Phillips 66 will begin the conversion of its major petroleum refinery in the San Francisco area into one of the world’s largest renewable fuels facilities. Under discussion and consideration for nearly two years, the Rodeo Renewable project, named after the California town that is home to the refinery, will irreversibly modify the plant, rendering it unable to process crude oil in the future.
Plans call for the repurposing of existing equipment such as hydrocracking units and the construction of new pre-treatment units to enable renewable fuel production. The converted facility will leverage a flexible logistics infrastructure to accept feedstocks from local, domestic, and international sources.
The $850 million project received the green light from Contra Costa County earlier this month and is expected to begin commercial operations in the first quarter of 2024. Once fully operational, the production facility will process waste oils, fats, and greases to produce an initial 800 million gallons of renewable fuels a year. That includes sustainable aviation fuel.
“Rodeo Renewed stands to play a major role in helping us lower our carbon footprint as we continue to provide reliable, affordable energy,” explained Greg Garland, the fuel provider’s chairman and CEO. “This is a project that will help meet growing demand for lower-carbon fuels, preserve jobs, and support California in achieving its climate goals.”
AINsight: Timing Counts in Buying, Financing Bizjets
The market to buy and finance preowned business aircraft has ramped up to astonishing levels since the onslaught of the pandemic. Inventory has fallen to all-time lows while prices have increased to surprising heights. Brokers have purchaser-clients anxiously waiting in the wings for the right aircraft to become available. Other purchasers have raced to buy aircraft regardless of the aircraft’s age, condition, or pedigree.
Regrettably, certain seller teams have opportunistically used their strong position to force purchasers to reduce transaction deadlines, truncate or even eliminate aircraft inspections, and accept other burdensome contract terms. These seller tactics seem unfair, unnecessary, and disruptive.
Under market pressure and production quotas, lenders and lessors not only compete for willing borrowers or lessees but also for purchasers who intend to pay cash. Although cash deals have positive attributes, buying with cash is not risk or cost-free—cash carries an imputed cost of capital.
Still, financiers can timely perform by planning with their customers to move as quickly as possible. In a time crunch to buy an aircraft, purchasers may consider buying the aircraft with cash and then enter into a cash-out loan or a sale-leaseback (i.e. refinancing) thereafter.
Whether planning to acquire a business aircraft with cash or financing, the current market demands speed to succeed.
FBO operator Modern Aviation will expand its network with the purchase of California-based Superior Aviation Company’s (SACJet) trio of Sacramento-area facilities. Included in the deal—which is subject to regulatory approval and is expected to close by the third quarter—are the Capital Jet Center at Sacramento International Airport, Mather Jet Center at Mather Airport, and Executive Jet Center at Sacramento Executive Airport. Each are the lone service provider at their respective airports. Modern will retain all of the operational employees at the three locations.
“As the capital of California, Sacramento is a highly attractive, growing general aviation market, and these FBOs provide world-class service to a wide range of customers, including general aviation, business aviation, sports teams, and other VIP charters, military, cargo, and commercial airlines,” said Modern CEO Mark Carmen, who added that his company’s goal is to develop a national FBO network. “The opportunity to acquire SACJet’s three Sacramento FBOs and build upon their reputation for client service is another important milestone in executing our strategy.”
Modern Aviation, which was founded in 2018, announced in October that it was acquiring Sheltair’s five New York-area FBOs. When completed, this latest transaction will give the rapidly growing FBO chain its first foothold in the Golden State and bring its total number of facilities to 12 from coast-to-coast.
NBAA president and CEO Ed Bolen appealed to lawmakers to support collaborative efforts to draw new people into the aviation workforce, warning that a shortage could “destabilize operations.” In written testimony yesterday before the House subcommittee on innovation, entrepreneurship, and workforce development, Bolen noted that business and general aviation supports nearly 1.2 million jobs, with more than $240 billion in economic output and a favorable U.S. trade balance that reached $75 billion in 2018.
“However, for general aviation to continue growing and supporting communities, we must address the significant workforce challenges, including the growing shortage of pilots and technicians,” Bolen said, citing a need for nearly 100,000 new business aircraft pilots and 770,000 maintenance technicians globally through 2038.
“Although the pandemic has provided a momentary reprieve from the transportation workforce shortage, the demand for qualified workers is returning,” he said, and further reiterated concerns that women make up only 5 percent of the pilots and other underrepresented groups make up just 10 percent.
“As recovery and the worldwide demand for air travel continues to increase, we must come together and take bold actions that will enable the U.S. to maintain its role as the world leader in aviation,” Bolen said.
