Users: seize opportunity to promote bizav, says EBAA

 - January 27, 2009, 6:00 AM

The European Business Aviation Association (EBAA) has launched a campaign to make a case for the use of business aircraft during the current recession. The Brussels-based group has asked its members to distribute a letter written by EBAA president Brian Humphries through newspapers and media outlets in their own countries (translated into local languages). The letter (see box on page 70 for full text) makes the case that business aircraft can be key tools for allowing companies to improve their bottom lines and therefore protect jobs.

The media campaign has been inspired by the negative publicity business aviation in the U.S. received in the wake of political moves to force companies receiving federal bailout funds to get rid of corporate aircraft. According to EBAA, there have not yet been audible echoes of this sentiment in Europe, but the association wants to bolster the case for business aviation at a time when its growth is stalled.

According to Eurocontrol statistics, the number of business aviation flights in
the 27 states of the European Union during December 2008 was 16 percent down on figures from the same period the year before. The like-for-like reduction for November was 17 percent. EBAA says that these falls resulted in a year-end figure that was close to the overall 2.7-percent drop in flying that it had predicted for 2008. The most serious decline was in the UK, where 2008 showed an 8-percent fall in activity and a 20-percent drop in December.

Humphries told AIN that EBAA members have reported activity levels as being down by around 15 percent for the three months from mid-October to mid-January.
Feedback from members suggests that European business aviation could see a fall of around 10 percent this year and that “not much” improvement is anticipated until the fall.

However, Humphries argued that this discouraging picture should be seen in the historical context of the exceptionally rapid growth experienced in recent years. In 2007 alone, business aviation activity grew by almost 15 percent.

The reduced number of movements–710,000–Eurocontrol recorded for last year was still higher than the total for 2006. The air traffic management agency’s figures show that there were 49 percent more business aviation flights in 2007 than in 2001–a period when other traffic (mainly scheduled airlines) grew by 19 percent.

“So we must not allow ourselves to get too depressed,” counseled Humphries, while acknowledging that some companies and individuals in Europe are now “thinking twice” about using business aircraft.

New Report on Bizav Economic Impact
In December, EBAA published a report that it had commissioned from accountancy group PricewaterhouseCoopers (PWC) to investigate the economic impact of business aviation in Europe. The study was conducted between May and November 2008 and was based on interviews with companies accounting for about 45 percent of business aviation economic activity in Europe, as well as industry databases and specific data from the annual reports of 70 business aviation companies.

The report stated that in 2007 the business aviation sector had contributed E19.7 billion ($29 billion at December 2007 values) to the European economy. This total–assessed in terms of gross value added (GVA)–accounted for about 0.2 percent of the combined gross domestic product of the European Union states, along with Norway and Switzerland.

According to the group, its estimates of economic value were conservative as it subtracted profits from output figures because it could not be sure what share of these profits would be distributed and spent within Europe. It estimated that if profits had been included the bottom-line total would have risen to E24.8 billion.

The overall GVA calculation encompassed three factors: direct economic impact (E5.6 billion/28 percent); indirect impact (E4.8 billion/24 percent); and induced value (E9.3 billion/48 percent). Indirect impact consists of financial benefits passed on through the supply chain for business aviation, while induced impact measures the effect of expenditure generated by employees related to the sector and its supply chain.

The study also investigated user benefits associated with business aviation, but the impact of these benefits was not quantified. The report highlighted benefits such as improved business links with relatively remote regions of Europe and time savings for business people.

The PWC report concluded that business aviation accounted for more than 164,000 European jobs in 2007. These generated combined pay of around E5.7 billion.
The study showed that, in terms of the impact of business aviation on European employment, the UK (at 30.3 percent), France (24.2 percent) and Germany (20.9 percent) account for the lion’s share of the total. These countries generated E12.6 billion in activity during 2007 and represented 75 percent of business aviation employment. Italy stood at 7.2 percent, followed by Switzerland at 4.4 percent and Austria at 3.3 percent.