Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN

DEVELOPMENT OF BUSINESS AVIATION AT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN

Pero Selak, dipl. ing. Josip Paljetak, dipl. ing. Miho Drobac, dipl. ing. Dubrovnik Airport Zračna luka bb, HR - 20213 Čilipi, [email protected], [email protected], [email protected]

ABSTRACT

This paper will analyze the general and business aviation traffic at the Dubrovnik Airport. There will be statistics about the movement of general and business aviation at the airport, to define key parameters and detailed explanation of their movements. Pursuant geotraffic position of this airport, there will be made a comparative analysis of the defined parameters with the same parameters of competing Mediterranean airports (Split, Tivat, Nice, Venice Olbia and Trieste). Based on the research will be adopted development guidelines for business aviation on Dubrovnik airport.

1 INTRODUCTION Dubrovnik Airport is situated on the southern part of Croatian, 13 km southeast of Dubrovnik. With a turnover of 1,200,000 passengers a year, this airport is the second largest in Croatia. It is assumed that the gravitational area of the airport covers a circle radius of 200 km. It includes the area of Dubrovnik – Neretva County (HR), region of Herzegovina (BiH), area (BiH) and Herceg Novi area (MNE). Total area is inhabited by 380,000 residents. For the development of this airport it’s especially important Dubrovnik – Neretva County, because of touristic potential. There are 43,000 beds for tourist accommodation of which 15,000 beds in hotels. In 2009 same county was visited by 957,229 tourists who accomplished 4,324.498 overnight stays in all types of accommodations [4]. Business aviation is defined as all kind of aviation other than military and commercial aircraft liners. It provides more than a billion dollars of business activities, providing employments for more than one billion people, economic growth for thousands of cities and business entities all over the world. There are more than 320,000 business aviation aircrafts in the world. These aircrafts range from light two – seater training planes to transcontinental private jets. In the United States 223,877 business aircrafts have been registered since 2009 [12]. Here business aviation participates in economic activity with more than 150 billion dollars, in same time provides more than 1,265,000 working places [13]. It is important to point out that more than two thirds of general aviation flight hours are achieved in business purposes. The goal of business aviation is to provide efficiency, practicality and attainability.

1 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN 2 ANALYSIS OF GENERAL AVIATION AT DUBROVNIK AIRPORT FOR THE PERIOD FROM 2008 TO 2010 WITH EMPHASIS ON BUSINESS AVIATION Dubrovnik Airport annually handles approximately 6,000 general aviation passengers and has an average of about 3,400 operations related to general aviation. Compared with year 2009 when 4,200 passengers were served, in 2004 total 9,900 passengers passed through. The reason for this fall could rely partly to the economic situation that happened as a consequence of the global economic crisis. Table 1: Total number of operation, passengers and type of aircrafts at the Dubrovnik Airport

YEAR 2008 2009 2010 TOTAL NUMBER OF OPERATIONS 3382 3300 3267 TOTAL NUMBER OF AIRCRAFT BY TYPES 115 164 174 TOTAL NUMBER OF PASSENGERS 5284 4200 5879 Source: [1]

Accelerated development of general aviation which includes business aviation traffic at the Dubrovnik Airport as well, begins in year 2003, when the number of operations started to increase rapidly. In these operations total number of 5,141 passengers was recorded with maximum of 9,900 in 2004. As a consequence of the economic crisis in 2009 the number of passengers declined to 4,200. In 2010 the positive growth continued and the number of passengers reached 5,879. The 95% of all flights that concern business aviation at the Dubrovnik airport is achieved during touristic season. The rest of the flights are related to transit (technical landing) and training flights. This analysis gives us an overview of the operations by the type of plane and number of passengers for the business aviation and other general aviation in the period from 2008 to 2010. The number of different types of aircraft has been increased from 115 in 2008 to 174 in 2010. In the same period there has been a slight decrease in the number of operations. From a financial point of view this reduces the incomes of the takeoff, landing and handling operations. All these changes are shown in Table 1. Table 2 shows the number of different types of aircrafts according to maximum weight of take – off, that visited Dubrovnik Airport in the period 2008 to 2010. During this period there was an increase in the number of aircrafts with maximum takeoff weight between 2,250 and 5,700 kg, also increased the number of aircrafts with maximum takeoff weight between 25 and 50 tones. Dubrovnik Airport annually serves over 1,200,000 passengers. There are about 15,100 landing and takeoff operations (about 11,800 operations achieved in international traffic and about 3,300 on domestic flights). The 21% of the total number of operations applies to general and business aviation (2,200 in international traffic and about 900 on domestic flights).

