Everything In Moderation

            Economic down times have recently been plaguing the business world for the better part of the past decade. Everyone the world over has felt the tightening of the purse strings in one way or another. Due to some unprecedented, and somewhat freakish, circumstances the business aviation world has taken a few more substantial “lumps” that most other industries. The arrival of the automotive industry CEOs to Congress to request a ridiculously large loan in individual corporate jets was the spark that ignited the wildfire. An image of over-indulgence and distasteful disregard for others has become the bull’s eye painted by the media on the side of America’s corporate jet. Even President Obama declared that “corporate jets” should not get tax breaks in one of his recent presidential debates. This negative fallout has led the business aviation industry to begin to build a new image, and could be an opportunity to generate a better public understanding of the value of corporate aircraft operation.

            The question “is corporate aviation really valuable?” can be difficult to answer. Recent analysis shows that roughly 300 of the current Fortune 500 own private aircraft. It is also safe to assume that nearly all of these companies have used private aircraft for business at one time or another. Yet, is aircraft ownership part of these companies’ success or a result thereof? In a recent article, Forbes writer Catherine Smith identifies the answers given by successful corporate jet owners. These benefits included efficiency, client relations, business opportunity, confidential environment, market access, and convenience (Smith, 2010). The ability to take-off and land at the convenience and necessity of the executive, as opposed to a scheduled flight, allows for less time wasted waiting for crowds and more time working directly on business matters, resulting in an actual reduction in travel expense. The confidentiality of the private cabin allows sensitive topics to be addressed while traveling. In addition, the ability to land in locations that larger passenger aircraft cannot affords more time, new business opportunities, and better client relations. When a company is able to operate its own aircraft for movement of products, it is also better able to determine where these products will be manufactured. This allows for a wider range of locations to set-up crucial and competitive essential operations. The benefits are obviously many and great. It would appear that President Obama agrees with this now too, as he recently extended the accelerated depreciation program for business jet purchasers (Trautvetter, 2013). The accelerated depreciation program allows companies to defer tax payments on large investment items, such as aircraft, in hopes of boosting business activity, and thus the economy. Apparently there are a number of direct advantages that companies can find in business aircraft ownership, but public does not seem to mirror these realities.

            Perhaps the public relations managers within the business aviation field feel that time will heal all wounds better than a public imaging campaign. Though there have not been any noticeable marketing efforts on behalf of the corporate aviation industry related to imaging, there are some interesting image-related items out there. After a Google search, I found an instructional document developed by the National Business Aviation Association for high-level managers designed to help them field questions concerning why his/her company utilizes private aviation (National Business Aviation Association, 2013). I find it rather comical to think that a high-level manager may need coaching on how to explain a business investment, but the document exists. The fact that I found this so easily makes me wonder if this document might do more harm than good. Author John Madslien of the BBC interviewed a London based private jet company, Harrod’s Aviation, where the executives assured him that jet leasing is about utility as opposed to luxury. A difficult idea to accept, he points out, with Rolls Royce cars parked out front and champagne filling the aircraft’s fridge, a point that the industry might do well to address (Madslien, 2012). This non-approach could be working out just fine for business aviation as a whole, however, as recent sales numbers have shown a steady increase. In Bombardier’s business aircraft market forecast the number of business jet orders have doubled every year since the fallout of the auto executive brain lapse. These numbers, however, are from the zero orders mark, which was reached in 2009, actually less than one third of the sales made in 2007 (Bombardier, 2012). It seems to me that a few commercials, perhaps sponsored by the NBAA, illustrating the benefits of the corporate aviation industry could possibly gain some public credibility maybe even a few more sales.

            Overall, it seems that business aviation has a real place in the world today. Private aircraft ownership affords business advantages that make it a profitable venture. As is so often the case, the actions of an irresponsible few have affected the group as a whole. It makes sense that we all might do best to temper our judgments, lest we respond to something irrationally. Three months ago, the President said that business jets should not get tax breaks, and three weeks ago, he signed tax breaks for business jets. It will be interesting to see if the business aviation elite might begin to administer some public image CPR, or just let the wound go without addressing it.

References

Bombardier. (2012, n/a n/a). Business Aircraft Market Forecast 2012-2013. Retrieved February 10, 2013, from Bombardier.com: http://www2.bombardier.com/en/3_0/3_8/market_forecast_BA/BBA_2012_Market_Forecast.pdf

Madslien, J. (2012, July 1). Private jet sector rejects image of opulence. Retrieved February 10, 2013, from BBC.com: http://www.bbc.co.uk/news/business-18610418

National Business Aviation Association. (2013, N/A N/A). Explaining Why Your Company Relies on Business Aviation: Questions and Answers. Retrieved February 10, 2013, from NBAA.com: http://www.nbaa.org/admin/policies/why/

Smith, C. (2010, July 7). Advantages of Flying On Private Aircraft. Retrieved February 10, 2013, from Forbes.com: http://www.forbes.com/sites/wheelsup/2010/07/20/advantages-of-flying-on-private-aircraft/

Trautvetter, C. (2013, January 8). U.S. Extends Bonus Depreciation For Business Aircraft. Retrieved February 10, 2013, from AIN.com: http://www.ainonline.com/aviation-news/ainalerts/2013-01-08/us-extends-bonus-depreciation-business-aircraft