Strategies, Options & Perspectives: May 2005
Politicians and the general public are often quick to discount the value of business aviation to the nation’s economy. They take for granted that company personnel can easily meet customers, explore new markets and develop successful businesses. It is when airline schedules are unable to satisfy the demanding needs of business or when delays disrupt meeting plans that they begin to appreciate the benefits of traveling efficiently and using time effectively. Even then, business aviation often is overlooked, or at least under-appreciated, as a viable travel option.
You, the people who make your living in business aviation, are particularly well qualified to sing its praises, and what follows is intended as a song sheet to be kept handy for whenever the opportunity arises for you to plant seeds of knowledge in minds.
Transportation has always been a necessary resource for economic development, and business aviation is an unusual form of transportation in that it enables the right person to be at the right place at the right moment. It also expands the value of our nation’s airline-oriented air traffic management and control infrastructure (which would exist even if there were no business aviation) by providing economic access to communities that airlines do not serve. Yet most travelers know little about business aircraft or the contributions they make to the ebb and flow of commerce.
Whether because of lack of familiarity with our community, unfounded disdain for what some perceive as royal barge transport or failure to appreciate the benefits of on-demand travel to thousands of locations, policy leaders within government and the media must become more aware of business aviation’s beneficial role within our nation’s air transportation system.
As more aircraft enter the airspace and the federal government attempts to find new ways to finance infrastructure improvements and operating expenses, it is imperative that our leaders appreciate business aviation’s value to the nation.
Brisk Demand for Business Aircraft
Business aviation’s important place within the transportation system is reflected in many ways. Consider the gross domestic product (GDP): of the nearly $1 trillion that air transportation contributes to the U.S. GDP each year, general aviation is responsible for more than 10 percent ($100-plus billion), and 70 percent of all general aviation flying is for business purposes.
Consider also the current demand for business aircraft as a reflection of company demand for transportation alternatives. Deliveries of general aviation jets and turboprops last year reached 912, the fifth highest number of turbine-powered aircraft per year in the history of this class of general aviation. Manufacture of piston-powered aircraft was brisk too, totaling 2,051, the highest annual production rate in 20 years. Overall, new aircraft deliveries totaled $11.9 billion, general aviation’s third highest number for industry billings.
Sales momentum, which grew last year, is another indicator. Manufacturers of business jets report production backlogs on the order of 12 to 18 months and in some cases as many as 24 months. A business jet ordered today probably would not be available for service before the end of next year or early 2007.
The slowly recovering economy is not the core reason for last year’s strong demand for business aircraft. More important is the need for the swift transportation so essential in today’s business environment, which is characterized by instant communications and just-in-time delivery. Mobility, whether for people or products, is crucial in today’s fast-paced business environment. The location or region with minimal access to aviation is at a significant disadvantage.
The Case for Business Aviation
Scheduled airlines, the traditional providers of air transportation, have yet to find new economic footing and profitability after the recession of the last few years and the imposition of costly security measures. Although passenger bookings and airline departures have reached pre-9/11 levels, the vast majority of scheduled service focuses on a mere handful of hub airports.
Airline passengers require large chunks of time to travel from home or office, check in and negotiate the crowds at major terminals, change airplanes at an intermediate hub and eventually reach their destination. NASA analysis indicates that the overall speed from departure to destination for a typical scheduled flight involving an aircraft change at an intermediate hub is about 90 miles per hour for trips of fewer than 500 miles.
All aircraft battle the forces of gravity and drag. The larger the aircraft, the more power required and the greater the runway length needed to take off and land. Also, acquisition and operating costs increase with size. The combination of adequate ground infrastructure to accommodate appropriate aircraft and sufficient passenger volume to cover costs has limited to fewer than 500 the number of airports that currently receive scheduled service. More significantly, more than 70 percent of passenger enplanements take place at the fewer than 35 hub airports.
Business aircraft can use most of the 5,200 public-use airports in the U.S. While not every aircraft can operate from every facility, in relative terms business aviation provides access to 10 times the number of airports served by the scheduled airlines and 100 times the number of airports with convenient service. As very light jets enter the airspace in the next 12 to 18 months, companies will have rapid access to numerous cities and towns without scheduled airline service.
As the debate over FAA reauthorization becomes intense, as it surely will during the next 12 to 18 months, we will be challenged to communicate the value of our community to the nation. It behooves all who are involved with business aviation to assert with confidence that on-demand air transportation is a vital resource for economic development and enhanced quality of life.