Challenge #6: Investing in innovation
It is well known that flight innovation starts with general and business aviation before it expands to the commercial airline market. As the drive to make aviation more sustainable increases, in particular a desire to find alternative fuel and power sources, new technology development in the aviation sector is at an all-time high.
Investment into new aircraft technology is also becoming an alternative to ‘carbon offset’; EasyJet announced in September 2022 it will end its carbon offsetting scheme to focus on investing in new technologies to cut emissions. However, investment has both risk and opportunity as news outlet Flight Global notes:
“Whoever masters these new technologies stands to reap the financial rewards; on the flip side, however, the companies or countries that specialise in disciplines which stand to be fundamentally changed are in danger of losing their leadership position.”
As an example, in March 2022, the Aerospace Technology Institute concluded the UK’s specialisms – airframes, wings, fuel systems, thermal management, and turbine engines – are among those likely to be most affected by a potential switch to liquid hydrogen as a fuel. “All these elements would need to be redesigned for a hydrogen aircraft, presenting the UK with both a threat and an opportunity,” it says. “If the UK acts ahead or alongside other nations, it can lead the development of new technologies where it is currently strong and secure a greater share of activity.”
Another challenge facing both investors and investees is time. Before any new technology can be used it must go through rigorous testing and normally achieve three core aviation regulatory approvals: type certification, production certification, and operational authorities. Testing and certification processes take time and government regulators are not working to the same timescales as investors wanting to make a return, or the technology companies needing continued investment.
Perhaps a more short term challenge to new investments in technology will be a looming recession, enhanced video communications, and remote working. The desire to get back to face to face meetings during 2022 may fade during 2023 as the past few years have shown how 1-2-1 communications could operate differently. The underlying goal of people using business aviation tools is communication, relationships, and experiences. Starlink – and some other new technologies that are not primetime today could deliver at least communication and relationships with quicker return on investment. Could business aviation face its own ‘Kodak’ moment?
Flying cars, hydrogen propulsion engines and pilotless aircraft are all possibilities for the future of aviation. A challenge for 2023 will be to show delivery on the investment for the near-term future while continuing development of aviation technology for the long-term future.
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