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  • IN FOCUS: Business aviation multiplies corporate effectiveness, says study

IN FOCUS: Business aviation multiplies corporate effectiveness, says study

Business consultancy Oxford Economics says that each additional passenger on a business aviation flight contributes the same to gross domestic product as nine business passengers on a scheduled flight. It also reveals that 96% of city pairs served by business aviation in 2011 had no scheduled connection.

Commissioned by the European Business Aviation Association (EBAA), the Oxford study sets out to define the significance of business aviation in Europe and quantifies how the sector's activities directly and indirectly contribute to European economies.

The report confirms that business aircraft primarily carry key corporate decision-makers on high value-added trips. Contrary to popular - and in some quarters political - belief, the vast majority of business aircraft flights are not carrying wealthy individuals on private trips. Oxford quotes one major aircraft operator's estimate that 80% of the fleet are used by corporations, including a quarter of the companies in the Euro Stoxx 50 (the eurozone's fifty leading firms), and 20% of those in the DAX (the German equivalent).

EBAA president Brian Humphries says: "It has been shown that two-thirds of executives declare face-to-face contact to be crucial in deal-making. Business aviation facilitates such meetings like no other form of transport, thanks to the flexibility of its service.

"If you consider Oxford's finding that 96% of city pairs served by business aviation in 2011 had no scheduled connection, it is little wonder that business aircraft passengers place a value on business aviation flights that is between eight to 15 times higher than those made on scheduled airlines."

This figure is explained in the report as being the value added by the considerable time saved by flying direct to the point where business is to be done, which can save time measured in days by avoiding overnight stays, compared with dependence on scheduled airlines' offerings when they do not serve the destination at all, or serve it via a hub.

In 2011, the report reveals, business aviation connected 88,800 European city pairs. Those 96% of routes with no daily scheduled service account for two-thirds of business aviation flights. Therefore, business aviation plays an important role in linking cities across Europe that are not well catered for by the scheduled network. And, since many of these are regional airports that depend on business aviation as well as small numbers of scheduled operations to stay in business, the sector helps keep regional aviation alive.

The Oxford study also underlines the importance of business aviation to local economies. It finds, for example, that at Farnborough airport in the UK, direct on-site employment is estimated at about 1,000, but an additional 4,000 jobs in the local area are sustained by the airport's wider supply chain.

Oxford notes that NetJets' recent order for new Bombardier business jets will help sustain 5,000 jobs in Belfast in the medium term. Paris's business aviation airport, Le Bourget, expects to spend about €70 million ($90 million) on upgrading its facilities in the coming decade, which all adds to local infrastructure.

"Evidence suggests that a larger portion of business aviation employees live locally to the airport than is the case for wider aviation, concentrating the positive employment impacts in the immediate vicinity of the airport," Oxford says.

The report adds: "There is also evidence to indicate business aviation invests significantly more in training its workers than firms in other sectors, or in the economy as a whole. This is no doubt partly due to the regulatory and technical environment the sector operates in, but it also seems to be a conscious decision on the part of operators to develop local talent."

"What this study clearly points out is that business aviation is playing a key role in facilitating Europe's recovery," says EBAA chief executive Fabio Gamba.

"This importance should be recognised in policy formulation, with legislators developing regulations and mechanisms that bolster business aviation activity in order to further stimulate the growth of our region, rather than to ignore it as was evidenced by the European Commission's proposed recast on slot allocation, or to penalise it as the Italian government has done by introducing a double tax on owners and passengers, resulting in dismal business traffic figures in the country."