When the topic of corporate aviation is discussed, how is it normally portrayed? It is only for the “RICH” It is a way for big corporations not to pay their taxes (“fair share”) Why can’t they ﬂy the airlines like everyone else? It is just an extravagant expense
How many remember the General Motorsexecutives ﬂying into Washington back in ’08?- Bill Sporato (Time Magazine) put it this way“Ofﬁcial Washington was outraged at theextravagance”- Or, Representative Gary Akerman (NY), "Imean, couldnt you all have downgraded to ﬁrstclass or jet-pooled or something to get here?
How about the recent comments by our President?- Richard Wolf (USA Today) - “President Obamamust really have it in for corporate jet owners, whyelse would he single them out six times during hispress conference”President Obama made this statement in the samepress conference. “Youll still be able to ride on yourcorporate jet. Youre just going to have to pay a littlemore”
What is Corporate Aviation?What size companies utilize these airplanes?What aircraft make-up the corporate ﬂeet?What purpose do these airplanes have?What beneﬁt is realized by the company andothers?What value is realized? (monetary and non-monetary)
What Size companiesutilize these aircraft According to the National Business Aviation Association, 85% of companies that use business aircraft aren’t corporate giants, they are small and midsize companies. "General aviation aircraft are used by businesses of all sizes to generate opportunities and create growth, often in communities that arent easily accessible through other means," said Craig Fuller, CEO of the Aircraft Owners and Pilots Association.
What Aircraft make-up the Corporate fleet? Jets Rotorcraft Turboprop 17% 11% 72%1. NEXA Research, NBAA, 2010
What purpose dothese aircraft have?Transport employeesTransport executivesMedical, Evacuation and Humanitarian aidGeodetics (GPS graphing)Cargo handling / Mail / FreightCustomer support
What benefit is realized by the company? Einstein would be proud: - “Having an aircraft allows me to do more in a day… see more customers, visit more distributors, and make more appointments. It is a way to leverage my time. I call it my time machine.” Steven G.Whitney PresidentWhitney Products 22. NEXA Research, NBAA, 2010
5000 paved airports in the US as of 2008, only376 have scheduled airline service(government database) Scenario: Trip to Clarksville, TN from Greenville. (Airline vs. Corporate) Airline: Arrive @ GSP 0430, leave for Nashville @ 0530 w/ a stop in CLT arrive in Nashville @ 0930 (EDT). Disembark and head to the rental car counter to get your car. (30 min). Drive to Clarksville approx. 1hr 5 min. Arrive at destination around 1105 (EDT or 1005 (CDT).
Corporate / Charter: Arrive @ GMU 0745,leave for Clarksville @ 0800, nonstop, arrive inCKV @ 0900 (EDT), rental car waiting at theplane. Arrive at your destination around 0930(EDT) or 0830 (CDT)
Sure, that’s greatbut what about cost? In the airline scenario, the tickets for 5 passengers were $1500. Depending on your meeting you may stay overnight and have hotel rooms $550 Loss of productivity: ????? Corporate / Charter: Around $5600, out and back same day (better schedule), no hotel rooms, normal work hours and back in the ofﬁce next morning.
“In the time it takes for our employees to even get to the closest commercial airport, we can have them onsite using our own aircraft. It doesn’t take a lot of brain power and spreadsheets to realize that having the aircraft is a beneﬁt.” Zane Lambert Flight DepartmentManager 19% 48% Limited or No Scheduled Airline Service Secondary Airport Commercial Airport3 NEXA Research, NBAA, 2010 33%
What benefit is realized by the company and others?Company Increased productivity (employees and management) Improved security of employees and property Improved customer retention (Key to any business, customer support)
OthersEd Bolen, CEO of the National Customer OfﬁcesBusiness Aviation Association, New Customer Sales Company Facilitiesnoted the general aviation 4 NEXA Research, NBAA, 2010industry employs 1.2 millionpeople and generates $150billion in revenue annually. He 24% 43%added:“these companies are using their aircraft to reach foropportunities to keep their businesses alive in anunforgiving economic marketplace. In the process,theyre bringing jobs, investment and hope to towns 33%across the country”
What value is realized? (monetary / Non- Monetary) Superior ﬁnancial performance Reduced recession impact Better customer access5 NEXA Research, NBAA, 2010
Superior Financial Performance Users of business aviation outperformed nonusers. Not surprisingly, the companies operating business aircraft performed better ﬁnancially than companies that did not. (Small / Medium’s) using business aviation recognized its strategic value, and did not need sophisticated justiﬁcation to make the business case for keeping or even expanding business aviation’s role. Many said they could not have grown their company without business aircraft and the access to smaller airports close to their customers.
Reduced Recession Impact SMEs using business aircraft were less impacted than nonusers. Indeed 69 percent of these companies posted greater top line growth in 2008 and 2009.
Better Customer Access NBAA President and CEO Ed Bolen and other general aviation leaders discussed the value of light business aircraft to companies needing “to save money and keep their schedules ﬂexible.” Bolen said these aircraft are often used by companies “trying to visit three, four sites in the same day, and that can’t be done with other modes of transportation.” Cessna Aircraft Company CEO Jack Pelton said of today’s fuel-efﬁcient light business aircraft: “It is an ofﬁce in the sky. This is not a luxury – it’s really a business tool.”