EBAA campaign highlights value of business aviation

 - May 6, 2009, 8:26 AM

The European Business Aviation Association (EBAA) has launched a campaign to make a strong case for the use of business aircraft during the current economic 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 makes the case that business aircraft can be key tools for allowing companies to improve their bottom lines and so protect jobs.

The media campaign was inspired by the negative publicity received by business aviation in the U.S. in the wake of political moves to mandate that companies receiving federal bail-out funds 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.

In December, EBAA published a report that it had commissioned from PricewaterhouseCoopers (PWC), the accounting firm, to investigate the economic impact of business aviation in Europe. The study, conducted between May and November 2008, was based on interviews with companies responsible 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 €19.7 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 PWC, its estimates of economic value were conservative as they subtracted profits from output figures because they 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 €24.8 billion.

The overall GVA calculation encompassed three factors: direct economic impact (?5.6 billion/28 percent); indirect impact (?4.8 billion/24 percent); and induced value (?9.3 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 new 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, generating combined pay of around ?5.7 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) accounted for the lion’s share of the total. These countries generated ?12.6 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.

According to PWC economist Mal Bozic, the survey team also tried to assess less tangible socio-economic benefits derived from the use of business aircraft, such as the convenience of being able to fly to an airport close to a passenger’s final destination, as well as the flexibility of changing departure times so business meetings could be extended or altered to allow closing of deals. “There is strong anecdotal evidence of the role of business aircraft in deal facilitation,” said Bozic.

One executive interviewed at London City Airport told the PWC researchers: “Two people on a Citation can be more valuable to the economy than 100 people on a Boeing [737].”