With environmentalism and sustainability high on the corporate agenda, can private jets continue to be justified? We hear from experts about how industry insiders are working to make things more sustainable.
The environmental cost of private jets is in question. How can the industry adapt to become more sustainable? (Credit: t-lorien/iStock.com)
For decades, corporate leaders have taken executive travel for granted – the exclusive lounges, the private jets, the cocktails at 20,000ft. But with environmentalism the watchword in boardrooms and government ministries the world over, shouldn’t CEOs be taking the train?
Lizzie Waymouth talks to Patrick Gallagher, president of sales, marketing and service at NetJets, and Kennedy Ricci, president at 4AIR, which encourages aviation sustainability, to learn about the past impact of executive air travel on the environment, how industry insiders are working to make things cleaner – and whether the age of private jets will ever pass into history.
Having taken my first post-lockdown flight this summer, I am not particularly surprised that many commercial airlines are still struggling to get back to full capacity. Being told to arrive at the airport three hours early for a 7:30am departure, shuffling through long queues at security and extra checks at the gate, and despairing when there is only a limited menu available on-board, it’s easy to understand why passengers who have the money are so attracted to private jets.
And perhaps that’s why, despite interminable travel restrictions, and many companies choosing to do business from home, the executive jet industry has soared in popularity. According to the global TRAQPak report, published by Argus International earlier this year, June was the busiest month for private aviation since October 2007.
The company also reported that 1 July 2021 saw 12,345 business flights take off in North America, making it the sixth busiest day in the past 14 years. Indeed, Argus forecasts that the business aviation market will emerge from the pandemic 5–10% larger than
it was before. The business travel segment was quick to see green shoots of recovery after travel reopened. In the US, the largest market for executive travel, recovery has been even faster.
NetJets, based in Colombus, Ohio, is just one of the companies taking advantage of the growing demand for private jets. Founded in 1964, the company pioneered the concept of shared aircraft ownership and has grown to cover a fleet of more than 760 aircraft, with plans for further expansion.
“NetJets has seen an unprecedented demand for private travel in 2020, with a 350% increase in demand for new ownership compared with previous years,” says Patrick Gallagher, president of sales, marketing and service at NetJets.
“While leisure travel led the recovery in the US, business travel is now exceeding pre-pandemic levels,” Gallagher continues. “This trend has continued throughout 2021 so far, with our overall demand in July 2021 being 38% higher than in July 2019 and 92% higher than in July 2020. We project that this trend will continue through the remainder of the year, both in the US and in Europe.”
Even more impressive, perhaps, is that the private jet segment has also managed to attract new passengers during the pandemic. Malta-headquartered private aviation company VistaJet, which operates a fleet of 73 business jets, reportedly had a 320% increase in new memberships in July 2020 compared with the same month the previous year. What’s more, 71% of the company’s incoming requests were from new passengers who didn’t use private jets regularly.
NetJets has seen similar trends – between January and October 2020, the company saw three times as many new customers as the same period in 2019 – and has plans to expand accordingly. As Gallagher puts it: “With demand projected to stay the same throughout the rest of 2021, we will add more than 26 new private jets to our existing 760+ aircraft by the end of the year. Our plan calls for an additional 70 deliveries by the end of 2022.”
More to the point, travel will always be necessary to some extent – major deals, trade fairs and conferences will always be better off conducted in person – and Deloitte predicts that US business travel spending will return to as much as 80% of its 2019 level by the last quarter of 2022. In a similar vein, the same study also notes that nine out of ten companies surveyed expect their travel budgets will return to 75% of 2019 levels by the end of next year.
Greener skies
Yet despite its quick recovery, the executive travel segment is unlikely to return to business as usual. With many companies setting stricter emissions targets, and cutting corporate flights in favour of Zoom calls and local meetings, demand has taken a permanent hit. In September, for example, Zurich Insurance announced it would be cutting emissions generated from employees’ flights by 70% from pre-pandemic levels in order to meet the company’s sustainability goals.
A month earlier, Mars announced it planned to slash corporate travel by 50%, or 145,000 flights. This is only likely to continue: research by Deloitte recently found that, in the next 12 months, 58% of companies surveyed plan to reduce the frequency of business travel, 67% expect to optimise meeting agendas to reduce the need to fly and 76% will be transitioning to more internal meetings online.
In other words, it may become more difficult for executive jet companies to keep existing customers, let alone attract new ones, if they don’t change the way they operate.
Given the rise of ‘flight shaming’, to say nothing of the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming earlier this year, it is unsurprising that the private aviation industry has increasingly come under fire. In July, Extinction Rebellion activists attempted to block entrances to Farnborough Airport in Hampshire – a small airfield primarily used for private flights – in protest against the high levels of CO2 created by private flights per passenger.
And with a number of public figures, including Prince Harry and Boris Johnson, widely criticised for travelling by private jet earlier this year, the overwhelming feeling appears to be that this is an unnecessary and unacceptable way to fly – especially when the rest of us are being pressured to do our bit to save the planet. So, is the industry doing enough to ensure operations are sustainable moving forward?
“There has been a lot of interest [in sustainability] since the IPCC report came out,” says Kennedy Ricci, president of 4AIR, a company that provides sustainability ratings for aircraft operators.
“There has always been an interest on the operator level, but you can really pick up on the individuals and corporates who, after that report, want to make sure that they’re doing something.”
