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The Entrepreneurial Case for Business Aviation

With the ability to reach exciting markets quickly and to allow scheduling flexibility as well as productivity while traveling- Business Aviation aligns perfectly with the entrepreneurial spirit.

Jack Olcott   |   1st September 2011
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Jack Olcott Jack Olcott

Possibly the world’s most recognized advocate, if not expert on the value of Business Aviation,...
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With the ability to reach exciting markets quickly and to allow scheduling flexibility as well as productivity while traveling- Business Aviation aligns perfectly with the entrepreneurial spirit.

Entrepreneurs grasped the advantages of using aircraft for business travel long before Business Aviation became an identifiable segment of air transportation. Examples of creative and successful businessmen incorporating aircraft into their company’s activities can be found in records dating from the 1920s in the USA.

For example- Mr. H.L. Ogg- president (and arguably the guiding force) of the Automatic Washer Company- was a charismatic innovator and creative businessman with a sense of promotion for his product -washing machines for home use.

From his office in Newton- Iowa- in the center of the USA and far removed from traditional hubs of commerce such as Chicago and New York City- he reached his markets with the aid of a single-engine monoplane manufactured by the Travel Air company (distant predecessor to the current Hawker Beechcraft Corporation). Equipping his aircraft with electrical power for a dictation machine- and with fasteners to secure transport of as many as four washing machines during flight- he conducted demonstrations and secured orders throughout the Mid-west USA.

As noted in ‘Keep Business Flying’ by the late John H. Winant shortly after he retired as the venerable President of the National Business Aircraft Association- “Ogg carried on the early tradition of [leveraging] good public recognition and relations through the mere presence of a business aircraft. ‘Smiling Thru’ [as the aircraft was called by Ogg] was used with good dramatic effect for product demonstrations- and for providing free rides to employees and fortunate potential customers. Above all- the Automatic Washer Company airplane was a no-nonsense business machine.”

Key Element for Penetrating Markets

In today’s technology-driven world of business- only the quickness with which transactions take place has changed. Even more so than in the past- today it is critical that the entrepreneur—the deal-maker—interact face-to-face with his client- usually as soon as the opportunity becomes apparent.

That is why so many creators of enterprises and wealth use business aircraft as a key element in their strategy for penetrating markets- and in their tactics of day-in and day-out activities.

Consider the case of the owner and CEO of one of the largest photo-finishing operations in the world and the largest serving the professional portrait and wedding market in the USA when he was interviewed in the 1990s. At that time his enterprise included 11 major processing centers in different states and a market clientele of over 9-000 photographers. In 1994- over 75 million photographs were processed by his laboratories- and Business Aviation played a big role in the entrepreneur’s and the company’s success.

In response to a question about his travel patterns- the owner said- “To us- a [business] aircraft is a piece of equipment- like we use in our plants [centers]. It has to be utilized in the right way. A few years ago- most of our key people- including myself- decided that if we were to grow- the only way we were going to be able to grow was to get to our locations in our own aircraft. Four years ago we had four plants and today we have eleven. The only way we have been able to expand our company and to get to these locations has been in our own aircraft.”

Research Conveys Business Aviation Value

Almost as many examples of entrepreneurial use of business aircraft exist as there are small and medium-size companies in the USA and Europe. Successful developers of relatively unknown companies create thousands of jobs and add enormously to the economic health of a region. While they have many reasons to be proud of their accomplishments for their family- for their community and for their country- entrepreneurs are often reluctant to be identified publicly. More often- they convey the value of Business Aviation through their participation in surveys.

According to research conducted by Harris Interactive- Inc. for the General Aviation Manufacturers Association’s (GAMA) and National Business Aviation Association’s (NBAA) No Plane No Gain advocacy program in 2009- the majority (59 percent) of companies operating business aircraft in the USA have fewer than 500 employees and 70 percent have fewer than 1-000 workers. Because of enterprise size- the role of the entrepreneur in smaller companies is pervasive.

Also pervasive is the enduring importance of Business Aviation. Harris Interactive’s 2009 study concluded that its recent findings were highly consistent with studies the research firm completed in 1997- which articulated the significant benefits of Business Aviation in market penetration- effective use of travel time and overall productivity experienced by users of business aircraft.

Research completed last year by Nexa Advisors- LLC for NBAA- and reported in ‘Business Aviation: An Enterprise Value Perspective—S&P Smallcap 600 Companies from 2005-2010’- observed that small and medium enterprises represent a diverse group of entrepreneurs and organizations in the USA. The firms studied by Nexa Advisors included companies that were privately held as well as publicly traded on open exchanges. Three key findings dominate the report’s conclusions:

• Users of Business Aviation outperformed non-users in terms of fundamental drivers of shareholder value [whether those shares were privately held by entrepreneurs or publicly traded].
• Small and medium enterprises using business aircraft were less impacted by the “Great Recession” that existed in the USA between 2008 and 2009 than non-users.
• Business Aviation provided small and medium enterprises with better access to customers and markets not conveniently accessible by other means of transportation- thereby improving customer retention and securing new sources of revenue.

As they look for new areas for economic expansion- High-Net-Worth entrepreneurs value their time in all their endeavors—whether the activity involves business- family or relaxing in the midst of their often hectic travel schedules.

Many such important and highly successful leaders of business employ business jets - often larger equipment (including Businessliners) - for their transportation- in essence using a flying office and home-away-from-home to help turn their economic dreams into profitable realities.

Entrepreneurs and Business Aviation: clearly they are made for each other.


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