High fliers

Brian Humphries, President and CEO of the European Business Aviation Association, tells BM why executives are shunning airlines in favour of private jets – despite the downturn.

“The reason why these airlines failed was because of bad luck and bad timing and a combination of old fuel thirsty aircraft, high fuel prices and an economic downturn. Of course, the fuel price really affected them because they use quite old aircraft”
-Brian Humphries

There's a lot the world doesn't know about business aviation, according to Brian Humphries, CEO of the EBAA. Few are aware, for instance, that the sector is worth around €20billion to the European economy - accounting for approximately 0.2 percent of the combined GDP of the EU, Norway and Switzerland. Neither would the average man on the street know that it employs 164,000 people across the region and that the business aviation fleet is among the most environmentally friendly in the world.

More worryingly, says Humphries is that the fact that the public has serious misconceptions about the industry miscasting it as just a "rich man's toy"."We are a significant industry, yet in the US in particular we are miscast as a rich man's toy," he says. "In fact we employ a lot of people and we bring in a lot of money for the economy."

The EBAA was founded in 1977 and has 400 members from across the industry, and represents 800 aircraft. It is involved in helping to draft new legislation for business aircraft, acting as a mouthpiece for the industry at the EU Commission and in championing operators' causes. Humphries is especially concerned about charges that business aviation is bad for the environment - a claim the EBAA vehemently denies: " The first thing to say is that business aviation often gets painted in a bad light but in reality it has a minimal impact on the environment. In 2008 we accounted for eight percent of the traffic and less than one percent of the emissions. The reason for that is our aircraft are small, clean, quite and modern and they tend to fly direct routes. We only contribute around two million tonnes of Co2 which is equivalent to a small power station. And it's about .04 percent of overall emissions," says Humphries. He goes on to describe how some business aviation operators, including Netjets have introduced compulsory carbon offsetting initiatives for their passengers.

However, he adds, efforts by the industry have been somewhat thwarted by EU regulations which require some non corporate business aviation operators to engage in carbon trading regardless of the relatively small amounts they actually emit: "We've really got quite a bad situation where on the commercial side if you emit less than 10,000 tonnes, you will be excluded from emissions trading which is absolutely fine. But if you are a non commercial corporate operator, even a US operator coming to Europe for one flight then you will have to offset your emissions. What we're trying to do is get a simplified procedure in place for those that emit less than 10,000 tonnes."
Lobbying the EU to get a fair deal for business aviation operators is a major part of Humphries' role. The EBAA is heavily involved at a consultation and lobbying level with the drafting of new legislation governing business aviation operators - including the Single European Sky initiative and the reviewing of current security rules affecting the sector by the European Aviation Safety Agency (EASA). The organisation is keen to ensure that European legislation takes into account the different requirements of business aviation operators from those of their commercial counterparts.

This, he says, is particularly true when it comes to issues such as security. The EBAA is currently lobbying the EU commission to introduce new legislation that would improve the security on business aircraft while ensuring that the blanket security rules covering commercial airlines is not extended to business aircraft: "What happens now is that there are no security rules for non commercial aircraft. But airline rules do not work for business aircraft. We can't have a situation where there are male and female dedicated handlers for just three or flights a day. So what we've said is that there should be a lighter touch on security for corporate operations. For smaller operations, aircraft up to 15 tonnes you don't need the heavy-handed touch. And where you do think there should be screening you should be able to use other staff trained in screening. We train pilots to do basic servicing so why shouldn't we train engineers to do basic screening?."

While the examples of security legislation and environmental legislation show the clear differences between the business aviation and commercial airline business models, the two share a common threat in the form of the global economic downturn, which has seen passenger traffic fall by around 20 percent across Europe. Humphries says the European business aviation industry in Europe experienced a three percent downturn in the latter part of 2008 - following a year in which it had grown at 10 to 15 percent.

Passenger traffic, he says was down by 24 percent in February compared to the same period last year. "Passenger traffic was growing but now it's taken quite a significant downturn," he says.

"The top level activities still continue. The corporate flying and the top level people with the big aircraft. That hasn't seen as much of a downturn as the bottom end of the market which is more price sensitive," Humphries goes on to say. "The US market has probably taken a bigger downturn than we have. So for instance you look at the traffic going into Luton it's down 30% (from the US)," Humphries goes on to say, adding that the manufacturers of business aircraft have been particularly badly affected by the downturn. Job cuts have been widespread across the industry with Gulf Stream cutting 1,200 jobs, Cessna, 5000 and Hawker Beechcraft, 1,200. "There are tough times ahead, uniquely tough times. The manufacturers are suffering because people are cancelling orders and walking away from orders. It's true that they did have a very big back log. But you only have to look at the number of people that have been laid off to know that these are tough times," says Humphries.

