Switzerland's status as a politically stable centre for European banking and commerce has spawned a thriving business aviation sector

Switzerland's longstanding neutrality has given it political stability, helping it become one of the world's wealthiest countries. This, in turn, has spawned the world's fourth-largest business aircraft market in Europe with an installed base of 127 business jets and 47 turboprops, according to UK data research and Flight International's sister company Avsoft.

The recognition of business aircraft as a desirable mode of transport by Swiss companies and wealthy individuals has led to the creation of a plethora of diverse business aviation operations, ranging from ad-hoc charter to fractional ownership.

Switzerland's high-profile banking sector, coupled with the presence of large international corporations and non-governmental agencies such as the World Health Organisation and the United Nations, is critical to the thriving Swiss business-aviation sector, where some of the best known and respected operators and service providers have their roots. Jet Aviation was formed in Basle in 1967 as a base for business aircraft maintenance. Now, 37 years on, the privately owned company is a full provider of business aviation services with more than 3,500 employees across 60 locations in Europe, the USA, the Middle East, Far East and South America.

Substantial growth

The company has more than 150 aircraft either managed or owned, only seven of them under its Swiss aircraft operator's certificate (AOC), runs fixed-base operators on four continents and performs completions of aircraft ranging from Bombardier Learjets to Boeing Business Jets (BBJs). Throughout all the years of global expansion, Jet Aviation's Swiss facilities in Basle, Zurich and Geneva have grown substantially and remain essential to the group's prosperity. Martin Bernegger, Jet Aviation's senior vice-president and general manager aircraft charter, says Switzerland's strength lies in its reputation for quality products and services, and this extends to business aviation. "The Swiss brand gives us a stamp of excellence, and this is a tremendous advantage for us."

Jet Aviation's charter and aircraft management business, based in Zurich and Geneva, has a thriving Swiss and international customer base that is bolstered by the country's location within mainland Europe, says Bernegger, and is within easy range of the Baltic states and the thriving markets of the Russian Federation.

The lure of Switzerland's quality hallmark, portfolio of wealthy individuals and businesses and low corporation taxes has drawn a number of high-profile operators to set up bases in the country. Business aviation services provider TAG Aviation established its Swiss headquarters in Geneva in 1999 following the acquisition of Geneva-based Aero Leasing. The company now has a fleet of 13 owned and managed business aircraft - Europe's largest privately owned fleet of charter aircraft, it says.

TAG Aviation chief executive Roger McMullin says the company - which also has bases in the USA and the UK - plans to sell most of its owned aircraft and replace the fleet with leased or managed aircraft to reduce operating risk and overheads. "Our company-owned fleet has shrunk from 15 to seven aircraft, but we will continue to build the managed and leased fleet to meet demand."

The focus for much of Jet Aviation's and TAG's activity is on international operations because domestic transportation by business jet is minimal due to Switzerland's small land mass and high standard of ground transportation.

The absence of key players in this domestic transportation market prompted Zurich-based Lions Air to ditch its fleet of managed mid-size business jets and light helicopters four years ago and launch what is believed to be the country's first fractional ownership programme using the indigenously produced Pilatus PC-12 single-engined turboprop. "We found a niche in the market for an economic mode of transportation between towns and cities in Switzerland and slightly beyond its borders," says Lions Air director of sales Urs Maienfisch.

The company operates nine PC-12s and is scheduled to take delivery of a 10th aircraft within weeks. Lions Air also operates a Dornier 328 twin turboprop, used mainly for corporate shuttle services. Last year the Swiss federal office of civil aviation, FOCA, decided to buck joint airworthiness authority (JAA) thinking and approve domestic single-engine instrument flight rules (SEIFR) operations for commercial turbine-powered aircraft. Maienfisch suggests this was a major boost for the wider European single-engine turbine community, which had been striving for more than 10 years to gain Europe-wide approval from the JAA for SEIFR.

Fractional ownership

The growing acceptance of the PC-12 in Switzerland has made Lions Air the largest operator of this aircraft type in Europe and the fourth largest in the world, says Maienfisch. The willingness of the often cautious and conservative Swiss community to consider fractional ownership as an alternative means of transportation is also a welcome fillip for the region's operators. "The success of Lions Air has demonstrated that Swiss small and medium-sized companies are increasingly creative in finding flexible and individual flight solutions," adds Maienfisch.

However, Execujet Group managing director Niall Olver argues that providers of business aviation in Switzerland can often have a tough job selling the concept of business aircraft transportation to new customers, and this is particularly true of whole aircraft ownership. "The Swiss tend to dismiss the commodity appeal and just analyse the economics of business aircraft usage as an investment decision," he says.

Consequently, Olver says: "Given the per capita income and overall wealth of the country, a high percentage of eligible people are not using business aviation."

Execujet, which has bases in South Africa, Dubai, Denmark and Germany, established its Swiss base more than two years ago after acquiring Zurich-based charter and management company Avcon Air Charter, and is in the process of integrating the subsidiary into a single European operation offering aircraft sales, management and charter. Olver says there is no "one size fits all" philosophy in Switzerland, where customers are more receptive to the "boutique and personal approach", in which travel is tailored to their specific needs. "The market has enormous potential," adds Olver, "and we are here for the long term."

Unlike Execujet and the business aviation service providers already mentioned, Geneva-based private VIP airline PrivatAir has few Swiss customers. "We have a very thin client base in Switzerland," says chief executive Greg Thomas. "The country is mainly used for positioning flights."

PrivatAir was formed in 1977 as the corporate flight department of multinational organisation the Spiro Latsis Group. Initially known as PetrolAir, the company was licensed as a commercial airline in 1995 and has since become the pioneer of widebody business jet charter.

The company operates a private fleet of three VIP-configured BBJs and one Boeing 757 targeted at the luxury travel market. PrivatAir, which also has a base in the USA, operates a total managed fleet of about 50 business aircraft.

Much of PrivatAir's charter activity is focused on the Middle East, where wealthy individuals and royalty favour Switzerland over the USA as a holiday retreat. "The Arab market has stopped flying to the USA for ideological reasons," says Thomas. "We have developed a large customer base in the Middle East which spends summer in Geneva, often staying in Spiro Latsis-owned hotels. These clients often require transport to London and Rome to go shopping."

PrivatAir also leads the field in transatlantic business-aircraft shuttles, operating two long-range Airbus A319s and one BBJ on behalf of German flag carrier Lufthansa. A similar venture , using a BBJ2 between Zurich and New York Newark, is scheduled to begin by early next year with Swiss International.

Thomas says FOCA's flexibility towards indigenous operators has been a significant factor in the transatlantic service's success. Especially noteworthy is the national aviation authority's position on flight crew requirements and working hours. For example, says Thomas: "We are only required to have two-man crews on transatlantic crossings, whereas three-man crews are typical for many similar commercial operations in Europe."

Greater opportunities

FOCA's position could change over the next 12 months, however, as Switzerland continues to harmonise with the European Union, of which it is not a member, to gain unfettered access to European skies. Closer ties with the EU will give greater opportunities to the country's commercial operators, which under EU cabotage rules are excluded from point-to-point transportation within an EU member country.

In an attempt to overcome this operational snag, Swiss business aircraft operators have been forced to acquire an aircraft operator's certificate in an EU member state. Jet Aviation, for example, has an operating subsidiary in Cologne, Germany, TAG Aviation has a subsidiary in the UK and Execujet recently acquired German charter company Jet Connection.


Source: Flight International