Although air travel is only responsible for less than 3% of global emissions, the sector is under growing pressure to reduce its environmental footprint as it continues to expand. That’s where companies like 4AIR come in: it offers a rating system to make it easier for operators to implement sustainability goals and to educate flyers about how they can reduce their footprint.
“4AIR comes and looks at the sustainability efforts and provides a rating. We look at how far operators are going, whether they are rating everything and doing it in line with best practices, and whether they are actually following through with it,” Ricci explains. “We go a step further and will actually provide a programme for operators if they don’t have one.”
4AIR’s rating system is divided into four levels: bronze, which requires a 100% carbon offset; silver, which requires a 300% offset to comprehensively offset emissions; gold, a 5% direct emission reduction; and platinum, which requires a company to make a direct contribution to 4AIR’s non-profit Aviation Climate Fund based on its carbon footprint.
According to Ricci, most operators are currently making progress in the second or third level – they are “willing to bring in some carbon offset initiatives or small amounts of sustainable fuel, but the fuel can still be expensive and difficult to find.”
More broadly, the private aviation sector is leading the way when it comes to reducing its impact on the planet. “We’ve seen the executive jet industry willing to go a little bit further,” Ricci continues. “Fleets are usually a bit smaller so it’s less cost-intensive for them to implement some of these measures, and there are fewer people to convince.”
A case in point is NetJets, which this year was the first private aviation company to purchase Air BP’s sustainable aviation fuel (SAF). The fuel is produced using waste-based sustainable feedstocks, such as used cooking oil and non-palm waste oils from plants or animals. This is then co-processed together with fossil fuels to create a low-carbon fuel.
“Our purchase of Air BP’s SAF has been a huge success and is helping us to see a reduction in carbon emissions by 80% compared with standard aviation fuel,” Gallagher says. NetJets plans to purchase 325,000 US gallons of SAF within its first year of partnership with Air BP.
The company has also made an additional purchase of three million gallons as part of a deal with Signature Flight Support, which will provide NetJets with enough SAF to account for all flights from San Francisco, where the fuel supply is located, as well as its home base in Columbus.
“We will continue to explore additional SAF purchase opportunities in the US and Europe,” Gallagher adds, continuing that NetJets is also making strides in terms of carbon neutrality. The company’s European operations have been carbon neutral since 2012, “going above and beyond European Union regulations”.
Looking ahead, Gallagher says that NetJets’ additional goals include “offsetting all administrative and training flights in the US beginning in 2021 and continuing [the] global Blue Skies programme, which allows owners to make their flights carbon neutral”.
Other private operators are following suit: in April, for instance, VistaJet announced its commitment to becoming carbon neutral by 2025, far surpassing the target of 50% by 2050 set by industry bodies. This would make it the first organisation of its kind to achieve full carbon neutrality.
“We’ve seen the executive jet industry willing to go a little bit further. Fleets are usually a bit smaller so it’s less cost-intensive for them to implement some of these measures, and there are fewer people to convince.”
Building back better
But what are the challenges for executive travel companies looking to reduce their impact on the planet? According to Ricci, the question is simple: “How do you decouple the growth of the industry with the growth of its carbon footprint?”
As the private aviation sector continues to expand and take on new passengers, particularly as borders reopen and normal business resumes, it will be more important than ever for operators to step up, reduce their footprint, and win over environment-conscious travellers. Sustainability initiatives are not only vital to save the planet, but also to keep growth steady.
Ricci emphasises, however, that operators still need to be more aware of the different opportunities available to them. “Carbon offsetting has been
around [for] 20 years, but there are still some difficulties around the different types of projects,” he says.
Even so, Ricci is keen to stress that the pandemic has not slowed progress. “We expected that Covid would slow down the conversation around sustainability, but it actually sped it up,” he says. “I think people kind of took a step back and thought ‘the industry is kind of low, how do we look at building it back better?’ – and we have seen that interest continue.”
With this in mind, what might the future hold? Ricci believes this is a very exciting time for the industry, as “we’re looking at new types of mobility – urban mobility, regional mobility – and each of those will have different sustainability solutions”.
For example, he explains, short-haul flights will be moving towards the use of electric aircraft, whereas hydrogen power will be a more appropriate fit for medium-haul, and for long-haul flights the conversation will be around sustainable fuels.
As Ricci explains, “all of these are going to need new aircraft designs [and] new propulsion technologies”, such as all-electric and hybrid electric solutions, which will help to reduce emissions and fuel consumption. “It’s very exciting to be in the industry right now and see where the sustainability push takes us, I think there are a lot of interesting ways that the industry could change.”
NetJets is also looking for new solutions. “To expand our use of sustainable fuels we have invested in WasteFuel. This SAF initiative turns municipal waste into aircraft fuel,” Gallagher says. The company plans to open a new biorefinery, set to be operational by 2025, and which will turn one million tonnes of landfill waste into 30 million gallons of SAF.
“We have committed to purchasing at least 100 million gallons of WasteFuel within ten years, with four more biorefinery sites to be developed in the coming years,” Gallagher adds. With continued plans for innovation in terms of both aircraft and fuels, it’s clear that the industry is not slowing down, and is preparing to adjust to a new reality – one where passengers expect airlines to be conscious of their environmental impact.
Although corporate travel is unlikely to return to pre-pandemic levels any time soon, new fuels and technologies should ensure that executive jet operators continue to attract new passengers. After all, an instant coffee in economy can’t compare with champagne and personalised service on a charter flight.