What do I talk about when I talk about business aviation? I talk about connections. Connections between cities and regions – business aviation serves around 103,000 European cities. I talk about connections between business-to-business and business-to-consumer companies and people – face-to-face.
Business aviation is an indispensable part of the air transport network, allowing people to schedule business travel to at least three times more destinations in Europe than airlines. Although, on average, the users of business aviation are also the biggest users of airlines because they utilise the most appropriate mode of transport for the business situation.
Consider this: you’re a chief executive; you, along with your executive team, have an important meeting in London, followed by one in Paris and one in Milan, but not this month, not even this week – you need to get to all three meetings tomorrow.
Business aviation is the only way this is going to happen. But why are these meetings so urgent? Because they enable business deals, increase company activity and profits, and result in economic growth.
As the chief executive, it’s your responsibility to make the connections and sign the deals that create growth for your company, jobs for its employees and value for your shareholders. Ultimately, the benefits disperse further. The economic contribution touches cities, regions, countries.
Business aviation is an enabler for business and what Europe needs today is tools that enable business opportunities. It is also intrinsically tied to the economy. Since 2008, as the economy dipped, so did business aviation activity. But in 2014 the sector delivered its first positive growth year in flight movements since 2011 and we’re optimistic that this is just the beginning of its upswing.
Three of the four key European markets – UK, France and Italy – contributed robust traffic growth figures up to 2.2 per cent, despite the overall growth rate being slightly muted at 0.7 per cent.
The European business aviation aircraft fleet – that’s 60 per cent corporate fleets, 20 per cent government, 17 per cent mix of charter, fractional ownership, emergency and medical, and just under 3 per cent private individuals – has been growing steadily since 2001, by 6 per cent in 2014 compared with 2013. Ultra-long-range aircraft have best weathered the economic storms and today the average flight duration is on par with business aviation’s best years. This is Europe doing business with the world.
Business owners in today’s global economy see the value of using business aviation to lift their companies to higher levels of efficiency and growth
In addition, average fare prices are trending upwards, but this is not supply-side imposed, since operating costs have not increased thanks to a drop in fuel price which represents around 18 per cent of operating costs. This points to demand-side pressure. Businesses and business owners in today’s global economy see the value of using business aviation to lift their companies to higher levels of efficiency and growth.
So with the beginning of the upturn, where are the opportunities? For users, the content of this Raconteur report should make it obvious; for the industry, we need to look a little deeper. The opportunities, in many ways, lie in overcoming some of the major challenges of the operating environment.
Ill-suited legislation, at EU and national level, due to misapprehension by governments and regulators is one aspect. In recent years, new regulations have created obstacles for business aviation. For example, at a time when European businesses and regions need more than ever to be fully connected, small airports are being threatened by closure as a result of new European state aid guidelines.
Yet hubs are suffering from congestion without clear solutions for more space or better efficiency within the current available space. Reduced access to airports and infrastructure hits the industry at its core, but it also hits those regions facing airport closure.
The subtler issue is that regulations for aviation are becoming “one size fits all”. Unfortunately, one size does not fit all and this kind of thinking is unconducive to enabling business opportunities for Europe.
I believe what is needed is a rethink – a change in perception. Developing solutions and new business models to best serve the market is where the opportunities lie. Innovative and entrepreneurial thinking that facilitates dynamism within the industry will essentially drive businesses and economic opportunities further.