With the world economy running out of steam, the price of oil and other raw materials soaring, the stock market in a panic, and air transport criticised by politicians as one of the causes of global warming... the economic climate does not seem to be very favourable for business aviation. And yet... Brokers, business aviation companies and airfield managers all agree on one thing: 2007 was an exceptional year for on-demand air transport, and 2008 is unlikely to reverse this trend. \"Our sales jumped by 90 % last year. This trend is set to continue in the first half of 2008\", says Gilles M\u00e9nard, Managing Director France of Air Partner, one of the leading brokers on the Paris market. And he's not the only one!<\/p>\n
At the Paris Air Show in June 2007, NetJets Europe, the leading operator of business jets, revealed that in two years it had tripled the number of companies using its services in France, from thirty to more than one hundred. The group expects to double its turnover in France by the end of 2008.<\/p>\n
Ebace (European Business Aviation Convention & Exhibition), held in Geneva in May 2007, announced a 15 % increase in the number of visitors, reaching a record 11,300 participants. In his opening speech at the event, Brian Humphries, President of the European Business Aviation Association (EBAA), noted that the business aircraft fleet was continuing to grow significantly. From 2,000 units at the start of the decade, it reached some 2,800 aircraft in 2007, an increase of 40 %.<\/p>\n
So what is behind this excellent performance by business aviation? To a large extent, it's due to the democratisation of this type of transport. The launch of several formulas for acquiring business jets on a timeshare basis, thanks in particular to the American company NetJets, which has been present in Europe since 1996, has enabled many companies to benefit from a practical work tool at a lower cost. More recently, the launch of frequent flyer cards, which make an aircraft available for an annual quota of hours flown, has added to the appeal of business aviation.<\/p>\n
France, however, remains the most difficult to convince. Business aviation has long been a way of life for American and British companies. Not so in France. \"Our French contacts always ask us how much it's going to cost, whereas in the United States they're more likely to ask how much it's going to bring in,\" says \u00c9ric Peneau, Sales Manager at Europe Air Broker. \"People in France need to stop thinking of business aviation as something glamorous. Private jets used only to transport celebrities or wealthy billionaires are more myth than anything else. The myth is still alive and well in France. \u00c9ric Peneau recounts how a company CEO renting a business jet asked to land 40 km from his factory, even though it adjoined an airfield: \"The CEO explained to me that his arrival in a private jet would cause a riot among his employees if they saw him.<\/p>\n
However, the constraints of scheduled air transport since the strengthening of security measures speak in favour of private aviation. According to a study by the business airline Jetbird, the actual time spent on a door-to-door trip on a scheduled airline breaks down as follows: on average, 18 % of the trip is spent on transfers to the airport, 53 % on check-in and waiting time in the terminal and only 29 % on the flight itself!<\/p>\n
At Ebace, Marco Tullio Pellegrini, vice-president of research at the aircraft manufacturer Embraer, presented a most convincing example. For a trip between Zurich and Bremen, the business jet saved up to 2 hours 45 minutes compared with a scheduled airline. The absence of connections and transit times, and a ground waiting time reduced to ten minutes instead of an average of one hour at a major airport, explain this performance.<\/p>\n
For Gilles M\u00e9nard, CEO of Air Partner France, business aviation is and will remain the most appropriate means of transport for cross-border connections to and from secondary destinations. \"It is clear that, in the long term, aircraft will be less and less justified on long-distance routes, where competition from high-speed trains is the order of the day\", he predicts.<\/p>\n
According to a study by the Paris Chamber of Commerce and Industry, published in 2005, business aviation is used as a means of transport for business development missions in 40 % of cases. The destination of the flights is the company's premises, the sites of customers and suppliers, or trade fairs and conferences. Business incentive trips account for 5 % of activity. As a result, a number of major scheduled airlines have also embarked on the business aviation adventure. Air China is working in partnership with Skyjet International, a subsidiary of the aircraft manufacturer Bombardier. In Europe, Lufthansa and Swiss have entered the business jet market in partnership with Netjets Europe.<\/p>\n
