EBACE IS DYING, IT’S A FACT. EBAA MANAGEMENT “WAS KNOCKED DOWN”

Gone are the days when, walking into a Learjet 60 at a static exhibition display, you could meet the former Prosecutor General of Ukraine looking for an aircraft for a fashionable retirement. And the only thought that came to your mind at that moment: “Hm, isn’t he too modest? Others choose more expensive aircraft.”

Artem Degtiarov, Chief editor at BLACKLIST.AERO

Conversations that companies’ participation in Europe’s largest business aviation exhibition, EBACE, were not worth their financial investment began a couple of years before the COVID-19 pandemic. The high cost of Geneva as such, high rates for the installation of stands and sponsorship packages during the exhibition. If previously market participants, clenching their teeth, put up with all this, in recent years the problem has become more and more clearly articulated. Nobody is ashamed to publicly say that they simply “can’t effort EBACE” financially.

Over the last three years since the world began to recover from the pandemic and what was called the “new normality”, people’s mentality and their lifestyle has changed. Likewise, approaches to business have changed. Business owners suddenly saw by themselves how effective remote work of employees can be. And there is no need for huge office spaces.

They also realized that they needed to invest money not in puffing up their cheeks, not in loud and expensive PR campaigns, but in increasing the stability of the company. Sometimes even simply putting money “in reserve” is much more effective for business than spending money on throwing pearls. What’s important is not what you pretend to be in front of people, but who you really are. Do you keep your word, despite all the difficulties?

However, in addition to the existential problems that everyone already knows or guesses about, there are two problems that make us talk about the gradual death of EBACE as a format that has not changed significantly for about 20 years.

PROBLEM 1: LEAVING OF “DIRTY” CLIENTS

This problem is objective. By “dirty” clients, I do not mean “junk” companies that are not of significant interest for business development. The number of such has increased significantly. I'm talking about the most desirable clients for business aviation: clients with “dirty money”.

Let's be honest: who all this time has been fueling the growth of the business aviation industry at such a frantic pace as it was just recently? Business aviation operators who transport businessmen and count every penny in an attempt to increase economic efficiency by at least a couple of percent???

Of course not. The real money in business aviation has always been made by those for whom it made no difference whether this or that aviation service costs 100 Euros or 1000 Euros. For those who have never been in business for a day, but still earn more from it than the businessmen themselves. For those for whom ostentation was the goal in itself of existence. We are talking about the so-called PEPs (Politically Exposed Persons).

To me personally, as a Ukrainian, it is more convenient to give the example of Ukrainian PEPs, which “raised” the European business - aviation all the past years. Just look at “half-oligarch” Sergei Kurchenko, who even a year before nine (!) Global Express aircrafts were leased for him in a row (aircraft were broken down on him every time, after operating for a couple of months, apparently unable to withstand his wild appetite for travel) was unremarkable manager selling bar equipment. And his ability to pay flight bills exorbitant by any aviation standards was explained by the fact that he was a “public wallet” of the family of then-president Yanukovych and his retinue.

Gone are the days when, walking into a Learjet 60 at a static exhibition display, you could meet the former Prosecutor General of Ukraine Gennady Vasilyev looking for an aircraft for a fashionable retirement. And the only thought that came to my mind at that moment (don’t laugh, I’m serious!): “Hm, isn’t he too modest?! Others choose more expensive aircraft.”

I really had something to compare with. My meeting with Vasilyev in an exhibition business jet took place at a time when the then-current head of the Customs Service of Ukraine, Igor Kaletnik, sent his assistant to one of the business aviation exhibitions with the task of ordering a Gulfstream 450. Why it? Apparently the $40 million aircraft fit within his “modest” budget and appetites. On that moment!

Because six months later, Igor Kaletnik discovered that the operator refuses to operate a non-stop flight with a full load on this aircraft from Zhulyany to the Maldives. It runs smoothly in a straight line. But if the airport in Male is closed, then, according to the reserve standards, there will not be enough fuel to reach the alternate airfield.

And what did this …“PEP” do?? He sold a six-month old aircraft at a $9 million discount and ordered a G550! Well, the guy made a small mistake, he took the wrong car, it can happen to anybody...

And at the same time, the then-current Vice Prime Minister of Ukraine Sergei Arbuzov was waiting for his previously ordered G650. There was simply a very long line before him at the manufacturer's. Well, you know, there are all sorts of Elon Musks, the same Bezos got in the way. In general, “some kind of commerce”...

However, even during the years of the greatest prosperity of the business jet fleet in Ukraine, it could not compare with the fleet in Russia and Kazakhstan. All business aviation professionals know this very well, so there is no point in talking about it for a long time.

The point is that all these PEPs from the countries of the former USSR, with their irrepressible desires to own luxury aircraft and fly almost non-stop around the world, created the revolutionary growth of business aviation. Everyone made money from them - manufacturers of business jets, operators, handling companies, all kinds of legal companies that were supposed to give it all a certain decent appearance from the legal side. Pilot training and certification centers.

