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Molly McMillin: Hello everyone, and thank you for joining us today for the BCA Podcast at Aviation Week. I'm Molly McMillin, managing editor for business aviation. Today's podcast will focus on the Part 135 charter business, the market challenges and changes. I'm delighted to have with us today Glenn Hogben, who is CEO of the Air Charter Association, and Viviana Kozin, who is chief operating officer for George J. Priester Aviation. And you're based outside Chicago?
Viviana Kozin: I am.
Molly McMillin: So thank you. Thank you for being here.
Glenn Hogben: Hi Molly. Thank you very much for inviting us.
Molly McMillin: So Viviana, why don't we start with you on tell us how long have you been in the charter industry and what's the state of the market today?
Viviana Kozin: I've been with Priester Aviation, George J. Priester Aviation, now for 20 years. So I've seen a lot of different facets of our business and how it's evolved and grown. But the state of the charter industry right now, it's positive. The market's good, the market's softened. Obviously it's softened since COVID and prices have come down. Prices have come down, but costs have gone up for operators, so it's not really getting cheaper to operate in our environment. The challenge is being able to keep healthy margins and still provide a great quality of service to our end users.
Molly McMillin: Okay. And Glenn, how would you describe what you're seeing in the market today?
Glenn Hogben: Yeah, so my background is mainly on air charter broking side, and then I took up this role, which is more of an overview of the whole industry about four years ago. And I think from discussions with our members across the world, we've got, I think the industry's quite positive. I think businesses are still showing growth and resilience. There's lots of changing client needs and there's global economic challenges that keep coming into impact the industry. But a lot of it is continuing on a normal sort of cycle. The industry is used to responding and reacting and being dynamic to changes in the market.
Molly McMillin: Would you say it's gone back to normal after post COVID? I think weren't there a lot of customers coming in and has it normalized now or how would you describe that?
Glenn Hogben: Yeah, we do talk, there's a lot of conversations around the industry about the normalization and lots of comparisons between where we are now in 2024, 2025 and pre-pandemic 2019, 2020. I think the numbers indicate that things have settled down now and people have worked out what the new normal levels are. We're not seeing the huge volatility that we did see during that pandemic and post-pandemic period. So yeah, I think for want of a better way of saying yes, we've reached new normal, we still have fluctuations from seasons, from global events, those things are norm for us. And so there's always a little bit of volatility, but not nowhere near on the levels that we saw during the pandemic and post.
Molly McMillin: Now Viviana, have you seen any changes in your customer base? I know at the conference last month there was some talk that it kind of moved from corporate to leisure or what are you seeing in your customers?
Viviana Kozin: There's still a good mix out there. Obviously after COVID you had a lot of individual owners or a lot of individuals want to purchase aircraft, so that seemed to level out over the last few years. Some of those owners who have entered into the markets are now maybe their charter customers. Again, maybe just owning an aircraft wasn't the right option for them at the time. So yeah, there's, it's a good balance between leisure and business. Travel is still doing quite a bit of that with all of our partners in the industry.
Molly McMillin: Glenn, how about you from your seat? What are you seeing?
Glenn Hogben: Well, I think business jet charters continues to attract corporate and leisure, leisure travelers. It delivers that connectivity, safety, efficiency and flexible scheduling, which are all key drivers for people using business aviation. We also look after sort of the larger commercial aircraft and cargo commercial aircraft to still allowing larger groups to travel together on route where scheduled services haven't returned. After the pandemic changes in the schedule service market cargo demand still remains strong for responding to global events, delivering the adaptable solutions to move cargo around the world. So yeah, I think the sector's demonstrated its value and that it's indispensable for that, the more urgent requirements or specialized flights that people need to do.
Molly McMillin: Let's talk about challenges. I know at the conference there were conference conference, we had a conversation about the various challenges in the industry. And what would you say for both of you, your top challenges?
Viviana Kozin: For GJP? One of the challenges that I think affects a lot of people, a lot of other operators in the industry is operator reliability. We rely heavily on our maintenance providers, our MROs, part suppliers, everybody that's doing a job to service our aircraft. It's challenging because while we've put in a lot of effort to develop these relationships with all the individual partners, we're seeing struggles on their end too. Qualified mechanics are an issue, them not having enough hours, enough labor hours for the team, you don't have enough experience on the floor that you had in the past. So that's impacting our owners in ways that unfortunately can impact them and triple the downtime for the aircraft. Recently we had an aircraft that was scheduled for a four day turnaround and it actually took 12 days, so it wasn't promised for the four days. And in that time, the owner ended up having to charter not once, but twice. So now he's tripled his costs for maintenance and then cost to actually charter another aircraft. So the part that we struggle with is that this is not on the maintenance facility, this is on the management company because we've partnered with those facilities and we promised work and the dispatch reliability. It's a huge piece of our business today.
