Viewpoint: Market Disruptions In Bizav - Navigating A New Normal

Before the COVID-19 pandemic, “black swan”-type market disruptions were spaced years apart. Seismic events, such as the bursting of the dot-com bubble in 2000 and the 2008 Global Financial Crisis, were sporadic and infrequent.

Today, this is no longer the case. Extreme shocks are not anomalies but part of the environment in which we operate.

From a global pandemic to Russia’s invasion of Ukraine, the conflict in Gaza, and the CrowdStrike outage grounding tens of thousands of flights, the world now lives in a continual state of systemic volatility. As a result, a new landscape has emerged in the global commodities market as each shock travels through global supply chains, energy markets, and transportation networks.

With its complex, geographically distributed operations and exposure to crude oil volatility, the business aviation sector is highly sensitive to these disruptions. Business aviation companies, particularly those with large fleets of aircraft or operations at multiple airports, must be prepared to adapt to this new reality.

The Price Of Stability

In this new period of constant disruption, “black swan” events impose costs that require careful mitigation. Jet fuel is particularly vulnerable. Any supply chain disruption that impacts crude oil supply chains usually drives up the cost of refined products, including jet fuel, avgas, lubricants, coolants, and other related products.

If there is an outage impacting refined products pipelines, alternative transportation, if available, will have higher transportation costs, resulting in increased expenses until the pipeline outage is resolved.

Major supply chain interruptions can also result in fuel becoming unavailable, leaving Fixed-Base Operators (FBOs) and airports without any product and grounding operations until alternatives are found. For example, in November 2025, a temporary supply constraint of Jet A-1 fuel at Cape Town International Airport disrupted operations of multiple airlines, leaving some planes grounded.

The vulnerabilities run deeper than fuel. Manufacturers of business aviation aircraft, engines, and components must be prepared for not only physical transportation disruptions but also tariffs and embargoes that can disrupt the supply of steel, aluminum, and rare earth minerals needed to manufacture airframes, aircraft components, and engines. 

Such events can also impact supplies of natural gas needed to operate the plants or generators supplying power to their plants. In the worst-case scenario, manufacturing operations can also shut down.

Capturing Potential Upside

On the flip side, “black swan” events can also present opportunities. For example, despite scheduling and operational challenges, large-scale outages of airline crew management, reservations, and flight management systems can create short-term demand for business aviation services. Senior business and luxury travelers still need to reach their destinations, and business aviation can offer a reliable alternative, enabling expansion of one’s customer base and increased aircraft utilization when commercial airlines fail.

Sometimes, such outages can even create long-term behavioural shifts. IT outages have been a driver in the growth of companies like JSX, which seek to offer an option that blends business and commercial travel. However, only companies prepared to respond quickly, with available aircraft, crews and logistics capacity, can capture this demand.

Operating In the New Normal

The systemic nature of these risks means those operating in the business aviation sector must rethink preparedness at every level.

First, fuel inventory policies need to adapt. FBOs and operators of large business aviation fleets should evaluate their fuel inventory policies to determine whether to have more stock on hand. Airports have limited tank capacity available, so they may also need to consider storing fuel at terminals away from the airport and securing access to transportation for the fuel from the terminal to the airport in the event of a disruption.

Second, parts and maintenance inventories must be evaluated. Events like the Suez Canal blockage demonstrated that it is not only fuel flows that can be halted overnight; losing access to essential items such as replacement tires, seals, engine components, and avionic components can ground aircraft until the parts become available. Aviation manufacturers consuming raw materials also need to rethink their inventory strategies, especially those involving rare earth metals. Resilient sourcing strategies and sufficient buffer stock are vital.   

Third, resilience requires information. Commodity Trading and Risk Management (CTRM) systems and other advanced information systems are critical. CTRM systems provide day-to-day support for operations involving commodities and are essential for effective hedging strategies and commodity cost management. However, when disruptive events occur, they become even more valuable by providing operators with the critical insights needed to evaluate market conditions, assess exposures, and determine potential mitigation options.

Finally, information must be paired with a strategy to effectively act upon mitigation options. In a crisis, those who can act quickly, shifting suppliers, reallocating aircraft, securing fuel, or locking in hedges, will minimize damage. Those who delay decisions will see mitigation options completely disappear as competitors move faster and the impacts of disruption spread.

Disruptions are here to stay. In a future with persistent volatility, those who are best prepared will perform most successfully. Firms must focus on building resilience into their operations, supply chains, and decision-making processes.

The cost of being prepared is modest compared to the consequences of being unprepared: higher costs, grounded fleets, lost customers and reputational damage. A new event is always just around the corner; it’s essential to have information systems and a strategy in place before the next shock occurs. 

Richard Murphy is vice president of product management at ION Commodities.