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Luxaviation CEO shares market insights
At EBACE, Luxaviation UK CEO George Galanopoulos talks pre-owned prices, San Marino, the rise of younger aircraft buyers, eVTOLs, intelligence automation and empty legs.
Luxaviation UK CEO George Galanopoulos.
Read this story in our June 2024 printed issue.

"It's a great time to buy a used aircraft," says Galanopoulos. "After talking to various brokers and ex-brokers, I would say prices have stabilised from the craziness of 2022 when there were rising steeply and, if anything, they have dropped for some aircraft types. On the small jets we’ve seen a stabilising of prices, and there is certainly more stock coming to the market. Just one year ago there were 12 Challenger 600 series aircraft on the market, now there are 26. That doesn’t mean the prices are dropping just yet, but I think as we come out of this high interest rate environment and as we come down on uncertainty around the world, I think prices will go back up again.

"So we advise customers that now is a good time to buy used aircraft. OEM order books are for two years ahead and that puts a lot of people off. Customers don’t want to wait. If someone's looking for a new Global 6000 or 7500, they want it now. But a few years ago there would have been a four to five year wait so things are improving, and that helps with the used aircraft market.

"We have a mixture of clients, some want an aircraft managed for their own use. And they like the San Marino register, T7. It's becoming very popular because it is straight forward, friendly and quick. It's not the cheapest, but the cost of registering and getting the certificate and all the approvals is very small compared to cost of aircraft. San Marino is ultra helpful, and they accept FAA, EASA and UK pilot licences. With the pilot market becoming problematic, San Marino is great because you can have any licence and they will validate it. It's the same with STCs and any modifications the aircraft has. San Marino is more likely to accept them than the EASA or the UK.

"The UK register is reducing quite a bit, as it has been since Brexit. So owners now take the view that if they want their aircraft chartered out, the UK is not necessarily the best option. You can’t do intraeuropean trips or in some cases you can but you need to give 48 hours notice. We are talking to the CAA about how to resolve this but it is more a political decision.

"I see a rise in the number of younger aircraft buyers. We had a flight full of You Tubers the other day, influencers who have an awful lot of money from social media. They are not shy to show that they fly, whereas the average business man doesn't want to be seen. They don’t necessarily fly, maybe just book the plane to take some photos, but it helps to spread the word about the industry and about its role in achieving sustainability. It helps spread the word about how much the aviation industry is doing to get to net zero.

"These influencers will also charter, especially empty legs, which we put out on social media. They are not at that level of wealth to buy aircraft, but they are influencing the younger generation, our future customers.

"And on the subject of the future, I think electric propulsion is a great initiative, although for me it's more of an interim solution. It's not entirely sustainable, and it is short range. eVTOLs may replace helicopters but they are never going to replace aircraft; they won't fly over the Atlantic on batteries, not in my lifetime. So I believe the ultimate goal is hydrogen. That’s the future. We may be decades away from that, but hydrogen is probably as sustainable as you are going to get.

"Another angle to sustainability is the growing integration of artificial intelligence. We have an IT team based in South Africa that is already working on solutions but the head of the department told me that IA is actually what they are working on, intelligent automation. It's slightly different to artificial intelligence because, as I understand it, AI needs a huge amount of historic data to achieve machine learning, to get the results you want. IA is a slightly different approach, and the whole idea is to automate as much as we can of our processes, starting with quoting.

"There has been much talk over the years about websites that claim to click and book, but they can't offer an exact price, for a number of reasons, but most importantly because there is so much that needs to happen behind the scenes for a booking to take place. There are so many variables behind a quote, and none of these platforms manage to take all these variables into account.

"For example, you could land in Milan at 8am on Thursday and there will be one landing fee, but land at 10am on Wednesday and it's a different fee. Prices change so quickly, so you need a huge amount of data to teach the computer to work out an exact price. And then you have to consider full crew availability, owner approval. We haven't seen a platform yet that can give an exact price, just an approximate one.

"More importantly, for sustainability, we must achieve cost effective and quicker routings. There are flight planning systems that give you the best route from A to B, but what none of them can do at the moment is take into account historic data. Say you want to go from London to Athens, there are a few different ways to go depending on airspace closures etc. You can go by Germany or south of Italy, which will vary by a few minutes here and there, but you can file a route and then the controller could advise going direct due to winds or traffic, but you have already filed your longer route and you've wasted a lot of time. So what IA can do is take years and years of data and work out what actually happens from London to Athens in terms of historical weather, winds and airspace closures etc and give you the most efficient route in terms of fuel and emissions.

"Then there are the dead legs, the counter positioning. All of us operators have been looking for a solution for years. The price of the empty leg comes down to probabilities; what are my chances of being able to sell the way back? A computer is going to be able to calculate all the probabilities involved and allow you to adjust your price for accuracy for the return leg.

"It's all about collecting data, and it will change our lives. Selling empty legs is profitable; flying an aircraft with no passengers is the biggest waste of money and emissions.

"In the meantime, back to buying aircraft, and clients seem to want larger cabin, longer haul models; the world is becoming smaller and people want to fly further. Last year saw the biggest drop in demand for long haul charter. The mid size aircraft, the Citation Excels and the Hawkers, were more stable because there were more movements in Europe or from Europe to the Middle East. Owners looking to buy an aircraft want transatlantic capability, so the smallest you would get is a Praetor 600 or a Challenger 650, which are the smallest for London to New York without a stop. Business is moving out to Asia, so you need to have longer range aircraft like Globals and Gulfstreams, and India has become very popular. We are hoping to bring some more aircraft on over the rest of the year."

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