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Aviation History
2002
2002 - 1661.PDF
OF READER SERVICES ITISER CONTACTS - 39 EDITORIAL +44 (20) 8652 3842 Quadrant House, The Quadrant, Sutton, Surrey SM2 5AS, UK Fax +44 (20) 8652 3840 email fliqhtMernationambi.co.uk Editor Murdo Morrison +44 (20) 8652 4395 murdo.morrison9rbi.co.uk Editor's PA Debra Warburton +44(20) 8652 3835 debra.warburton9rbi.co.uk News Editor Emma Kelly •44 (20) 8652 3096 emma.kelly9rbi.co.uk Commercial Aviation Editor Max Kingsley-Jones +44 (20) 8652 3825 max.kingsley.jones@rbi.co.uk Defence Aviation Editor Stewart Penney +44 (20) 8652 3834 stewart.penney9rbi.co.uk Operations/Safety Editor David Learmount +44 (20) 8652 3845 david.learmount9rbi.co.uk Business Editor Alexander Campbell +44 (20) 8652 3990 alexander.campbell9rbi.co.uk Business & General Aviation Editor Kate Sarsfield +44 (20) 8652 3885 (maternity leave) Business & General Aviation Reporter Justin Wastnage +44 (20) 8652 3863justin.wastnage9rbi.co.uk Spaceflight Correspondent Tim Furniss +44 (1237) 471960 tim9spaceport.co.uk EUROPE/MIDDLE EAST European Editor Christina Mackenzie •33 (1) 64 23 68 89 christina.mackemie9rbi.co.uk Israel Correspondent Arie Egozi +972 (3) 9413132 Middle East Correspondent Gerald Butt +357 2 771967 gbutt9spidernet.com.cy AMERICAS Washington DC Office Fax +1 (703) 836 8344 Americas Editor Graham Warwick +1 (703) 836 3448 graham.warwick9rbi.co.uk East Coast Editor Paul Lewis •I (703) 836 3084 jpaul.lewis9rbi.co.uk West Coast Editor Guy Norris •1(949)2528971 Fax+1 (949) 252 8972 guy.norris9rbi.co.uk Brazil Correspondent Jackson Flores Jr +55 212439-6062 Fax 00 55 212349-6090 lubar9uol.com.br Canada Correspondent Brian Dunn +1 (514) 937-1855 Fax (514) 937-3352 brian9derniermot.com ASIA/PACIFIC Singapore Office Fax +65 338 6171 Regional Managing Editor Nicholas lonides •6564343311 Fax+65 338 6171 nicholas.ionides9rbi.co.uk Deputy Asia Editor Andrew Doyle +65 6434 3309 andrew.doyle9rbi.co.uk Regional Reporter David Fullbrook •65 6434 3314 david.fullbrook9rbi.co.uk Australia Civil Aviation Correspondent Paul Phelan +61 (7) 4053 2791 Fax+61 (7)4053 3003 pdphelan9optusnet.com.au Australia Military Aviation Correspondent Peter La Franchi +61 (0) 419 246 620 Fax +61 (2) 62312795 nulka9ozemail.com.au EDITORIAL PRODUCTION Group Production Editor Graeme Osborn +44 (20) 8652 3828 Group Art Editor James Mason +44 (20) 8652 4994 Chief Sub-Editor Chris Thornton +44 (20) 8652 3850 Deputy Production Editor Jackie Thompson +44 (20) 8652 4997 Photographer Mark Wagner +44 (20) 8944 5225 TECHNICAL ARTISTS Senior Technical Artist Giuseppe Picarella +44 (20) 8652 8054 joe.picarella9rbi.co.uk Editorial Artist Tim Brown +44 (20) 8652 8043 tim.brown9rbi.co.uk WWW.FLIGHTINTERNATIONAL.COM Webmaster Sheena Buchanan +44 (20) 8652 4432 SUBSCRIPTIONS +44 (1444) 445454 rbi.subscriptions@rbi.co.uk THE FLIGHT COLLECTION Kim.hearn@rbi.co.uk © and Database Rights 2002 Reed Business Information Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the publishers -\J J online service at www.rati.com, contains the full text of Flight Vim ii Internationaland Airline Business since 1996. Full text of the magazines can also be found online with Lexis-Nexis. Dialogue, FT Profile, IAC and Reuters. Editor Kieran Daly +44 (20) 8652 3837 Reed Business Information COMMENT Business sense Europe's fractional ownership fleet is less than 6% that of the USA. So why is the market stubbornly refusing to grow? Lumped in as it often is with the chairman's chauffeur-driven Bentley, silver-service execu tive dining rooms and other emblems of "fat cat" excess, corporate aviation is likely to remain a harder concept to sell to staff and shareholders in Europe's "stakeholder" busi ness environment than on the other side of the Atlantic. In the USA, dress-down informality may mean the janitor gets to call the chief executive by his first name, but it's a culture in which individuals and corporations that have made it to the top of the heap have few hang ups about flaunting their status. It is partly this pursuit of the American dream - embodied in the company Learjet