The Boundless Potential of Business Aviation

Although it is widely perceived that business aviation is reserved only for the rich and famous, the reality is that the majority of business aircraft users are business owners. In the US and Europe—where business aviation has its strongest foundation—the average business aircraft seats six passengers and each journey is normally less than 1,600 kilometres, or 1,000 miles. Most companies, regardless of their size, also own their own aircraft, illustrating a commitment to business aviation far higher than many other modes of transportation. Interestingly, through studies made by Embraer in the US and Europe, it is the middle managers that use business jets the most, an executive level not normally associated with gratuitous pleasure trips.

Business jets serve as a business efficiency tool, enabling companies and executives to monitor their businesses and accomplish more travel than relying on the schedules and networks of commercial airlines. By extension, the business aviation industry is a service industry that provides companies—both big and small—a safe, cost-effective and adaptable tool that facilitates operational efficiency, cultivates and preserves customer relations, generates sales and provides on-demand support.

Strong connectivity, which is in part bolstered by business aviation, is a must for any country’s economy to grow in a sustainable way.

While there are as many uses for a business aircraft as there are actual business aircraft, there are some universally recognised benefits to owning or operating a business aircraft. Of these fundamental benefits, access to markets has always been imperative, and this has become even more important now that the global commercial aviation sector has adopted an aggressive consolidation effort. In mature markets, this means that cities that once had a lifeline to the international airline networks have lost most, if not all, access to air transportation, and have seen an immediate impact on employment levels and the local economy. In emerging markets, meanwhile, the cities excluded from the airline networks look on as those with active airline operations reap the economic benefits that come with large movements of commerce and tourism.

Business aviation and its infrastructure allows companies to overcome these challenges by providing a direct and efficient method of transportation to tens of thousands of locations ignored by commercial operators. And while communities are sometimes asked to provide an economic benefit to attract commercial airline service, the benefits of commerce are incentive enough for businesses to enter a new market or remain to support and cultivate an existing market sector.

Embraer’s home country of Brazil provides a prime example of this benefit. In the past decade, the main driver of economic success has not been the industrial epicenter of São Paulo—although its growth continues apace—but geographically remote metropolitan regions. At the same time, business aviation traffic into these regions also grew, drawing local and even cross-country investments in natural and industrial resources and providing industries access to a broader pool of talent.

With this larger business aviation footprint came an investment in aviation infrastructure from both the public and private sectors, which facilitated further commercial investment and more regional economic growth. All of Brazil has benefited from this economic growth.

Companies in mature and emerging business aviation markets also benefit from the agility and flexibility that comes with a business aircraft. By operating a business aircraft, companies can directly access an exponentially larger number of communities that would be difficult and costly—if not impossible—to access through commercial travel.

Embraer studies have revealed that the inherent security and privacy of travelling on a business aircraft has facilitated the increased productivity of passengers by 60 per cent compared to peers travelling commercially. The adoption of in-flight Wi-Fi now grants greater access to secure networks, offering companies further productivity benefits by utilising business aviation.

Employees using business aircraft also spend less time on the road, providing a healthy work-life balance while also controlling travel costs. Business aviation can facilitate modern commercial practices. Many businesses now provide near-time services to their customers that commercial aviation simply cannot support. A growing problem with airline delays and poor arrival times aside, business aviation offers companies the quickest, most flexible and secure means to transport parts and personnel at a moment’s notice.

Some of the most utilised business aircraft are those assigned to corporate shuttle duty. Normally operated on a schedule, these aircraft provide employees quick, easy and efficient access to company facilities with minimal disruption to a workday and allow workers to avoid the inconvenience and time constraints inherent to commercial air travel. Corporate shuttles and other business aircraft are also used for the transport of intra-company mail and freight.

These tangible economic benefits are bolstered when governments provide an environment for business aviation to grow. Improved infrastructure and appropriate regulations not only foster more business aviation traffic and the associated economic benefits, they also create a foundation for the business aviation support and service sectors to grow. As the number of business aircraft grows, so do the maintenance and spare parts industries, high-revenue sectors that attract and retain skilled, well-paid workers and generate their own industrial growth.

As with any major industrial sector, business aviation provides peripheral economic benefits to local, regional and national economies, but business aviation also creates its own secondary industries that provide major economic boosts in their own right.

These industries are mostly associated with aircraft ownership and can be particularly useful in establishing a nascent business aviation community. Charter companies, for instance, rent aircraft and crew for a specific purpose for companies that require occasional or unpredictable use of a business aircraft or have a need for different types or sizes or aircraft throughout the year. Businesses can also utilise a concept known as fractional ownership to own part (or fraction) of an aircraft in return for a guaranteed number of flights hours as well as maintenance and crew services. In recent years, companies have also signed partnerships, time-share and interchange/swap agreements. Each one of these options requires a base of operation, management, crews, maintenance staff and service workers, all areas of economic interest to any community, regardless of its size.

For companies that need full access to business aircraft, they can either purchase their own or lease on long-term contracts. These aircraft are usually operated through an in-house flight department with its own pilots and maintenance crews, although this work can be outsourced to aircraft management companies. Again, the economic benefits of these operations are tangible.

With these options at their disposal, companies around the world—both large and small—have recognised the importance of business aviation. With close to 20,000 jets and more than 14,000 turboprops working as business tools, local, regional and national economies continue to benefit from these unrecognised workhorses of global commerce. Recent studies by Embraer indicate that while the mature business aviation markets will continue to dominate the industry, it is the economies of Brazil, Russia, India and China—the BRIC countries—that will post the largest growth rates for the coming decade.

With appropriate government support and an accepting regulatory environment, business aviation can contribute significantly to the improvement of local, regional and national economies and provide the necessary access to markets required for global commerce to blossom.

The author is Vice President for Sales in Asia-Pacific and the Middle East, Embraer Executive Jets.