Turkish Aerospace Industries has ordered one special-mission super-midsize Cessna Citation Longitude and two midsize Latitudes from Textron Aviation for flight inspections, the Wichita-based OEM announced yesterday.
To be fitted with flight inspection calibration equipment, the three business jets will be used by the General Directorate of State Airports Authority (DHMI) in Turkey to inspect regional navigation aids. Beginning in 1993, DHMI used two Citation Vs for flight inspections, replacing them with Citation XLSs in 2009.
“Textron Aviation is honored to, once again, be selected as the aircraft of choice for the critical mission of ensuring the integrity of the airways that constitute the national airspace of Turkey,” said Textron Aviation v-p of special mission sales Bob Gibbs. “The Longitude and Latitude continue the long legacy of Cessna Citation flight inspection aircraft in service by the DHMI, while providing additional capability and performance for its missions.”
Baldwin Safety and Compliance is working with JumpSeat to integrate its real-time crowdsourcing app into the Baldwin flight risk assessment tool. JumpSeat introduced its app last year, enabling pilots to share and access operational information that may not be included in a notam. Since then, the app has accrued several thousand users, Baldwin said.
“The JumpSeat app caught our attention immediately and we recognized its value as another dimension to the risk-assessment process,” said Jason Starke, director of safety at Baldwin Safety and Compliance. “Now we can make it even easier for our clients to access local intelligence at their departure and destination airports from the Baldwin system to help make more informed decisions regarding risks associated with their trip. It is simple to use and as the user numbers go up, the more valuable it will become.”
The free app is designed to save crews time that could be spent researching multiple sources. Users can search by airport through a map and can select categories for reports such as ATC, runways, fuel, ground handling, scam, and weather, among others. The app includes a favorites section on the menu for quick access.
“Our goal was to keep this app simple and easy to use,” said JumpSeat co-founder Ben Zavadil. “We knew this would help crews avoid issues not reported in notams and it has exceeded expectations.”
Global business jet activity is up 23 percent month-to-date from last year and further is ahead of pre-pandemic levels in May 2019 by 9 percent, according to industry data provider WingX Advance’s weekly global market report.
North American sectors climbed 20 percent over 2019 levels, having already surpassed one million departures since the start of the year. Flights between New York and Florida increased over the same span in 2021 by 26 percent and are up over May 2019 by 81 percent. Flight hours also increased month-to-date, indicating longer-range flights are also recovering.
In Europe—excluding the Russia-Ukraine region, which saw an 80 percent year-over-year decrease in business jet traffic—departures are still well up over pre-Covid 2019 totals, with 16 percent more flights than in the first part of May 2019. The rest of the world is seeing a 7 percent increase in flights versus 2019, despite activity in China being 62 percent lower than in May 2019.
“Growth trends in flights compared to pre-pandemic seemed to stutter in April, but are surging in May, especially for business jet demand in the U.S.,” said WingX managing director Richard Koe. “Branded charter operations and private flight departments are both flying high, while corporate flight departments are seeing signs of recovery but still at modest levels.”
Blade Air Mobility posted 187 percent higher revenues in the first quarter versus a year ago, added 14 new organ transport clients, and saw passenger volumes substantially top pre-Covid levels. Revenues in the quarter grew to $26.6 million, up from $9.27 million in the first three months of last year.
However, net losses also expanded for the period, to $11 million versus $4.2 million from a year ago. Blade said much of the loss was fueled by increased general and administrative expenses due to organic growth, as well as one-off charges associated with recent acquisitions.
The revenue jump in the quarter was fueled by the near-tripling of MediMobility organ transport and BladeOne jet revenues, which totaled $22.1 million. That's up from $7.7 million in the same period last year. Short distance revenues also grew by 300 percent, to $4.2 million, much of it attributable to Blade’s acquisition of Helijet’s commuter routes in the Vancouver area. MediMobility revenue increases were attributable in part to Blade’s acquisition of Trinity Air Medical and stronger seasonal demand for BladeOne passenger service from New York to Florida.
Flight margins during the period decreased to 11 percent from 16 percent from the year-ago period. The company said the drop was driven in part by increased charges for Blade Airport ground transportation, which delivers passengers to heliport and airport flight ramps.
Photo of the Week
Rain or shine, the work must get done. Jianming Wu, a maintenance and engineering department quality manager at Business Aviation Asia, took shelter from the rain under a wing to snap this photo of a Gulfstream G550 being towed to a preflight position at China’s Shenzhen Bao’an International Airport. He reports that airport is typically pretty busy, as it serves both airline and business aircraft flights. Thanks for sharing this one, Jianming!
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