Molly McMillin: Interesting. Wow. Glenn, what are you seeing as,
Glenn Hogben: Yeah, I mean, I'd echo a couple of things that Viviana picked out there. The sort of talent shortages in certain areas of the industry. The engineering side is always sort of recruiting and I think recently is having those shortages. Supplier parts is sort of magnifying that, but that doesn't just affect the engineering side. It's also there's a growing concern over pilot shortages in the coming years. In the future, it's slightly looking slightly further ahead, but that is a real challenge. But there is quite a lot of work the industry's doing to try and improve that, to try and get more trainee pilots and cadet schemes so that there is a solution potentially for that. But there may be a gap between that solution really coming into effect. So there's some future concerns there. I think balancing demand with capacity is always an ongoing challenge for the industry.
For the moment, I think the cargo industry would look and say that they've got too much cargo capacity for the level of the demand. Although the demand is still good because there's been that it takes so long for a new aircraft to be delivered or an aircraft to be reconfigured and moved into that environment. The delivery times are a little bit longer, so therefore by the time the aircraft capacity arrives so the demand can have changed. So there are loads of challenges around that. I think the regulatory environment, tariffs and taxation is a big concern around the industry. Lots of, some of it is at their level of uncertainty and markets. Others, it's where taxation is specific on travel mostly that it doesn't affect the U.S. market thankfully at the moment. But certainly in Europe we're seeing quite a lot of concerns around that. I think again, in Europe, the growing public, there's a public perception for the industry, which is not as positive as over in the U.S.
Some people view business aviation as very much just purely a luxury commodity, whereas they don't see the real intrinsic business requirements of people moving and the fact that it enables business, it enables investment and enables financial growth in countries. So there's those elements. And the last one for me, I think, I'm not wanting to hog the microphone all the time, but there is this huge drive in the industry towards new technology that's going on in the background. It it's sort of fitting around the sustainability area, loads of work going on in sustainability for now what we can do to reduce the emissions and be more sustainable. But actually the technology investment that the industry is going into, what's happening next? And we're talking 10, 15, 20 years down the line, there's huge amounts of work going on in that area as well.
Molly McMillin: Viviana, in the technology area, how are you at Priester addressing that or what are your long-term views on that? There's a lot
Viviana Kozin: Of positive, obviously feedback right now in the industry around technology and how it can help. For example, it can pair up some one ways. So the technology's out there now for the different marketplaces when we're trying to satisfy maybe an owner trip that they don't need a round trip aircraft. So it's good in those ways. Technology though, it's, it's also impacting our business. So it's definitely going to improve efficiency. It can drive some prices down. But on the flip side of that, at the same time, so the technology, it's not reflective of all the effort that goes in on the operator side of the business because there's so much that actually makes up what we do as an organization. I mean, I think a lot of operators would agree that technology is only a piece of it in terms of how it's going to improve ways in which we can seek new opportunities within the industry. But customers I think are thinking that we're already too expensive when we have a service that we're trying to provide. So technology in a way can also disrupt everything that we've worked so hard to gain.
Glenn Hogben: I was going to say that's a really good point in that a lot of the technology is sort of out of the hands of the people on the ground at the moment. So the operators, the brokers, the people that are working with clients, you can't push technology to be quicker. It's a highly regulated industry. It's in the hands of the manufacturers for a majority of the future solutions, and that's going to take time to get there.
Molly McMillin: So you mentioned prices are for customers. Do they want to book their flights on an app and are they checking around for the lowest price? Or what are you finding there when it comes to that?
Viviana Kozin: You're not wrong. I think everyone's really liking the technology piece, the ease of use going on an app and being able to search what flights are available. GJP, we really pride ourselves in the relationship side of the business. So picking up the phone call and talking to somebody on the other end, it's a more comforting feeling, I think, for the end user because nowadays you're not sure what's a scam, what's real, what's fraud out there? I mean, there's a lot of different platforms just even in the social media side. So I think there's a little bit of hesitancy sometimes when you're making a big purchase like that, especially in charter. I don't know that I would be comfortable booking it on an app. I mean, there's some younger individuals out there who are okay with that. That's their mindset and I get it. But just the one thing about technology, it's trying to use predictability and certainty to make some of these operations more efficient in our industry, but it really doesn't lend itself to the predictability. We got to make sure that we're lending ourselves to the flexibility side.
Molly McMillin: You mentioned there are scams out there, which kind of leads to the illegal charter, gray charter. How prevalent is that and what are you finding?
