Artificial Intelligence

The imbroglio was laid out before the court as the defendant, a US attorney said “God, I wish I hadn’t done it”. An onlooker from the gallery let out a soft, descending whistle.

Many of us have regrets in life, but this one is a biggie. It is the case of one attorney who used Chat GPT to write his client’s legal suit against an airline for an accident claim. Chat GBT even created fake judicial opinions and legal citations. The case was heard in June 2023 in a Manhattan court room which was packed with lawyers, law students and professors. The New York times reported “There were gasps, giggles and sighs. Spectators grimaced, darted their eyes around, chewed on pens.”

2023 saw the emergence of generative AI. While AI has be around in the background for a few years, the release of OpenAI and Chat GPT in November 2022 has seen businesses across the globe compete to integrate similar systems to speed up work, create efficiencies and use as a research tool. Many articles are now drafted (initially anyway) using AI to speed up content creation. Whichever way it is being used, it has raised questions amongst administrative professionals: will I be replaced by a machine?

The answer to this has been mixed so far. Situations such as the legal farce noted above strengthen the argument of many professionals who believe their work is simply too complex to be performed by a machine. Further, many professionals state that for complex activities, people will always want the personal attention of experts. However, a report in the Financial Times, neatly points out that this ignores the base need of the client: “to claim clients want expert, trusted advisers is to confuse process and outcome. Patients do not want doctors, they want good health. Clients do not want litigators, they want to avoid pitfalls in the first place. People want trustworthy solutions, whether they rely on flesh-and-blood professionals or AI.”

Whichever way you see the argument, we will continue to watch the development of AI in the years to come. Boardrooms are sure to be in full debate mode to avoid their Kodak moment. In the meantime, and at least during 2024, let us make sure we know the answer to the question we are asking Chat GPT before we use it!

Climate and the environment

“2023 has shattered climate records, accompanied by extreme weather which has left a trail of devastation and despair” is the statement from The World Meteorological Organisation (WMO) made in advance of COP28 (Dubai, December 2023). Statements made at COP28 echo this warning, noting that greenhouse gas emissions causing the Earth to heat up are still rising and they must be nearly halved in the next seven years. This is notwithstanding the current worldwide efforts to prevent climate change.

The aviation industry has been under continuous attack during 2023 for its environmental impact, in particular business aviation. The industry has not just been under fire in the media, environmental protestors have disrupted business aviation conferences, broken into airports and damaged private aircraft to highlight their cause. Extinction Rebellion, who attempted to block entry to Farnborough Airport by protest in November 2023, state that “private aviation significantly contributes to climate change due to its high carbon emissions. Flying in a private jet is the most inefficient and most carbon-intensive mode of transport”.

Numerous initiatives to respond and educate the wider public about the environmental impact of business aviation have started as a result. Climbing Fast was launched by the NBAA during NBAABACE in October 2023. Its purpose is to set the record straight on the industry’s societal benefits and leadership role in sustainability. NBAA President and CEO, Ed Bolen stated “our industry has long made an ambitious commitment to sustainability, with measurable results. Our new initiative will take this message to policymakers, opinion leaders and other key audiences, informing perceptions about the industry’s sustainability record and value.” A month later, at CJI Miami 2023, Bolen warned the mission to net zero is not just an NBAA and business aviation mission – it is an aviation worldwide mission and requires everyone in the industry to come together to act in a way that is sustainable and to create energy independence.

As 2023 draws to a close, Bolen’s message that the industry as a whole will need to pull together to achieve carbon neutrality, would appear to be falling on deaf ears. 2023 saw several international airports making headlines with proposals to ban business aircraft. The commercial aviation industry remains focused on its own battles following the pandemic; it is looking at business aviation to fund SAF development while demanding subsidies for its own use. Hopefully 2024 will see a year where the industry starts to combine forces for the good of aviation and indeed the planet.

Geo-politics

May we live in interesting times. You would be forgiven for thinking a bit of boring would be a refreshing change. Many entered 2023 hoping for greater political stability and an end to the war in Ukraine. Rather the year has witnessed a new war in the Middle East, several far-right politicians elected as new leaders, and several countries increasing diplomatic ties with countries outside of the typical capitalist west.

