Millennial Outlook: Views from the Industry’s Young Professionals

January 1, 2016

For more than a decade, generational transition has been a hot topic in business aviation. As the average age of managers in the industry ticks higher, pundits have given advice on how to hire millennials, how to train them, how to integrate them into teams and what they expect as customers.

Now, the next generation is coming of age. Across the industry, young leaders and entrepreneurs under 40 years of age are carving a niche, and they have a unique viewpoint on the future of business aviation. So NBAA listened.

“It’s never stagnant. Technology is always changing. Companies are always merging. Business aviation is a very dynamic environment,” said Arthur Ramey, a 28-year-old pilot for Haymon Sports based in Las Vegas and a certified flight instructor. “And the world will continue becoming a smaller place. Business aviation will be even more important in the future.”

Ramey and other young aviation leaders singled out technology as the greatest force driving change in the industry, followed by the demographic shift. They also have a positive long-term outlook for the aircraft market.

Aircraft Demand

Looking ahead, Ramey predicted regulatory requirements would put pressure on older aircraft. “You have a lot of older aircraft that will be affected by avionics mandates, noise abatement [requirements] and concerns about carbon emissions, all of which will push them out of the sky,” said Ramey. In turn, fractional and charter operators will continue updating their fleets, boosting aircraft demand.

Mike Avery, the 25-year-old chief operating officer at FuelerLinx in Van Nuys, CA, agreed that more advanced aircraft will stimulate demand.

“Even if margins on fuel stay low, there’s a strong reason to invest in more fuel-efficient aircraft,” said Avery. “Modern aircraft are great at tankering, so now it makes sense for more operators to have their own fuel farm” and cut operating expenses by fueling at their home base.

Customers and passengers want better interfaces. Just like with online banking and calendars synched across all your devices, business aviation needs a technology refresh to improve customer service.

Having flown a Gulfstream GIV-SP to more than a dozen countries, Ramey is betting that emerging markets will be an important source of aircraft demand, despite today’s global economic uncertainty.

“And, in about 10 years, I think we’re going to see business aviation break the sound barrier,” said Ramey. “I absolutely think there’s a market for it.”

Today’s business jets can do Mach 0.92, so Ramey may not be far off. “Business aircraft are tools, and their biggest benefit is saving time,” said Joe Barber, the 32-year-old director of aircraft management at Clay Lacy Aviation. “The need for that will always exist.”

Charter Market

While a technological leap like supersonic flight might be a decade off, technology is already changing the market for aircraft charter. A handful of new apps – such as Jetsmarter and Victor – are trying to scale a business model similar to “Uber for air travel.”

Even though millennials are comfortable with the sharing economy, those in the industry don’t see such models replacing the charter broker. “There could be a type of young, independent business traveler who wants to share a charter flight, but privacy is a big reason for using business aviation,” said Barber. “So most customers will probably grow out of that phase.”

Diana Zuluaga, the 33-year-old co-founder and president of charter broker Jet D’Or, agrees. “Booking an aircraft is a service that requires the highest level of personal customer service. That can’t be replaced by a mobile app. What we are seeing is companies using apps as an entry point, but still needing a salesperson to guide the customer through the flight details.”

Customers want to compare features on different aircraft, talk to an expert and be surprised by a new level of service. That may always require a personal touch, but young leaders believe technology will be essential to delivering on customer’s expectations.

Technology

“Customers and passengers want better interfaces,” said Barber. “Just like with online banking and calendars synched across all your devices, business aviation needs a technology refresh to improve customer service.”

Barber also said owners and operators will come to expect more accurate and timely information about their aircraft. “Just like the data stream you get from a Tesla today,” he said, “I think we’ll see that start to feed directly from the aircraft into scheduling software and financial software.”

Instead of automating the front end of charter with an app, young leaders expect most of the technological innovation to happen on the back end.

“Business aviation has not been disrupted successfully,” said Zuluaga. “Managing all the empty legs on business aircraft flights represents a huge opportunity. With more advanced platforms reflecting true availability, we can better match these empty legs with clients willing to take them at a reduced cost. As brokers, that’s what we’re waiting for.”

Filling empty legs is a popular example of how better data and analytics could be combined with new software solutions to make business aviation more efficient. But young leaders suggest there are many more.

“Business aviation was behind on digital technology; now lots of companies are doing things with software to fill a gap in the industry,” said Avery. “Right now, business aviation is growing. Maybe 10 years ago, flight departments would just hire more people, but today companies are looking to scale efficiently.”

We’re working to open new markets with young clients, such as millennials and entrepreneurs. But we’re also bringing in elderly clients, and clients in developing countries who are now flying for the first time.

Software can help do that if it’s integrated into enough different aspects of the flight operation. Avery predicts today’s large numbers of independent software providers will see a wave of mergers, and smaller companies will either partner with or be acquired by large aviation software providers, streamlining how different departments within the company, systems – and even the aircraft itself – talk to each other.

Demographic Shift

The other trend driving change in business aviation is the demographic shift itself, both inside the hangar and on the customer side.

“We’re working to open new markets with young clients, such as millennials and entrepreneurs,” said Zuluaga of her charter business. “But we’re also bringing in elderly clients and clients in developing countries who are now flying for the first time.”

Within business aviation companies, young professionals are very aware of the generational transition.

“In 10 years, I’ll be a Gulfstream captain,” said Ramey. “I’ll be in the left seat, answering questions. I’ll have younger guys looking up to me.”

While young professionals are certainly eager to move up, they also worry that retirements of experienced personnel could happen too quickly. With the average age of aviation leaders hovering around 55, Barber worries “there won’t be a proper download from one generation to the next.”

Facilitating that download is something all these young leaders are expecting NBAA’s newly formed Young Professionals in Business Aviation (YoPro) council to help them do. Created in 2016, the group is dedicated to building relationships between emerging leaders across the business aviation industry. “I hope communication improves, as the torch is passed,” said Ramey. “The more fragmented our industry is, the weaker we are, so let’s open the floodgates of information.”

View NBAA YoPro resources at www.nbaa.org/professional-development/yopro/