Aerospace manufacturers must start to deliver on the promises they make and governments have to be bolder in their policy-making in order for the $800 billion global aviation industry to attract new investors.
That is the belief of Roei Ganzarski, chief executive of electric planemaker magniX, who thinks that much more needs to be done to make aerospace investment mainstream.
Speaking at the Global Investments in Aviation Summit in Dubai this month, Ganzarski said that original equipment manufacturers (OEMs) must make good on the timescales they set out for new products.
MagniX made headlines in December after it flew the first all-electric commercial flight in Canada.
Ganzarski said: “If you look at most OEMs, they’ll say something, and then deliver a year, two, three, four years later.
“We can explain that aerospace is complex, aerospace is difficult, but at the end of the day, investors want to know that they’re investing in a company that stands behind its promises. So we have to stop overpromising and under-delivering.
“And if we do that and investors think about long-term then aviation will become an [attractive] investment.”
He said that there is a “new breed” of disruptive OEMs that are beginning to cater for the new type of investors in the market.
“Current OEMs are happy in their position, no different to how Kodak was with film. ‘Nobody’s going to replace film’, people thought, until Kodak disappeared, and it wasn’t Kodak that came up with new digital camera.
“We’re seeing it now with air taxis, urban mobility and traditional fixed-wing aircraft. We saw recently that Toyota, a car company, made one of the largest investments in urban air mobility ever.
“I think we’re going to start seeing non-traditional investors in new technology. It will be people from the outside who look at aircraft differently.”
But Ganzarski also things that the responsibility lies with governments to incentivise investment and accelerate development in aerospace.
Using the example of batteries, upon which magniX relies, Ganzarski said that the technology is lacking because of an absence of ample investment.
“If you look at electric cars eight years ago, there were no batteries powerful enough. Tesla said: ‘That’s OK, we’ll start anyway’. They started with a small two-passenger car that could go 80 miles. Today, because battery companies saw good investment in that, they now offer batteries to electric cars that can take seven passengers 400 miles.
“The same will happen with aircraft. If I was a battery company, I wouldn’t have invested in electric planes because there were no electric planes. Now there are. Electric planes made the first commercial flight in December and other companies are following suit.”
Ganzarski believes that certain countries have set a good example to other governments when it comes to incentivising investment in aerospace technology.
“I implore from an investor’s perspective, countries who’ve actually taken a proactive step and passed law, in Norway for example, that by 2040 all domestic flights will be electric.
“Do they have the infrastructure and aircraft to do it yet? No. But imagine what that does to investment in that country for electric aircraft. Because it’s law, everybody is going to invest. Airports are all looking at how they can be ready because it’s the law.
“Governments have really taken the next level of encouraging investment by saying the capital markets will allow it to happen if we encourage it. One government could say we’ll encourage them with tax incentives or penalise them, Norway just said we’re going to pass a law – so solve the problem.
“And they will solve the problem. If other places do similar things, the open market will solve the problem, but it has to have that incentive to do so.”