There were appeared also a lot of aircraft management companies that positioned themselves as auditors and sought to earn their margin by telling aircraft owners about “how you are being robbed by operators and handlers. We will help you save 30-50-70 percent!” And so on and so forth…

Precisely because there were customers who created this whole “Vanity Fair” and were accustomed to react positively to outright show-offs, business aviation market participants spent huge sums on participating in EBACE. Show-offs at that time became Extra value.

But most importantly, being the main business aviation exhibition in Europe, EBACE gave the market participant the opportunity to actually MEET such customers right at the exhibition, get acquainted and conclude a profitable contract. Those who even then did not want to be featured at the exhibition sent their emissaries to it. Concluding a contract for the sale, aircraft management or servicing of some BBJ with those about whom you knew nothing at all yesterday and met only at the exhibition was absolutely real!

Now, after Russia started the most brutal war of the last century in Ukraine and the subsequent sanctions against many oligarchs and PEPs close to the Kremlin, all these potential customers are only concerned with how to protect their “honestly acquired” from the long hands of the American and European regulators.

In Ukraine, the situation changed even before the large-scale Russian invasion began. Firstly, the so-called “elite” has changed. Yanukovych and all his associates, who felt free to boast their jets and other attributes of a luxurious life, were forced to run away to Russia. And, if not completely abandon the habit of flying around the world in style and fanfare, then significantly moderate their appetites by flying from Moscow to Sochi, occupied Simferopol and a few Russian satellite countries.

In Kazakhstan, with the coming of the new president, there has also been a change in elites and many of those who previously swam in luxury and lived for the show are now forced to behave more modestly. It is now important for them to preserve what they have acquired and not to irritate the new authorities with yet another show-offs.

What part of the business aviation market was made up of the group of customers I described can be judged by how much the EBACE exhibition has decreased over at least the last 3 years. Previously, exhibition visitors complained that there was no place for meetings at the exhibition if you did not have your own stand and asked the organizers not to be greedy and allocate a place for networking. This year, there was much more free space to sit at a table and hold a meeting without standing up than there were people willing to do so.

The organizers did everything possible to ensure that the excess of exhibition spaces was not too noticeable. To do this, they used two tricks: they significantly widened the passages between the stands, and also separated part of the empty space with massive black curtains. These little tricks slightly improved the visual perception of the exhibition. However, for those who attend it year after year, the exhibition's regression was obvious. 

The problems with EBACE became even more obvious at the static display.

A number of business jet manufacturers, who previously sent their aircraft to be shown to the public year after year, simply refused to do so this year, not seeing any prospects in it. As they say, there was no one to look at it. And no “curtain” will correct the situation.

However, is only the reason I indicated, objective and independent of the organizers, the result of a drop in interest in the exhibition? I think it would not be out of place to mention the second, purely subjective, reason here.

Market participants have told the organizers of the exhibition, the functionaries of the European Business Aviation Association, that the old format has become obsolete many times over the past years. However, all these criticisms were presented in a very delicate manner. And, as practice has shown, EBAA reacts to anything critical only after they, what you call, “sink to the very bottom but be knocked down”...

The EBAA only responds to “direct actions”. For example, this year we could read a large number of PR materials that talk about the contribution that EBAA make to decarbonization of aviation. About how important this issue is for the association. In order for the EBAA to pay attention to the problem, at the 2023 show crazy eco-activists had to overcome the security system of the Geneva airport, enter the apron and pour paint on one of the exhibited aircraft. 

And after that, instead of telling these so-called “eco-activists”: “Try, morons, stop cargo aviation, which consumes a hundred times more jet fuel! Let’s see what happens to the economy around the world then!” EBAA management hypocritically talks about the importance of this issue for world peace. Although they don’t care about the problem of decarbonization as much as they care about everything else that is not related to making a profit for this “non-profit organization” itself...

Well, this time such a “direct action” was the non-participation of a large number of former regular exhibitors. Relatively speaking, the organizers of the exhibition “were knocked down.” This is what is called "voting with your wallet". And the number of posts on the Internet from authoritative participants of the aviation market with direct, without equivocation, calls for the need to change the concept, change the location, change approaches, has become avalanche-like.

We will see next year whether EBAA listen to market participants and whether they are able to do something that will revive the former popularity of EBACE. Personally, after communicating with one well-known representative of EBAA, I have very little optimism. An attempt to explain to him the need to promote professional values ​​ended on my part after he said: “It’s not my business. I'm a “membership guy”.

When I asked if I could publicly reflect his position in my article, this “membership guy” answered very negatively. He loves to tell others how to present themselves, how to speak, how to smile. I certainly saw all these skills he acquired from his side in our conversation. Numerous coaches, whom he likes to talk about in his posts, did their job. However, you cannot instill values ​​and intelligence in a person. I got the impression that he doesn’t care which association he works for - be it the EBAA or the Association of Christmas Tree Toy Manufacturers. The main thing is that “clients” pay the membership fee and do not ask awkward questions.

Well, there is a saying: “Vacancy is a chance to take at first glance.” I am sure that if EBAA next year tries to proceed the same way as it is, without changing anything in the EBACE concept, then after this, business aviation market participants will definitely find a better “event agency” for themselves. And they will do it quickly and efficiently.