The April 2010 eruption of the
Eyjafjallajökull volcano in
Iceland and the virtual shutdown
of commercial airline
operations across much of
Europe was a stunning, sobering reminder of
the power of nature over our personal and
The AvBuyer editorial team includes Matt Harris and Sean O'Farrell who contribute to a... Read More
The Value Era In Business Aircraft Through business leadership; responsibility via flexibility.
The April 2010 eruption of the Eyjafjallajökull volcano in Iceland and the virtual shutdown of commercial airline operations across much of Europe was a stunning, sobering reminder of the power of nature over our personal and business lives.
For stranded business travelers booked on over 102,000 cancelled flights, thoughts of spring’s renewed growth and brighter skies were abruptly set aside, displaced by chaotic schedule rearrangements, missed meeting opportunities, lost productivity, broken supply chains, and less sleep.
In the aftermath of an unprecedented disruption in air travel and transportation services, all parties are to be commended for their prudent initial reactions, and to maintaining an absolute focus on the First rule of aviation – Safety 1st.
Nevertheless, events of the last few weeks and the ensuing confusion has been a sudden reminder of the massive amount of work that remains to be done to simplify the onerous regulatory and operating environment that impedes Single European Skies, over a region which - as a whole - is the world’s largest single economy.
Unclear risk guidance materials, limited data on volcanic ash concentrations and danger levels, and under-coordinated national regulatory responses no doubt delayed the re-opening of air routes, forcing travelers and carriers alike to fend for themselves and find their own way forward in the acrid environment.
It is at unfortunate times like these that the true value and flexibility of business aviation is most apparent. Business aircraft operators across Europe stepped up to the Eyjafjallajökull challenge, helping to move people into and out of the region with typical style, responsiveness, safety and security under abnormal and stressful conditions.
As we have discussed on these pages before, the ‘money value of time’ drives customers to business aviation.
In 1997, a seminal Wall Street Journal survey of 614 top executives at NBAA member companies found that ‘convenience’ was the greatest benefit in owning a corporate aircraft.
In its ‘Business Travel Survey 2010’, London Executive Aviation (LEA) found that 91% of respondents (European business jet passengers, brokers, tour managers, and corporate travel coordinators, 75% of whom are from the UK) believe that ‘time-saving convenience’ is the greatest benefit of business aviation over commercial air travel. LEA chief executive Patrick Margetson- Rushmore notes that “when passengers want certainty and efficiency in their travel plans, they turn to business aviation,” (LEA Press Release, May 4, 2010).
TAKING SERVICE TO FL410
At times of maximum stress, the true nature of a business – and its people and customers – is revealed. Natural disasters have an incredible effect, reminding us all that with business leadership comes responsibility. Leading European commercial operators like LEA, VistaJet, TAG Aviation, Jet Aviation, GAMA Aviation, Comlux, and Lufthansa Private Jet, alongside their corporate flight department brethren, proved just how valuable and available their services were to their European customers over the past weeks.
In the Americas, recent catastrophic earthquakes have encouraged people and organizations to share their resources and privileges with those most in need. Flexjet and one of its owners partnered with Doc to Dock (whose motto is ‘Converting Surplus to Survival’) to ship almost 2,000 pounds of un-used medical supplies to Haiti to help meet an ‘unimaginable need’.
Flight Options, in coordination with Missionary Flights International, donated a Legacy 600 to fly four relief flights. Avantair flew multiple flights in February. A U.S. private citizen and high net worth individual (who will go unnamed) leased an Airbus A319 ACJ at his own expense to deliver medical and food supplies to Port-au-Prince, returning with orphaned children.
CitationAir flew multiple missions and then partnered with the International Humanitarian Aid Foundation (IHAF) to help meet the persistent need for relief efforts in Haiti months after the devastating earthquake, facilitating the donation of owner hours.
SHAKEN, NOT STIRRED
In the aftermath of The Great Recession, and the earth tremors of recent natural disasters, business aviation customers are truly in a different world – badly shaken, but not deterred from their mission to lead by example, following both their data and well-honed instincts to discover new ways to make a difference.
Business aircraft operators who demonstrate that they understand that their business is not all about business - and that their customers are individuals with unique and sometimes complex requirements - will succeed.
SOME GOOD NEWS: With the rebounding stock markets (stocks are highly concentrated in well-to-do households), wealth has begun to return. Dr. Edward N. Wolff, New York University economist, calculates that the top 1% of U.S. wage earners actually increased their share of national wealth from 34.6% in 2007 to 37.1% by July 2009. Although the S&P 500 index was down by 41% in real terms from 2007 to mid-2009, this asset class makes up only 21% of the gross assets of the top 1% of U.S. wage earners.
MORE GOOD NEWS: The advance estimate of U.S. Real Gross Domestic Product (released on April 30, 2010) indicates that the U.S. economy grew by 3.2% on an annualized basis from the 4th Quarter of 2009 to the 1st Quarter of 2010. This is the 3rd consecutive quarter of positive U.S. growth. Other key business aviation economies – including Canada, Mexico, Germany, France, U.K., Switzerland, Saudi Arabia, UAE, Japan, South Korea, China, India, Australia, and Brazil – are also registering positive GDP numbers.
While business indicators suggest that many economies have begun to grow again, the just-released 2010 Survey of Affluence and Wealth in America from American Express Publishing and Harrison Group provides some important insights into perspectives of well-to-do Americans.
In a survey of 1,910 households with a mean income of $520,000, 94% of affluent Americans feel that the U.S. is still in a recession, and 60% believe that the recession will last at least one more year. Researchers found that while optimism is slowly rising, affluent American families have turned inward to get themselves through these unsettling times.
The wealthy are more in control of their personal finances, proud of their self-sufficiency and resourcefulness, and committed to exercising prudence and finding value in what they purchase. As we highlighted before, the value era in business aviation is well underway.