waiting to zip the successful entrepreneur from board meeting to Caribbean golf course - that has fuelled the growth in US business aviation since the 1960s. Lately, however, the sector has grown up, treating private aviation as a business tool positively affecting the bottom Fractional ownership could revolutionise the way companies do business in Europe line rather than a corporate perk. This change of emphasis is behind the surge in fractional ownership in the USA. The benefits are clear for all to see. Corporations have access at short notice to fast, secure and comfortable air transport for their staff and clients without the burden of a multi-million dollar asset depreciating on their balance sheet. What's more, their travel bill is often less than paying for airline tickets - and that is before the time-savings (parking the car, checking in and waiting for the security checks and baggage at the other end) are taken into account. Despite the collapse of United Airlines' Avolar venture in March (Comment, 2-8 April), Jhe sector's prospects are bright, with 700 aircraft in fractional programmes in the USA, with 4,000 share owners and nine in 10 users stating they are satisfied with the ser vice and will renew their contracts. So why isn't fractional ownership taking off in Europe? The region has a similar GDP and roughly the same number of people as the USA, and yet only 40 aircraft in fractional schemes. It could be argued that the concept was introduced a lot later than on the other side of the Atlantic - the two biggest operators are offshoots of North American companies, NetJets and Bombardier's Flexjet, and hasn't had time to become established. But this is only part of the answer. There are a number of hurdles to be overcome before the market can reach any sort of critical mass, as European Business Aviation Association chairman Brian Humphries noted at last week's European Business Aviation Conference and Exhibition in Geneva. Aside from the business culture prejudice referred to above, there are difficulties over access to air ports, tougher safety standards governing where aircraft can operate, and crucial taxa tion differences. In Europe, most businesses are located in or near large population centres. Airports are congested and private aviation operators, if they are allowed to use major airports at all, often face exorbitant charges. Access to local airports is also tricky. In the USA, landing safe ty rules are much looser than in Europe, opening a bigger network of destinations to the user. Unlike in the USA, 11 September has not created the same sea-change in airport security that has pushed even more busi nesses into joining fractional ownership programmes. Finally, there is the issue of tax ation. European tax laws tend to view a fractional share in an aircraft as a capital asset, on which tax must be paid. In the USA, buying a stake in an aircraft is tax-deductable, making the move even more attractive. These are issues Europe's legislators have to seriously consider. Without compromising safety, governments must move towards regarding a business aviation-friendly airport infrastructure as crucial to economic growth, and bring the rules on taxation and safety closer into line with those of the USA. Europe's fractional sector will never match the USA's for size: its geography, single lan guage and common laws mean its executives do a lot more flying for business, whether it is on domestic airlines, personal aircraft or cor porate jets. However, fractional ownership represents a real opportunity to revolutionise the way companies conduct their business in Europe. With only a handful of aircraft in ser vice, manufacturers ought to be hopeful about prospects and - after the likes of Flexjet and NetJets have begun to make in-roads - expect more providers to pour into the marketplace, as they have in the USA. Neither backward-looking business cus toms, nor legislators must be allowed to stunt this burgeoning market. SEE EBACE P23 www.flightinternational.com FLIGHT INTERNATIONAL 4-10 JUNE 2002 3
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