Last year, Austrian Airlines joined forces with Jet Alliance to offer medium-haul flights from Vienna. It has been so successful that Lufthansa has decided to operate its own fleet of private jets from this year. \"We have gained market share among high-contribution travellers with such an offer,\" explains Thierry Antinori, Lufthansa's Vice President Marketing and Distribution. And, strangely enough, it is the point-to-point segment that accounts for the bulk of Lufthansa Private Jet's traffic, with a market share of 70 %, the remainder being accounted for by connecting passengers on scheduled long-haul routes.<\/p>\n
While everything seems to be going well for business aviation, it is nevertheless facing a number of challenges. Chief among these are the environmental issue and soaring oil prices. In the first instance, the media and political hype that has been directed at aviation for months now, naming it as one of the main contributors to greenhouse gas emissions - which contribute to global warming - is in turn casting a shadow over business aviation. For some time now, we have been described as a superfluous and even irresponsible means of transport that contributes to global warming\", said Brian Humphries, President of the EBAA, in his speech at the opening of Ebace 2007. No one, on the other hand, is pointing out that we are an important instrument of economic growth and that although business aviation also contributes to global warming, its impact remains minimal.\" According to the experts' calculations, aviation as a whole accounts for between 3 % and 5 % of all CO2 emissions. Within this range, business aviation itself accounts for only 1 % on average of all aviation emissions. \"In fact, our members have one of the youngest fleets in world air transport, applying the latest technologies in terms of reducing environmental pollution\", continues the EBAA President.<\/p>\n
However, the business aviation industry has got the message. \"On the subject of the environment, we are responding to our customers' concerns about limiting the impact of their travel. We now communicate the CO2 emissions generated by a trip,\" explains Gilles M\u00e9nard. We then offer our customers the chance to offset this ecological footprint by donating a financial equivalent to the Carbon Neutral Company, which invests in technological projects designed to reduce greenhouse gas emissions.<\/p>\n
The Air Partner offer comes into force this year. The average cost is \u20ac12 per tonne of CO2. Applied to a round trip to New York, which generates 2.56 tonnes of greenhouse gas emissions, the amount would therefore be \u20ac30.<\/p>\n
The second threat to business aviation, soaring oil prices, appears to be having little impact on demand. The price of a barrel of oil, which has been flirting with the $100 mark for several months now, is having only a limited effect on the fares charged by operators. \"Oil is only one component of total operating costs. The average increase in the price of a service is between 10 % and 15 %. This means, for example, for a King Air 200 propeller plane, an increase of 100 to 200 euros depending on the distance\", estimates \u00c9ric Peneau.<\/p>\n
All business aviation managers believe that the rise in fuel prices is unlikely to threaten their business. \"Whatever the economic conditions, business aviation fans will continue to use private aircraft because they know the economies of scale that can be achieved. It would take a major recession for the economy to turn around. Some companies are adapting to the higher cost of oil by, for example, carrying out two flights in the same day,\" says Fran\u00e7ois-Xavier Clerc, CEO of Aero-Affaires.<\/p>\n
The rise in oil prices is giving manufacturers pause for thought as they work on new, more fuel-efficient aircraft. The most spectacular announcement came from Jetbird, a new private jet carrier... based on the low-cost model. Scheduled to take to the skies in 2009, Jetbird is working with Embraer on the launch of a new aircraft, the Phenom III. Two versions, the Phenom III-100 and Phenom III-300, will be able to carry four and six passengers respectively over distances ranging from 2,000 to 2,800 km. The reduced weight of these aircraft, dubbed VLJ (Very Light Jet), will result in substantial fuel savings. Jetbird has ordered 100 Phenom IIIs and will base most of its fleet in Switzerland. The company plans to operate a pan-European network and has already announced that it intends to offer its new aircraft at extremely competitive rates compared with the competition.<\/p>\n
It's a development worth keeping an eye on, and one that shows that business aviation still has a promising future on the European continent. A study carried out last year by Jetbird is edifying. Western Europe has a population of 399 million, including 2.8 million people with incomes in excess of one million dollars a year*. By comparison, the United States has a population of 299 million, 2.9 million of whom have incomes in excess of one million dollars a year. However, if we calculate the ratio of business jets to the European population, we find that it is just 20 % of the US ratio. In other words, there are still a lot of Europeans to be convinced before business aviation becomes a way of life on the Old Continent!<\/p>","protected":false},"excerpt":{"rendered":"