European Market Perspective:
An overview from Cedric Migeon- ExecuJet
ExecuJet European Managing Director Cedric Migeon says it will probably be 2015-16 before European Business Aviation is back to the golden days of 2007.
“The bottom of the curve probably came at the beginning of 2009. Since then aircraft movements over Europe have increased by between 25-30%. Although this is significant- the downside is that the starting point was down between 40-50% compared to 2007-” Migeon (based at the company’s European Headquarters in Zurich) outlined.
ExecuJet is a global Business Aviation company involved in all aspects of the industry- and Migeon is perfectly placed to comment on Europe’s overall Business Aviation scene. The company is involved in everything from FBO/MROs- aircraft management- consultancy and aircraft sales- to full blown charter operations – and is planning to further expand its presence in Europe.
On the aircraft sales front Migeon reveals things have definitely improved since mid- 2010- and that the company is selling between one and two aircraft per month on a regular basis. “We are mainly focusing on used aircraft and the majority of our customers [with aircraft under management] have an aircraft on order and are moving up in size. We’re talking Falcon 900-- Falcon 7Xand Global Express-sized aircraft.
“I wouldn’t say sales are booming but they are recovering nicely. All aircraft segments have seen an improvement and we do sell the smaller aircraft as well as the large-” he revealed. “The big difference is that the demand for Global Express-sized aircraft didn’t diminish as much throughout the recession as it did for the smaller jets.
“Compared to three or four years ago the charter market is now quite different- with far fewer players. Many companies have gone under during the recession and more are going under as we speak-” he added. The overall Business Aviation market in Europe has partly recovered and is favoring the larger companies like ExecuJet which has increased market share in Europe and the Middle East. The smaller charter operators with the smaller aircraft have suffered most- often fighting for loss-making one-hour charters just to keep their name in front of clients.
Change has also taken place for aircraft owners who trusted the smaller operators to manage their aircraft. Three years ago the typical attitude of owners was all about the lowest management fee. “We don’t have those discussions anymore-” Migeon reflected.
The philosophy has changed dramatically and the question now is- ‘Who are the operators that’ll be here if the recession hits again?’ “Customers are now far more focused on the quality of the service- whereas before it was solely concentrated on price – cheapest was best! Many customers have burnt their fingers by buying into that philosophy.”
QUALITY SERVICE AWARENESS
Owners have become aware of the advantages of the high quality services offered from certain companies. A point in fact (and- incidentally- bringing more customers to ExecuJet’s door) is the monitoring and verification work related to the European Union Emissions Trading Scheme (EU-ETS) which comes into full effect next January. To have this paperwork done by professionals is a big plus for owners with aircraft under management and is a service only available from the larger Business Aviation companies.
“At the moment we have a rush of business related to EU-ETS-” said Migeon. “We started work on this two years ago- but I’m pretty sure that the majority of the market did not.”
ExecuJet’s own managed aircraft fleet is up to around 50 in Europe (150 worldwide)- and Migeon expects the European fleet to grow by another ten aircraft year on year. “The fleet has grown by about 15 aircraft over the last year-and-a-half under the company’s different European AOCs.”
(The smallest aircraft in the fleet are a couple of Cessna CJ2s but Migeon reckons that ExecuJet Europe operates the largest Global Express fleet on the continent with more than ten. It also operates G550s- Falcon 7Xs and Falcon 900s.)
Of the European FBO market Migeon says things are still a little disorganized. “We have lots and lots of small players - some are fairly strong- but very local and absolutely unknown outside their limited territory.
“There is a tendency today towards market consolidation with the bigger players either acquiring or competing against those smaller players that are locally strong. We have been approached by some [FBO owners] who- rather than trying to fight the battle alone on a local basis- now just want to be part of a larger group. Some are keen to be purchased but others want to keep their independence yet be part of a larger group-” said Migeon.
ExecuJet Europe currently has FBOs at Berlin-Schoenefeld- Zurich- Paris–Le Bourget and Valencia and it will announce two more at EBACE- Geneva. Yet another two or three locations could also be added by September- he offered.
Migeon concluded with a brief comment on AOC harmonization across Europe- outlining that it is still unclear which countries would participate- but “If implemented it’s something that could make life much simpler-” he said.
More information from www.execujet.net