Airlines vs Business Aviation

Boeing have admitted to a furher delay with the delivery of their first Dreamliner, now scheduled for the last quarter of 2009. Low Cost carriers seem to be hitting financial difficulties, the FAA investigation in maintenance procedures of some of the major US carriers have resulted in more than 1,500 scheduled flight cancellations. With the air of doom and gloom, the US and possibly even the UK heading towards an economic slowdown possibly even a mild recession, the airline industry is surely not going through a rosy period. On the other hand, business aviation seem to be continuing to experience growth, especially in Europe, the Middle East and Asia. Farnborough predominantly business aviation airport, increasing movements, Embraer recently launching new business jets, Lufhansa purchasing business jets and setting up their own corporate aircraft wing. Jet Alliance experiencing growth through their Austrian airlines partnership. So what is happening? The aviation industry is a heavily regulated industry and requires huge amounts of capital to set-up and maintain an operation. New equipment has not exaclty become cheaper, the oil crisis has not really aided the industry, and as ticket prices became cheaper, it was in my opinion inevitable that the airline industry would struggle. As the major hubs became more congested, unprofitable routes dropped, new security measures at all major airports resulting in long queues and discomfort for the frequent traveller, the continued economic growth of the Asian markets, all this provided a platform for the growth of the business aviation. As more users afforded, and this is a key word, afforded, to buy business jets, the operating costs, even with the increase in oil prices, came down, this is especially true in Europe and Asia. This made a business jet charter flight more affordable to more high net worth individuals and corporations. The major difference between the airline industry and business aviation are the end users, the end user is not shopping around for the cheap ticket, forcing the airline to operate with negative margins, but the corporate jet user either affords the business jet or queues at Heathrow's spanking new so far dysfunctional Terminal 5, or with struggling Alitalia. The airlines problems are the business aviation strengths; SAVING EMPLOYEE TIME. Business aircraft can have longer ranges, flying non-stop between airports, which the end user wants to go to, not that the airline chooses, based on slots, costs, etc. Flying into London City, a short drive or helicopter flight from that meeting. INCREASING PRODUCTIVITY EN-ROUTE. Rather than writing off travelling time, studies have shown productivity on business aircraft is actually higher than in the office. Choosing with whom you fly allows for onboard meetings. EFFICIENT, RELIABLE SCHEDULING. The near total flexibility inherent in business aircraft is a powerful asset. Business determines the schedule - not the airlines. REDUCING HOURS AWAY FROM THE OFFICE AND HOME. Both business and the individual benefit when family time is not lost to non-productive travel. ENSURING INDUSTRIAL SECURITY. Use of business aircraft reduces travel visibility and eliminates unwanted and unnecessary interruptions. HIGH PERSONAL SAFETY, in a society threatened by terrorism, choosing whom you fly with has become of significant importance. INCREASING ENTERPRISE. Business aircraft allow opportunities especially those in remote regions to be more readily considered and acted upon. Studies have put access to business aircraft in the top three drivers for business relocation decisions. PROJECTING A POSITIVE CORPORATE IMAGE. As studies continue to show increased profits for corporations using business jets, we are now experiencing a scenario where using a business aircraft shows a company to be progressive with a keen interest in efficient time management and high levels of productivity. As long as the economic slowdown does not significantly impact mainland Europe, as long as the economic growth in countries such as Russia, China and India is maintained, I expect business aviation to stay on course and continue to grow.