Corporate aviation enjoys a boom

The service offered by private airlines is increasingly attractive to firms. Top-News

Commercial airlines may be in deep trouble, but small private aviation companies catering for business travellers are flying high.

This content was published on May 7, 2003 - 18:06

Geneva is currently hosting the third annual European Business Aviation Conference and expects a record number of visitors to attend the event.

The conference allows small private airlines, aircraft manufacturers and multinational companies to get together to see what's on offer.

While major airlines are busy trimming their fleets, last year 4,200 new aircraft were registered for corporate use - 2,300 of them in Europe.

Speed and cost

Swiss aviation analyst Sepp Moser believes the trend in business aviation has a bright future.

"At the moment you have to say that no sector of civil aviation is doing brilliantly," Moser told swissinfo. "But in the long term I'm sure this is here to stay - it is an important sector of the industry."

Moser explained that there were several advantages to corporate aviation compared with travelling business or first class on a commercial airline.

"First of all you have your own timetable," he said. "The plane goes where you want, when you want - and prices are competitive.

"Often flying with a corporate airline is cheaper than buying four or five first or business-class tickets."

Airlines without planes

There are different ways to finance corporate airlines, and most of them don't involve buying aircraft at all.

"Obviously a big company could buy a plane outright," Moser explained. "But this only makes sense if you fly for a certain number of hours a year. Some companies use the taxi model: you rent the plane for a specific journey.

"But the model which is growing in popularity is the timeshare model. This is interesting for companies which have a certain number of flight hours guaranteed each year but which are not enough to justify owning a plane."

The Geneva-based company, Club Airways, is one of the new "planeless" airlines, and seems to be going from strength to strength.

"We opened two and a half months ago with three staff," marketing manager Raphael Garcia told swissinfo. "Now we have ten."

"But we don't own any planes; we hire them from Jet Aviation, for example, on an hourly basis together with pilots and crew."

Club Airways charges an annual membership, either individually or to companies, which then gives its clients unlimited flying hours, although the membership fee does not include the ticket price.

"Our biggest advantage is speed," Garcia explained. "Our clients only have to check in ten minutes before departure. And when they arrive at their destination a car is waiting for them."

"On even a short journey, Geneva to Paris, for example, you can save four hours compared with the commercial airlines."

Worrying trend

The growth in corporate aviation is a concern for Europe's major commercial airlines, which have seen a drop-off in their first and business class passengers.

Last week the struggling national carrier, Swiss, announced it was setting up a cheaper regional airline, Swiss Express. The decision was partly influenced by reduced numbers of business-class passengers.

"I think corporate aviation is very competitive now," explained Sepp Moser. "And basically it is eating away at the business of the established airlines."

And it seems commercial airlines are unlikely to be able to stop the rot. More and more companies are turning to corporate aviation as the best way to get their staff from place to place, and they have evidence to show that it increases efficiency.

A recent study by the London School of Economics showed that businesses which owned or used private planes had an 11.3 per cent performance advantage over those companies which used commercial airlines.

swissinfo, Imogen Foulkes

Corporate aviation

The number of aircraft registered for corporate use rose by 4,200 last year
The 3rd Annual European Business Aviation Conference and Exhibition is currently underway in Geneva, and organisers expect a record number of visitors.
The big commercial airlines are currently suffering a drop in the level of business travellers.
Companies who use corporate airlines have seen an increase in productivity and efficiency

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