Travelling in style

Despite businesses being buffeted in this period of economic turbulence, Dave Jackson says corporate air travel can reach new heights.

“No one wants to own up to being the guy responsible for the €25 million corporate aircraft sitting on the balance sheet and doing five hours a month flying”
-Dave Jackson

Can businesses justify VIP/corporate aircraft in today's economic climate?

Dave Jackson. This is not really a new question, but is a question organisations should be asking themselves all of the time. Today's global recession has raised the profile of the question again, as many companies lay off employees in a bid to restore their trading position – any sign of a frivolous or unjustified expense is being examined, amongst those the corporate aircraft. We believe the case for efficient use of point to point or shuttle travel remains as strong as ever and more so as some regional operators cut back on their routes, forcing certain clients back to a less efficient hub and spoke travel pattern.

In the current economic climate rapid communication with employees, clients and other interested parties is best done face to face and this can be done efficiently and cost effectively with a corporate aircraft, especially in a multi-site/multi-location environment. Having said that, there are expensive and less expensive ways to get from A to B to C and back to A.

New corporate aircraft are not a necessity, used aircraft or used and refurbished aircraft offer great value. Travel within regions, such as Europe, US and the Middle East, can also be achieved very cost effectively in high specification refurbished aircraft coming from the regional airline sector such as the BAE 146, CRJ and of course the Dornier 328. These aircraft have been built specifically for heavy duty regional use, are well supported and reliable, with a ready stream of qualified pilots and mechanics.

An ex-regional aircraft with full size cabin and a beautifully refurbished bespoke interior can be far more cost effective than a glamorous "pocket rocket". Given crowded airspace and tight airport slot positions, speed is not always an advantage, certainly not for one- to two-hour flight sectors. In summary, there is still very much a place for the corporate aircraft and it can fully justify its existence and future use.

What is the future for long haul, such as intercontinental corporate jets?

DJ. This is not an area we at 328 Support Services are heavily involved in, however I can offer a personal view. Beyond the need for head of state or government delegations with particular security needs, it is hard to see how today's full service Business Class and First Class service offering from the major airlines can be beaten on a cost per kilometre/mile basis.

The major airlines continue to support all of the most important intercontinental destinations and airlines such as Lufthansa and Emirates continue to develop that network. I believe international long haul on a major airline, perhaps complemented by a local corporate jet network such as NetJets, is probably a more cost effective solution, certainly in the case of organisations with multiple travel requirements but perhaps only one or two aircraft. Within a region corporate aircraft can be repositioned much more quickly and cheaply, dead legs are less costly and on occasion could be dovetailed with scheduled airlines or a "by the hour" provider.

Will fractional ownership replace "by the hour" usage models as the way forward?

DJ. We believe both have a place and certain advantages dependant on specific circumstances. As I said earlier, all forms of spend, especially if it might be classified as "ostentatious" will be clamped down up, no one wants to own up to being the guy responsible for the €25 million corporate aircraft sitting on the balance sheet and doing five hours a month flying. However, there are some great value propositions available now, and again there is a case for the corporate aircraft, either shared amongst geographically co-located businesses or individuals. The fractional model works especially if supplemented by ad hoc charter. The "by the hour" model exemplified by the likes of NetJets, avoids the balance sheet challenge and for low time users is probably still the best way forward. The answer to both points is somewhat based on what you are comparing to. If you have a low cost, well specified or refurbished ex-regional jet it could be that over a reasonable lifetime it is cheaper to own or part-own than rent.

Dave Jackson, Chief Executive Officer 328 Support Services GmbH, has over 25 years of experience in the aviation industry since graduating with BA (Hons) in Marketing (Engineering) in 1984. His background has been Sales and Marketing and General Management with a strong emphasis on business improvement and turnaround within global multi-division/multi-site environments, with companies such as Lucas Aerospace, Aviall Inc., and Hunting PLC.