchful eye of an IT supervisor, or sometimes just to see what this ChatGPT thing is all about.

We hear repeatedly that AI is learning and improving exponentially, and that soon we won’t be able to keep up. The promise is the red flags highlighted above will start to disappear and soon you will not be able to discern what is human and what is artificial.

However, this ‘promise’ may be hard to keep for two reasons:

1. The scaling law associated with AI (putting more data into bigger AI with more power in the belief it will deliver smarter systems) is currently being reconsidered. Why? Because even the latest and most sophisticated AI models have not shown the expected improvements in line with the scaling law’s projections. In other words, AI is not learning as quickly as everyone thought, and the power needed to increase AI’s brain to learn more, is more than we currently have available.
2. When an AI generates content, it doesn’t create new knowledge. Rather AI draws data from available sources, identifies patterns and regurgitates information in a new format. The problem is that not all information on the internet is trustworthy; there is a growing amount of (human and AI generated) misinformation. If both fact and ‘alternative fact’ become the source material for AI to learn from, and AI continues to create content with regurgitated information, the real information may become diluted as the misinformation increases.

Take-out:

It is unlikely we will witness a decrease in AI funding and investment during 2025, and it is likely that further technological breakthroughs will generate more AI promises. However, it will be down to businesses to learn how to cautiously use AI to assist them and to watch out for red flags to avoid making decisions based on faulty information.

Conclusion

Business aviation is having to adapt quicker than ever before. Politics is a double-edged sword which can bring the promise of a bright future while also dividing communities. Pressures to reduce environmental impact, become attractive to investors, navigate AI and still remain in the competition will lead to stories of triumph and some of woe over the next few years. There is unlikely any chance for aviation to catch its breath before the next challenge arrives.

At Martyn Fiddler, our conclusion at the end of 2024 is that we must prepare for uncertainty and plan for action. We must enter the competition with a strategy to win.

See you in 2025!

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