October 02, 2012
Business aviation is playing a key role in helping with the economic recovery in Europe, a new study finds, saying that each passenger flown on a business aviation flight generates the same gross domestic product as nine business passengers on a scheduled flight.
The European Business Aviation Association retained Oxford Economics to conduct the study to determine the value of business aviation in Europe. The study finds that contrary to popular belief, business jets and turboprops in Europe are primarily used for business purposes rather than by wealthy individuals. For that reason, the study says, business aviation takes on a different importance than other forms of aviation. But “in policy terms, however, the added value of business aviation flights is often either overlooked in favor of the much larger number of commercial flights or attributed into a broad category alongside all other various forms of general aviation.”
One major operator estimates that 80% of its business comes from corporations, including a quarter of the firms in the Eurostoxx-50 (the Eurozone’s 50 leading companies).
The segment grew from 500,000 movements per year in 2001 to 800,000 in 2007. While suffering a heavy hit during the beginning of the downturn in 2008-2009, the sector has since stabilized, “helping to catalyze trade and investment around Europe,” the study claims. “Overall, business aviation has generated substantial and sustainable employment, and promises to be an important and unique contributor to a wider economic recovery.”
The study finds that 96% of city pairs served by business aviation do not have direct daily scheduled connections. But the remaining city pairs account for one-third of business aviation traffic. Overall, the study finds business aviation complementary to airline services.
“While the scheduled network provides ‘thick connectivity,’ based on economies of scale and concentrated at major cities, business aviation offers ‘thin connectivity,’ carrying a low volume of passengers between a much larger number of destinations,” the study says, adding that the business aviation network grew to 88,000 airport pairs by 2011, despite the economic woes during that time.
“It has been shown that two-thirds of executives declare face-to-face contact to be crucial in deal-making,” says Brian Humphries, EBAA president. “If you consider Oxford’s finding that 96% of city pairs served by business aviation in 2011 had no scheduled connection, it is little wonder that business aircraft passengers place a value on business aviation flights that [are] between eight to 15 times higher than those made on scheduled airlines.”
The study also delves into business aviation’s contributions to the European economy, citing estimates that the sector supported 164,000 jobs in Europe in 2008. The study contends that number has not changed significantly in the years since, despite the downturn.