Corporate flights down 25%, while used aircraft sit on market PDF Print E-mail
Tuesday, 14 April 2009 10:41

The National Business Travel Association (NBTA) reported this month that corporate jet travel is down 25% since December, 2007. NBTA conducted a survey among business travel buyers late in 2008.

Businesses reported a $140-175 increase per trip domestically, and upwards of $400 increase on international trips. The result has been alternative travel methods, or meetings conducted online rather then the costly trip. In fact, according to the survey, 56% of companies surveyed reported taking cost cutting measures when it comes to business travel. This has become aparent in the aviation industry. Small business are being affected by the increasing price of air fare at the airlines, while large corporations are being pressured away from the use of private jets. The Federal Aviation Administration (FAA) reports that air taxi operations are down 18% nationwide since 2005, while general aviation operations are down 30%.

Meanwhile. the number of aircraft for sale is ever increasing while prices are slowly falling. Corporations like AIG and Leehman Brothers, who received bailout funds, have dumped thier jets for millions less than what they paid for them, at public and government pressure. Even companies who have not taken any bailout money are closing down thier aviation programs for fear of public perceptions, flooding the market with used corporate jets.

"We're hearing stories that people are very concerned about flying to Washington, because of the potential for being targeted by the media and the politicians" John Meehan, general manager of Landmark Aviation at Washington Dulles airport, told National Public Radio.

The industry crisis has sparked action from the National Business Aviation Association (NBnpng_copy9AA). CEO Ed Bolen has lauched his "No Plane, No Gain" campaign aimed at convicing Washington that there is a place for business avaition. Bolen recognizes that business aviation contributes $150 billion into the U.S. economy with more than 1.2 million employees (www.noplanenogain.org). Another misconception of business aviation is that every corporate flight is a pleasure cruise for CEO's. An NBAA survey found that 86% of business flights are made by mid-level employees. It is simply cheaper, once air fare, time spent in airports waiting to board, deplane, waiting on luggage, etc, are all calculated, for the businessman to fly privately than to take an airline. The use of a private jet also allows the passenger to continue working, via phone or internet, while airborne. The NBAA says that companies that use private aircraft, return more to their shareholder than companies who do not.

"Business aviation is a fundamental part of our nation's aviation system, but there's a lot about the industry that's not well-understood" Bolen said at a FAA forum in late March. "[Business Aviation] provides a lifeline for the many communities across the country that have little or no airline service" continued Bolen.

Last Updated on Thursday, 16 April 2009 12:05