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Global Conference 2008 | Business Aviation: Providing Tools, Not Toys
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Panel Detail:

Tuesday, April 29, 2008
9:30 AM - 10:40 AM

Business Aviation: Providing Tools, Not Toys

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Panelists discuss the advantages of corporation aviation as a strategy for avoiding the growing inconveniences of commercial travel.

"Informed executives have come to realize that they can't get the job done without business aviation," said Robet Knebel of Flexjet. This morning panel explored the value provided by business aviation and laid out guidelines for most effectively utilizing the different options for private air travel as a tool for improving a firm′s productivity and saving costs.

Private-sector attitudes about business aviation have changed dramatically over the past 25 years, said Knebel. Just a few decades ago, he explained, "the cost of aviation was seen as indefensible, but today its use is seen as indispensable." Two trends have accompanied this rise in interest, he said. First, there is a growing menu of options for chartering aircraft. Traditionally, companies who wanted to use private air travel were required to either purchase a block of time on an aircraft or buy their own fleets. New arrangements, like air taxis and fractional ownership of aircraft, have allowed companies to employ business aviation more effectively and inexpensively. Second, new types of aircraft designed for business aviation have come to market, also increasing efficiency and decreasing the cost of travel by allowing businesses to tailor their fleets to their needs.

As a result of these developments, businesses have been able to use private aircraft to meet a variety of needs. While the public perception has been that executives are the primary users of these aircraft, in fact, only about 86 percent of passengers traveling on business management jets are at the executive level. Co-panelist Gary Hoffman of Corporate Aviation Management explained that one of his clients, an oil company with interests around the world, used a variety of business aviation tools to increase productivity. The company purchased its own jet to fly skilled engineers from Anchorage, Alaska, to remote areas of the state and chartered international flights for its executives.

Alvaro Pascotto of Morrison & Foerster LLP said his clients have turned to private aviation as a result of the declining efficiency of commercial aviation. In the wake of 9/11, it grown increasingly inconvenient and time-consuming to travel, making business aviation an attractive option. Pascotto pointed out that the private equity sector has recognized this growing industry and invested in it, being particularly inclined toward business aviation-related firms because of the segmentation in the market.

That rapid growth can be seen especially in Europe and the developing world, said Brant Dahlfors of Bombadier Aerospace. "Prior to 2003 the U.S. represented 70 percent of the world market," he said. "Today demand outside the United Sates has reached 70 percent." Markets for business aviation in China, India and Eastern Europe are expected to grow substantially in the near future.

In closing, the panel highlighted two major issues facing the business aviation industry today. First, the industry is considering how to reduce its environmental impact. Second, private aviation businesses are fighting against commercial aviation groups over the relative portion that each sector should pay in contributing to the maintenance of America's airports.

Speakers:

Brant Dahlfors, Vice President of U.S. Sales, Business Aircraft, Bombardier Aerospace

Gary Hoffman, Senior Vice President, Corporate Aviation Management, Lehman Brothers Inc.

Robert Knebel, Vice President of Sales, Flexjet

Alvaro Pascotto, Of Counsel, Morrison & Foerster LLP

Moderator:

Mark Bloomer, President and Founding Partner, Bloomer deVere Group Avia Inc.


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