2 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN

Table 2: Number of general and business aviation aircrafts for the period from 2008 to 2010 NUMBER OF NUMBER OF NUMBER OF MAXIMUM WEIGHT AIRCRAFT IN 2008 AIRCRAFT IN 2009 AIRCRAFT IN 2010 0-2250 KG 47 71 76 2250-5700 KG 16 30 37 5700 KG-10 T 21 27 26 10 T-25 T 26 29 23 25 T - 50 T 3 7 10 over 50 T 2 0 2 TOTAL: 115 164 174 Source: [1]

According to data from 2010, the number of general and business aviation passengers was 5835. That is only 0.5% of the total passenger traffic at the Dubrovnik Airport. Chart 1 shows the general and business aviation ratio of the number of operations and the passengers in year 2010.

Chart 1: The ratio of total operations and passengers in business and general aviation at the Dubrovnik Airport in 2010 [1] Table 3 shows the comparison of business aviation traffic during the tourist season (June, July and August) since 2008 to 2010 year. The table also shows number of passengers in domestic and international arrival and departure. The total number of arrivals and departures on domestic flights for the last three years is 525 arrivals and 446 departures. In parallel with international traffic, where is achieved 3,792 arrivals and 4,059 departures. These data demonstrate the importance of international business aviation traffic at the Dubrovnik Airport. The reason for such large difference between domestic and international arrival/departures is increased interest in Dubrovnik and the surrounding area as a tourist destination. Economic crisis that hit the Republic of Croatia had a direct impact on local traffic and is cited as the major cause of falling turnover.

3 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN

Table 3: Comparison of business aviation operations in the domestic and international traffic

The number of operations on domestic flights The number of operations in international traffic 0-2.3t 2.25 - 5.7 t 5.7 - 10t 10 - 50 t 50

3 BUSINESS AVIATION IN EUROPE AND THE WORLD According to ICAO (International Civil Aviation Organization) the general aviation operation is defined as: “An aircraft operation other than a commercial air transport or an aerial work operation”. In year 2010 total 2,015 aircrafts were delivered around the globe. The most of them were delivered with piston engine (889 aircrafts), 363 with turboprop engine and 763 with turbojet/turbofan engine. During last couple of years, the markets outside of North America continued to hold promise for further development of industry growth. In 2010 42.1% of business jet deliveries went to North American customers, as compared to 49.4% in 2009. Europe accomplished 22.8% of shipments in 2010, Latin America followed with 14.3%, Asia Pacific with 11.8% and the Middle East and Africa with 9.0%.

4 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN Business Aviation is a service of traveling from one point to another without necessity of transfer to other planes. This creates a time savings in relation to travel commercial aircraft, but it also increases the number of operations on a large number of small airports. Only 30% of business aviation operations refer to airports with more than 100 IFR departures for day [2]. Network pairs of airports connected with business aviation lines have 100,000 links, three times more connections than the commercial line network. Business network carries much less traffic, on average 40% of the time they fly empty planes to client services [3]. Business Aviation is not doing competition for passengers with a higher grade of regular lines, but it fills a gap in the distribution services operating flights between cities that are not connected with regular lines. There are over 30,500 business aircraft driven by jet engines. With a share of 28% (8,505 aircrafts) Hawker Beechcraft is leading company, followed by the Cessna with 27% (8,172 aircrafts), and Bombardier with a share of 12% (3,792 aircrafts). Other companies participate with a share of 18% (5,380 aircrafts) [3]. Table 4: Operations of the business aviation traffic in Europe

Business Other Movements All Jet Piston Turboprop All in Europe Movements Growth Movements Growth Movements Growth Movements Growth Movements Growth ('000s) (%) ('000s) (%) ('000s) (%) ('000s) (%) ('000s) (%) 2006 708 11.7% 433 ¸14.1% 50 0.3% 165 8.9% 8.852 4.0% 2007 779 10.0% 554 12.3% 50 0.1% 174 6.0% 9.264 4.7% 2008 758 -2.6% 544 -1.8% 49 -2.6% 165 -5.2% 9.325 0.7% 2009 652 -14.0% 4643 -14.7% 46 -5.3% 142 -14.3% 8.761 -6.2% Source: [2]

If we examine the worldwide share of business aviation, then 66% of the airliners (20,135 aircrafts) is located in North America, Europe is second with 13% (3,959 aircrafts), while South America is third with 10% (3,196 aircraft). The remaining 10% airliners (3,297 aircraft) are widespread in the rest of the world. The rapid expansion of business aviation began in 2002. Around 550,000 flights were recorded in that year. That is about 6% of all flights in the ESRA ( Statistical Reference Area). The rapid growth continued till 2007 when the business aviation share rose to 10% (almost 780,000 thousand flights). This was followed by a sharp drop in 2008 as a result of the global economic crisis. The crisis continued in 2009 too and brought an additional drop of 15% in traffic which reduced the number of flights proportion to the number in 2005 (Table 4). Most of business aviation flights are made at distances shorter than 500 km, 45% of flights are less than 450 km and commonly used routes are between 250 and 350 km. The reason for the larger use of business aviation on the shorter distances is a large proportion of piston and turbo – prop aircrafts in business aviation fleet. It is interesting that 10.5% of the operations have been achieved over a distance of 2.000 km due to the proportion of jet aircrafts in business aviation fleet.