However, he believes the business aviation sector has distinct advantages over commercial airlines, not least the fact that business aviation operators tend not to own the jets they are chartering and as they don't sell seats on the planes they are not affected by the number of passengers they are carrying.

"The huge difference between airlines and business aviation operators is that we don't sell seats, we sell the aircraft as a whole. The passenger pays their set price then we don't care if they put two passengers on board or eight.Also we optimise the schedule of the aircraft to the demands of the passenger. Whereas with airlines the passengers fits around their schedules."

Humphries believes that even in a time when businesses are tightening their belts there is still room in the European aviation market for business aircraft. "I don't think we compete with the commercial airlines," says Humphries. "Business aviation is all about getting to your destination faster than the competition.  If you are travelling as a team, to a destination that is not well served or to multiple destinations, then that is what business aviation is all about."
He goes on to say that the financial woes affecting commercial airlines, could create greater demand for business aircraft: "Airlines are cutting routes and services. So actually the need for business aircraft is likely to increase rather than reduce because the quality of the airlines' services is falling." He does however acknowledge that while airlines may lose out when it comes to speed, they still have the edge over business carriers at Europe's airports where commercial operators are given priority.

"The facilities at the airports are fine," says Humphries. The biggest concern we have for the future , when growth resumes is access to the airports and making sure we get fair and equitable access. The problem is that sometimes we can't get in." The reason for this, he explains, is that business aircraft don't have "grandfather rights" at Europe airports, meaning that they do not have a right of access to certain slots even if they have been flying to that airfield for a long period of time, unlike commercial airlines. Giving the example of how this effects business carriers at the UK's Luton Airport, Humphries says: "Although we make up more than 20 percent of the traffic at Luton we can get pushed out. Whereas if an airline has been operating to that airfield for a long period of time, it has a right of access to those slots."

The EBAA is lobbying the EU commission to reconsider these rules and to treat business aircraft at airports - not in terms of individual operators but in terms of an entity that should be entitled to regular slots. Greater access rights at Europe's airports is more important than ever before argues Humphries, given the increasing popularity of business aviation and that fact that the advent of lighter aircraft means it is no longer just a "rich man's toy".

Lighter aircrafts mean travel by business aircraft is now an affordable options for many more companies, claims Humphries: "I would say that the advent of the very light jets has made business aircraft more available for lower management. The the new products we've got give customers a much better choice. People can charter say a Falcon 2000 which costs around €4455 an hour or at the lower end, a very light jet which would only cost about €1670 a hour."
The democratisation of the private jet industry through the availability of lighter, cheaper aircraft, means business aviation operators could soon be giving airlines a run for their money.

And with many European commercial airlines slashing routes, cutting staff and facing possible collapse, business aircraft could become the first choice for companies wanting to stay ahead of the competition. "The importance of time is what drives demand for business aircraft," says Humphries. "It's for companies that need to be there in the right place and at the right time to do business."

Failure to launch

Brian Humphries on the demise of the business-class only airlines MAXjet, Eos Airlines and Silverjet.

"The reason why these airlines failed was because of bad luck and bad timing and a combination of old fuel thirst aircraft, high fuel prices and an economic downturn.  Of course the fuel price nearly killed them because they used quite old aircraft that were quite thirst and that's what really killed them. "

"Also it co-incided with the economic downturn and the fact that a lot of people downsized.

"It's important to remember that these aircraft were not business aircraft they were all-business scheduled flights. It was only if they filled the seats that they had a chance of making money. "

The Single European Sky initiative

The SES is a European Commission initiative, which aims to harmonise the airspace throughout the EU and move from airspace management along the lines of national boundaries to functional airspace blocks.

This would tackle some of the problems caused by the existing system of air traffic management, which includes air traffic control boundaries that follow national boundaries and having large swathes of European airspace reserved for military use when this is not in fact required.

Humphries says: "The most exciting part of the Single European Sky is the introduction of satellite based navigation. This is going to open up a lot of secondary airfields to us where we'll be able to operate in all weathers. We're very excited about this initiative and we've been involved in it right from the start."