“While America promotes war, China promotes peace. While China promotes trade, America imposes economic sanctions.” These are some of the messages coming from China (as reported by the Financial Times) who have spent 2023 increasing their economic ties and friendships with Brazil, the Middle East, Russia and parts of Europe. Elsewhere, Russia is strengthening ties with African and Asian regions following the sanctions placed on it in 2022, and BRICS invited Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates into its alliance..

Meanwhile in the West, Europe is becoming an environmental and regulatory battlefield, and the UK is struggling with the ramifications of Brexit, the revelations and accusations of the enquiry into the Governments actions during Covid and political fighting and infighting. Across the Atlantic, the US is showing the world just how toxic modern politics can get. The last 12 months has provided the world with a snapshot of the turmoil the US elections will bring in 2024.

The news during the year has provided us with continuous updates of the latest disaster, scandal or horror that has happened. If we were to believe everything that we have read it’s likely we all face certain doom as a result. Fingers crossed that 2024 will be a bit boring. Or at least not as eventful!

Price mayhem

2023 was witness to the impact of the previous year’s political turmoil with rocketing inflation and interest rates. While general inflation has now started to reduce, the price of every day goods has not. For example, in the UK, a kilo of white sugar costs 51% more than it did last year, with prices rising from 77p to £1.16. Across Europe the basic cost of eggs has risen by an average of 30% over 12 months, and in the US bread has risen by 7.1%. However, the biggest concern for many is the severe increase in interest on mortgage repayments; in the UK alone this has meant the average monthly repayment has increased by a shocking 61%.

In business aviation it is estimated that the cost of owning and operating an aircraft has risen by 35% in just 12 months. Most of this increase is due to crew wage rises, however fuel, supply chain issues and dispatch reliability all factor in. For those working to service business aircraft and aviation, the cost of labour and related challenges have remained the largest risk to business (retaining talent is the biggest worry).

The economy and its impact on the aviation industry was a depressing talking point at CJI Miami 2023. It was noted that finance transactions are down 40% year on year. Capital is simply less available and financiers are having to look at alternative options to the traditional loan/security model. In Europe the story is also an unhappy one with many financiers now under pressure to avoid business aircraft deals due to environmental and related reputational concerns.

Suppliers have also felt the pain. The inflationary environment has increased the cost of labour and services; in turn margins have been reduced and businesses are likely to fail unless they raise prices. This is a triple whammy for many in the business aviation supply chain who are still trying to recover from the pandemic and the impact of Russian sanctions on sourcing raw materials.

While many feel the problems will ease and the economy will recover, it is generally agreed that interest rates will remain high for the next 3 to 5 years. The advice; plan your business strategy and capital around economic realities, or face an uncertain future

Going electric…

Another year, another plethora of announcements about advancements, investments and the future of aviation as we know it. In June Volocopter announced it will operate connection routes and tourist flights for the 2024 Paris Olympics; in December it revealed the successful completion of a multi-day flight test campaign between cities in Japan, in preparation for the 2025 World Exposition. Close by, EHang was issued with a type certificate by the Chinese CAA – the world’s first type certification of an eVTOL aircraft.

So all looking good? While progress is certainly being made, many have been cautious regarding the speed of technological advancements in the eVTOL market versus the speed it will take regulators to approve the aircraft for passenger use. Both EASA and the FAA are being pursued for initial type certification, however, as AIN reported “both agencies have made it clear that reaching their high bars for safety will trump any promises made to investors when it comes to entry into service.”

Perhaps in reaction to the reality of the timescales involved in bringing eVTOL aircraft to market, Rolls Royce announced its plans to sell its electric flight division in November 2023. Rolls Royce’s new chief executive, Tufan Erginbilgiç, made the announcement as part of a wider restructure of the overall business. Erginbilgiç noted the strategy would be to focus on its core jet engine and engineering activities rather than electric technology that is increasingly focused on shorter journeys.

Conclusion

Business aviation looks to be reaching a new normal, whereby it has to adapt quicker than ever to political and environmental tensions, new technologies and an unpredictable economy. Many had hoped for a more stable 2023 but that was not to be.

At Martyn Fiddler Aviation, our conclusion is that we must expect the unexpected. We can only face the future if we have a flexible (rather than fixed) mindset.

Happy New Year!

If you want to see more from Martyn Fiddler, please follow us on linkedin: Martyn Fiddler