COMMERCIAL BUSINESS AVIATION
‘The global growth
in flight hours is a
positive indicator for
the health of both the
aviation industry and the
economy as a whole’
—Neil Book
JSSI President and CEO
‘The Central and Eastern
European market is
developing well, even
though all of its
countries were hit by
recession, causing a
slowdown in the rate of
development.’
— Roger Whyte, former
senior executive with
Cessna Aircraft
market improvement includes educating people about business aviation on two levels. ”First, it’s about shifting attitudes:
from being seen as wealth and opulence to being viewed as a
business tool. The majority of our customers are using business
aviation to fill gaps in airline schedules, or when their itinerary is simply not possible with scheduled airlines (for example, they have several meetings in one day).For a company, it’s
often about weighing up whether they want their CEO spending
hours at an airport or taking him there and back and refreshed
in the same day. Ultimately it’s about efficiency.”
“Second, it’s about making private jet booking more transparent and accessible. The market is often seen as confusing, complicated and intimidating. Private jet booking platforms like PrivateFly give the customer more control, speed and transparency.”
Twidell sees polarised future growth in Europe – primarily
in the ultra-long range and very light jet categories. “The midsized jet market is contracting. In today’s climate, the customer
is choosing efficiency or luxury, but increasingly avoiding the
middle ground. I think the middle ground will recover as people
are able to upgrade their jet choices as the market recovers.”
In terms of business segments, charter has seen the most
growth since the recession, versus fractional and full ownership. “Fractional ownership is struggling to continue to appeal,
especially to the new breed of private jet user who wants to be
more in control of their costs.”
DESIRE FOR BRAND NEW JETS
CEPA’s Whyte said, “There is a clear increase in the desire
of the business aircraft buyers for brand new jets,” based on
research his organisation recently conducted of private aircraft
preferences and desires of the ultra-high net worth individual
(UHNWI) in Central and Eastern Europe. He quickly added,
“There is also a very healthy demand for pre-used, mid-sized
aircraft, which continues to grow.”
Whyte said price is “not the overriding factor in the decisionmaking process. The manufacturer of the aircraft has a huge
influence.” The research also showed that “one person alone
makes the decision,” not altogether surprising in uber-wealthy
circles. CEPA’s role in the CEE region, according to Whyte, is to
help create “more understanding and bridging the differences
that may exist between the methods of doing business. An example of this is when transactions take place between companies
and individuals from the east and the west; there can be cultural
differences and/or erroneous expectations affecting the trans-
20
ISSUE 5 • 2014
‘The business aviation
market in Europe is
now growing again. This
growth is modest, but
there are much more
confident signs.’
—Adam Twidell
PrivateFly CEO
‘Each cessna aircraft
brings distinctive
capabilities to the
European market and we
anticipate they will be
extremely popular with
our customers.’
—Tom Perry
Cessna Vice President of
Sales, Europe
action. Another example is financing, which requires different
structuring than in other parts of Europe. A big part of what we
do is connecting banks and institutions to aid financing.”
Whyte said there is also the misconception that the workforce is unskilled in the CEE, which is not the case. “The CEE
has a highly skilled aviation workforce.”
“All of the economic data shows this is a market to have
confidence in,” Whyte emphasised. “We know that the number
of air operator certificate (AOC) holders being created is growing, which means that aircraft are being registered in their own
countries, staying in the CEE, rather than being moved to outside of the region.”
Even critical geographical areas like Ukraine have a major
potential which will drive successful growth of the industry. The
CEPA countries will find ways to manage their way through
ecominc cycles and transient political upsets.
Whyte added, “Many countries in the CEE have high additional potential for growth in aviation, including Bulgaria,
Romania and the Czech Republic, as well as Poland. Compared
to the rest of Europe, I believe the CEE is a key market for the
future, despite its complications.”
EURO CHALLENGES
The private jet industry is highly fragmented in Europe. There
are over 2,500 aircraft available to charter, which are managed
by around 600 AOCs, typically with just two or three aircraft
each. Twidell predicted, “I think we will also inevitably see market consolidation with small companies not being able to compete with the resources of those with larger managed fleets.”
Twidell lamented that one area restricting business aviation
growth is, “the burden of bureaucracy,” which has exponentially
increased over the last decade, making it almost impossible for
small companies to remain profitable.” He listed air passenger duties (APD), limitations on airport access, carbon trad [