Viviana Kozin: It's growing, the illegal charter side of the business, the 134 and a half market. It makes it challenging for us as operators because they're putting their clients at risk, and some of this stuff is going unnoticed. As an operator, we want to work with quality partners, partners that we end up vetting from the crew, the maintenance, the insurance side, et cetera. So the end user is thinking they're receiving all that high quality service, but they could be working with a gentleman in the basement of their house who unfortunately when things go awry, they're not going to be there in the depths with them trying to recover and find them a suitable option. The suitable option is going to be two or three times what they paid for that great price. So now that's the disadvantage because end users are thinking they're getting that high quality service, but they're not. So they're being left with the impression that I'm getting a great price and it's putting, everything that we do as operators, which is expensive to do because we invest in the resources in our company. So it just makes it very challenging and it really gives 'em a skewed perception on business aviation and the charter world.
Molly McMillin: Glenn, what are your thoughts?
Glenn Hogben: Yeah, it's a very difficult question to answer. Many of the flights, as Viviana mentioned, don't get reported or identified. It's really difficult to find these flights which are flying slightly under the radar. Literally the aviation authority inspectors need to identify the case, and a lot of that comes down from third party reporting to, or organizations like ourselves. We do get reports, so we know that illegal operations do happen. But I suppose the good news part is that because we know there's a low level of accidents involving illegal flights that are proven afterwards, that we know the level should be really quite small as a comparison to the size of the industry, the number of flights happening. Our biggest goal from an association, industry association point of view is to raise awareness, educate all of the different parties of the potential risks there. There's some really key examples out there.
The Premiership footballer, Emiliano Sala who unfortunately died in one of these illegal flights and a crash in 2019. We use the anniversary of that to highlight that across the industry on the 21st of January. Every day we've designated that fly legal day on an annual basis, and we work with authorities and other associations around the world to really highlight the issues and the risks involved in taking flights that are not fully licensed or fully qualified. So yeah, it's an industry issue that we're aware, well aware of that does happen, but I think most people in the industry are pulling together to try and minimize it and stop it wherever possible.
Molly McMillin: And when we spoke before, you mentioned that some people don't even realize that they're crossing a line that sometimes it's kind of unintended. Can you talk about that a little bit?
Glenn Hogben: Yeah. It's at the end of the day, it's these type of flights are where you're using a privately registered aircraft with a privately licensed pilot. But as soon as there is some form of commercial transaction, which means some form of reward that passes between the pilot and the passengers, that becomes a commercial operation, which immediately makes it illegal. And some people often refer to these as gray charters. We don't like that definition because gray suggests that it might be okay, or it might not be. It's a bit iffy, but actually it's very much illegal straight away. But there are circumstances where people accidentally get into that situation where the passengers just sort of offering some money to the pilot to say, thank you for the flights, or anything along those lines. And they can accidentally tip into this world. The real issue for the industry are the ones that are deliberately going out there to do it though, and that's what we work hard to prevent.
At the end of the day. We have a few bits of advice. One of them is use it, try and use a professional broker who's qualified and who knows how to advise the client. If they're not familiar with industry. It's a complicated process. Chartering aircraft operators will support you through it, but a broker can give you the market overview and the time to give you that advice. Then it's check it. You've got to check all of the documentation, check the licenses, check the AOCs using reputable operators like GJP and those type of larger operators that have got the verification behind them, that gives you that security and confidence that you're not going to be falling into problems. And then there is that element of you've got to sort of think twice. You've got to make sure that if it sounds too good, if it's so much cheaper than the market price, that's a good indication that there's something wrong. So yeah, that's how I'd sum out. If
Molly McMillin: If it's too good to be true. It probably is, right.
Glenn Hogben: Absolutely. Yeah.
Molly McMillin: Any last thoughts on the industry and your part of the charter world?
Viviana Kozin: It was a pleasure to speak today on today's podcast. And Glenn, I just really want to say I really appreciate everything the Air Charter Association is doing for the community and raising awareness between operators and brokers. I think that's a really important foundation for our business to grow. So thank you. Thank you for all your efforts.
Glenn Hogben: Thank you very much. Viviana here. I completely agree. Just thank you for inviting us, Molly. It's been great to speak to. Hope your listeners find this podcast quite useful.
Molly McMillin: Thank you. Thank you both. Thanks for Viviana, and thank you, Glenn. We really appreciate it.
Viviana Kozin: Thanks, Molly.
Jeremy Kariuki: Thanks for listening to the BCA podcast by Aviation Week Network. This week's episode was produced by Jeremy Kariuki. If you enjoyed the show, don't forget to subscribe or follow us on your podcast app of choice. If you'd like to support us, please leave a rating wherever you listen. Thanks again, and we'll see you next time.
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