Friday, February 3rd, 2012
Business aviation has had a lousy few months, at least in its largest US and European markets; to name a few, Obama’s private jet taxes, Hawker Beechcraft’s woeful results, new emissions taxes enforced in Europe, and with the backdrop of economic uncertainty continuing to stifle demand. But two high profile events either side of the Atlantic just now show a certain resilience from users.
In the US, for Super Bowl XLVI, Indianapolis International Airport expects to set a record for the largest number of jets ever to fly in and out for the big game. That’s some record – football and private jets seem to get on well in the US, even in the worst of economic weathers. Back in 2004, 400 jets flew to Phoenix. Last year, 600 flew to Dallas. This time round we already know Mayor Bloomberg is flying in private. Could we imagine the likes of Boris Johnson doing the same?
Still, the Europeans have held up their end of the industry at Davos (even if the users themselves may not be European). Zurich and its surrounding airports were overwhelmed for parking spaces form incoming dignitaries on jet. And then from the airports they flew in by helicopter. The Occupy movement braved the sub zero temperatures but can’t have had much luck, penned in as they were by the train station…
Friday, February 3rd, 2012
The EU’s police organisation Europol has been aware for some time that small aircraft were being used to smuggle drugs, both within and across EU borders. In its annual Organised Crime report last month, it reported a notable rise in the use of private aircraft to facilitate illegal immigration, smuggle victims of human trafficking, and to traffic firearms, diamonds and bulk cash shipments for money laundering.
Many of these trips are now apparently being made between North Africa and locations in south west Europe. The flights are difficult to detect; flying in under radio silence, light aircraft and helicopters can access a huge variety of remote and impromptu air strips. These appear to be highly organised operations, with cargo swiftly dispersed after disembarkation.
Other inbound trips are coming from further afield. In January, Spanish authorities in Barcelona seized an executive jet from Argentina this month that was carrying about 2,000 pounds of cocaine. The operator is an Argentine company, Medical Jet, which specialises in private medical transfers. Argentine military officials and politicians may have been involved, and deeper connections link to Colombian and Mexican drug cartels.
Until now, EU authorities have struggled to address the opportunity for this kind of exploitation. Much of this derives from inconsistent general aviation regulation and monitoring and sanctions, state to state. More than half EU members, for example, do not withdraw pilot licences following a drugs conviction.
In response, the EU is looking to create a more centralised response. Through project AVIA, Belgium, France, Netherlands and the UK will share intelligence on high risk profile airstrips. There are recommendations to review and upgrade flight monitoring and sanctions, as well as to improve intelligence sharing between military and civil aviation.
Europol will no doubt be impatient for actions to follow committees, reviews and recommendations. The problem is that besides the obvious challenge of coordinating multiple crime agencies across 27 states, the business aviation industry is heterogenous to say the least; over 800 independent operators manage Europe’s fleet of 2,000 aircraft, which fly over 600,000 sectors each year. What’s more, many of these aircraft (obviously the helicopters) can land in thousands of locations.
Sunday, January 29th, 2012
The Brussels rumour mill is whirring like mad with speculation on the new head of the Association of European Airlines. The hot rumour is the current head of the European Airports Council, Olivier Jankovic. He would certainly be a change. I once spent some time discussing with him what is good lobbying and how does one go about it. On one thing he was sure, ‘Lobbying is not just writing a letter’ he said.
That has me to thinking about what is good lobbying. There is an excellent blog – The Thoughtful Campaigner – http://thoughtfulcampaigner.wordpress.com/ which recently pondered the same thing. He cites there a recent paper that puts forward three things that are vital: Strong Leadership, Time, and Robust Evidence.
That seems like a very good place to start. Now play those criteria against most of the airline/aviation campaigns you have seen recently…
Play those criteria against the work Aviation Advocacy does too of course. I think there must be other things, such as good writing, and pursuasiveness, but no-one can deny the importance of these three.
Wednesday, January 25th, 2012
So there we have it, the first step in the New Year Resolution process, one last little thing: if you look under “Links” on the right you will see one about a speech in Oslo. This is a good example of what Aviation Advocacy is about.
Wednesday, January 25th, 2012
December 4:
Slightly anticipating the northern hemisphere’s darkest day of the year, we have a report which indicates that business aviation may at last be out of the trough and on the long road to recovery. However, just as there are many grim days which follow December 21st before spring arrives, Forecast International projects a long and rocky road to good health. In fact, next year’s business aviation sector is set for continued stagnation, with real growth not coming until 2013. And guess what, 2008’s record delivery of 1,300 jets is not forecast to be equalled until 2018!
Throughout the industry’s tortuously long recession, the pain has not been spread evenly. At the ‘bottom’ end of the market, the light jet manufacturers and operators have seen their customer base wither in the cold economic climate. In contrast, the top end of the market, featuring the largest and most expensive jets, has flourished in the glow of growth in the global ‘super wealthy’ bracket, especially in BRIC markets. This imbalance was reflected last week: Hawker Beechcraft have shelved the Hawker 200, their latest assault on the light jet market (expect HBC to add to the 800 layoffs already this year), whilst Bombardier have posted 30% quarterly profit increase and has dominated the headlines this year with orders for its luxury long range Global jet series.
Wednesday, January 25th, 2012
October 27:
The ‘very light jet’ revolution announced 5 years now seems very distant and rather absurd. This week came the news of Piper’s cancellation of its Altaire, the planned $2.5m jet upgrade to its market leading piston fleet. Piper is wisely cutting its losses on a taxi jet market which remains unproven. Diamond Aircraft’s re-launch of their VJL D Jet might buck the trend but their investors will take note. Cessna have meanwhile switched focus from the Mustang taxi (which has bled dry many an operator) to the recently launched M2, responding to customers’ need for comfort and speed rather than pure price. The traditional operator business model – mixed fleet of aircraft managed on behalf of 3rd parties and chartered to customers through broker intermediaries – is everywhere prevailing. Just look at Hangar 8’s results. Revenue is up 67% to £18m and it’s only ever played by the tried and tested rules.
