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Euro business jets start tricky climb

Visitors walk past model aircraft at Ebace Reuters

After two turbulent years the European business aviation sector appears to be slowly recovering but many uncertainties remain, say industry executives.

This content was published on May 5, 2010 - 08:27

Some 12,000 visitors are expected to attend the tenth European Business Aviation Conference and Exhibition (Ebace) in Geneva, which opened on Tuesday.

Brian Humphries, president and chief executive officer of the European Business Aviation Association (EBAA), has a smile on his face.

“We’re beginning to see the signs of recovery and good figures,” he told swissinfo.ch. “But there is no doubt the market is still struggling and we expect only steady slow growth over the next two years.”

New statistics from the continent’s air safety body, Eurocontrol, show flights by business aviation have grown 5.2 per cent in Europe so far this year and grew by 11 per cent in March.

The figures, based on the number of flights by independent operators including firms flying their own aircraft, contrasted with a growth in regular commercial passenger and cargo airline flights of only 1.6 per cent in March, Eurocontrol said.

The sector also suffered much less than commercial and cargo carriers from the six-day shutdown of European airspace last month over fears of the effect on jet engines of ash from the volcanic eruption in Iceland.

Painful downturn

Humphries said his optimism was fuelled by the high participation levels in Geneva.

Some 436 exhibitors – from large plane manufacturers and their suppliers to small firms offering services like air taxis – have stands at the second largest Ebace ever.

Companies taking part include Bombardier, Airbus, Boeing, Dassault, and Embraer.

This upturn follows a steep, painful two-year recession, which many in the industry would like to forget.

Business aviation, which accounts for some seven per cent of all air traffic movement across Europe, declined by 15 per cent in 2009 from 2008, having already fallen by 20 per cent the previous year. The sharp drop led to plane orders being cancelled or suspended.

The decline followed a boom in the period 2003-2008 when the industry grew by 17.2 per cent.

Slow going

Most executives agreed the recovery would be slow and difficult.

Richard Aboulafia, a US aviation analyst with the Teal Group, said the market had stopped falling, but he foresaw no resumption of growth until 2012.

“It’s clear that there is an early recovery,” said Roger McMullen of the Geneva-based firm TAG Aviation. “It’s too early to say how strong and if it will last. We shouldn’t delude ourselves that we will have the same business levels as 2007/8.”

He said the upturn would be driven mainly by Asia, followed by Europe, Russia and then the US.

Juliane von Heimendahl, communications director with the Zurich-based ExecuJet aviation group, echoed his words.

“We all thought the recovery would be faster; everyone is very cautious,” she told swissinfo.ch. “But what is good is that the banks are starting to finance again.”

Future fears

Many clouds remain on the horizon. Economic recovery is strong in China but confidence is still fragile in the United States and new risks are looming in Europe.

A major challenge involves “working off” the large backlog of used business jets on the market – 15 per cent of the total fleet – which would weigh on sales and prices of new planes, said Aboulafia.

Another doubt surrounds the European Union Emission Trading Scheme (ETS) and how it will affect the aviation industry from 2012.

“Business aviation accounts for seven per cent of air traffic but only one per cent of emissions,” said Humphries. “How can we meet our environmental responsibilities in an affordable, non-bureaucratic way?”

And access to airspace and airports remains a major point of discussion.

According to Eurocontrol, 70 per cent of all business flights in 2009 were on routes between cities that have no daily scheduled service.

“Business aviation is complementary to and not in competition with the major airlines,” said Humphries.

Looking ahead, access could become a problem if low-cost carriers start expanding into secondary airports, he told swissinfo.ch.

Simon Bradley in Geneva, swissinfo.ch

Ebace 2010

The European Business Aviation Convention & Exhibition (Ebace) runs from May 4-6, 2010 at the Palexpo exhibition centre and Geneva airport.

It is the second-largest fair of its kind outside the United States.

This year's event, which counts 436 exhibitors, is expected to attract more than 12,000 people.

Over sixty business aircraft will be parked on the tarmac.

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