Wednesday, January 25th, 2012
October 20:
For several years now, Avinode has dominated the development of online market places for private jet charter transactions. 18 months ago the Gothenburg-based business snapped up its only major rival, US competitor Charter X. Avinode’s core product is its instant pricing and flight time calculations for over 3000 aircraft logged on its system by its user operators. Using this database, charter brokers quickly identify potential carriers for their customers, whom they then contact directly to negotiate availability and pricing.
Avinode generates its revenue from the membership fees paid by its subscriber operators and brokers. Its growth has been self-fulfilling, as its increasing membership has created an ever stronger argument for new operators and brokers to affiliate and interact. Much of its database is indicative not actual; operators do not provide Avinode with guaranteed pricing or availability (although some operators now provide dynamic inventory). Once brokers have identified potential lift, Avinode plays no part in the rest of the transaction.
Charter brokers still almost completely dominate charter inventory purchase, and without any rival offering a transactional platform for them to do so, Avinode is still peerless in the B2B market. Its Achilles heel is in the emerging B2C channel. Lagging well behind the wider travel industry, bizav-dedicated online platforms are finally bringing effective search and booking platforms to customers, linking them directly to operators and cutting out the brokers. So far their impact is small (PrivateFly.com is the largest and generates a few hundred flights only), but the long-term threat to the broker market (read high street travel agent) is also a direct threat to Avinode.
Hence Avinode’s much publicised announcement at NBAA 2011 that it is now offering its brokers a white label B2C platform of their own, which they can use to compete with the likes of PrivateFly. Effectively, Avinode has gambled on sticking with its broker-membership business model, hoping that by extending its B2B market place to consumers via its brokers, it will maintain its key customers’ livelihood and their willingness to find operators on its platform. The risk is that both Avinode and its brokers all rely ultimately on the jet user, and if that customer decides that brokers no longer offer the best access to private jet booking, Avinode will lose its indirect control of this customer and with it its income stream.
Wednesday, January 25th, 2012
October 3:
It was in February this year that PrivateFly was awarded travel website of the year and described by the judges as the iTunes of aviation. The comparison is a bit of a stretch, beyond the basic business model of aggregating availability through a single online platform. But the business aviation industry is so lamentably old fashioned in its channels to market – especially B2C, still largely dominated by hundreds of independent brokers – that PrivateFly’s trip search, pricing and booking platform has been making a splash since it launched in 2008. Most of its business-to-date has booked offline, partly because charter flights are pricey and by nature often complicated, requiring a friendly and expert discussion. In part, too, PrivateFly’s website hasn’t yet developed the usability and sophistication to manage the typical business jet user’s concerns and queries. A number of competing ventures have meanwhile launched to be the first genuine equivalent of an expedia in business aviation – FlyRuby, FlyVictor and US-based Social Flights come to mind. But PrivateFly still leads the field in brand recognition, and as of last week procured the funding – £2m from 8 investors – that might allow it to prove its potential. A major target will be smart phone presence – PrivateFly’s challenge is to achieve a seamless and constant intermediation between operators’ spare capacity and marginal pricing, and users’ dynamic demand for trip quotes and booking.
Wednesday, January 25th, 2012
September 15:
It’s been a dismal 24 months for London’s already overcrowded business aviation operators. But there’s sunshine on the horizon in the form of the 2012 Olympic Games. The Games were promoted as a regeneration project to benefit ordinary Londoners, but we’re all old enough to know that the best seats in the house will go to international dignitaries, business big wigs and a circus act of celebrities – with the means and the taste for touching down in the UK in style. There has been much concern in the bizav community over the likely restrictions to their operating airspace (from July 13 to September 12 2012, there will be an inner prohibited airspace zone and an outer restricted zone, about 60 nautical miles across, centred on the Olympic Park). But the UK Government has at least this week granted approval for a number of general aviation airports – including Northolt, Cambridge and Southend – to be open around the clock. The race for slots at these locations is set to begin imminently. Given that rock-stars don’t keep tidy diaries, operators might need to take some gambles on bookings. The real gainers could be the FBOs, who will charge premium pricing and non-refundable deposits.
Wednesday, January 25th, 2012
September 12:
Biggin Hill has hosted the annual Very Light Jet conference over the last 5 years. At its inception this was a glamorous event, with dot com promise of the disruptive and dramatic entry of taxi jets into the business aviation world. Almost all the aspiring start up operators who presented then are now out of business, with only the best funded (like Blink) and the best operated (like Globair) still limping along. Hubris exposed, their VLJ podium has now been rebranded as ‘Business Aircraft Europe’. That allows many of their detractors to attend – that is, their more traditional jet charter competitors, who are hardly thriving but at least they didn’t announce a revolution in air travel on CNN.
Not all is dead or dying in the air taxi business however. A more recent start up in the US, Jet Suite, was founded by seasoned pros of the aviation world like Jet Blue founder David Neelemen. They operate the much praised Phenom 100 (with hindsight a better choice than Blink and Globair’s Mustangs). Jetsuite now operates across the US, Canada and Mexico, has tied up with Singapore Airlines to link low cost jets to first class airline passengers, and its most recent boost has come from the founder of Zappos (online shoes), Tony Hsieh. He says that his $7m investment is primarily an investment in the revitalization of downtown Las Vegas, which with JetSuite is now a short and hassle-free hop from Silicon Valley.