5 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN

Chart 2: Number of aircrafts in relation to the number of carriers [6] The business aviation market in Europe is divided between a large numbers of operators. The precise number is difficult to identify, but it's at least 700 operators. As shown on the Chart 2, operators usually have a single plane. It must be noted that this Chart does not include operators who are registered in Russia or the United States and operate in Europe. This means that a large number of individuals and very small business operators make the largest part of the business aviation industry. In the future the number of operators with large fleets will probably increase, because of the fact that some operators have large orders for new type of aircraft: very light jets - hereinafter VLJs. During the development of the most recent EUROCONTROL medium – term forecast, the likely growth of business aviation was predicted, taking into account past trends and the relationship with economic growth. The result thereof is a return to growth in 2010, stronger growth in 2011, and then around 5% growth per year (Graph 3 and Table 5). This is weaker growth than seen in 2004 – 2007, but still faster than that forecast for the main scheduled and charter passenger flows. The result of this faster-than-average growth is that business aviation’s share of all flights will gradually recover and should pass 8% by around 2015. Market in terms of demand for "air taxi" is spreading in Europe. The appearance of VLJs could result in a reduction of space for expansion of the turbo – prop aircraft "taxi". Total anticipated: 15% increase in European turboprop fleet for a period of ten years, from the base of 700 aircraft in 2007 to 800 turbo-prop aircraft up to 2018, with a slight decrease in the piston – powered aircraft. In the European fleet, which includes jet, turbo – prop and piston aircrafts, increase of aircrafts is expected to be about 4,600 units. This is about 3,000 more in relation to the 2007. It means a further 1,300 flights per day during the next ten years, mostly business jet aircrafts.

Chart 3: Medium – term forecast of traffic growth in business aviation [2]

6 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN Table 5: Forecast growth in European business aircraft fleet Jet Total European Business Fleet 2017 Europe Europea Worldwid as % of n Yearly Scenario e yearly new deliverie Replacemen Jet Turboprop Piston deliveries deliverie s over t Rate s ten years High Growth 1,400 20% 2,800 25% 4,000 850 400 Central 1,200 18% 2,100 28% 3,500 800 350 Forecost Low Growth 700 16% 1,120 33% 2,650 750 300 Source: [2]

4 ANALYSIS OF COMPETITIVE AIRPORTS is situated on the Adriatic coast in central , near the town of . It`s has been used mainly for a touristic purposes and annually serves 1,200,000 passengers (according to data for 2010 number of passengers was 1,219,741). Favorable factors for the development of business aviation at this airport are proximity of city of Split (25 km) and the Dalmatian islands. Also there is an ACI Marina with 364 berths and nearby Makarska Riviera which opens even more space for development. The advantages of this airport are category 4E equipment (ILS) CAT and the availability of fuel for general aviation. The disadvantages are small number of parking spaces for business aviation, insufficient capacity of runway with taxiways, the lack of a parallel taxiway and the required notice 48 hours ahead for business aviation flight. Tivat is located 4 km from the center city of Tivat in Montenegro, primarily serving travelers during the summer months when charter flights are taking place. Annual handle: about 600,000 passengers. Airport Tivat relies on tourist hotels offers and nautical tourism capacity. Table 6: Traffic at Nice Airport Table 7: Helicopters traffic at Nice Airport Traffic passengers Passengers traffic Traffic commercial Helicopter helicopters traffic Passengers Variotion 09/08 Variation Passengers National 4,040,314 -6.3% 09/08 International 5,790,673 -4.6% Heli Air Monaco 64,177 -25.8% Total 9,830,987 -5.3% Heli Securite 8,566 -15.8% Aircraft Traffic mouvements Azur Helicoptere 1,620 -50.7% mouvements Total 74,363 Mouvements Variation 09/08 Variation Mouvements Comercial aviation 104,700 -6.1% 09/08 Busines aviation 27,800 -16.9% Heli Air Monaco 22,757 -21.4% Helicopters 29,600 -21.9% Heli Securite 5,285 -16.8%

Source: [11] Azur Helicoptere 1,544 -39.3% Total 29,586 Source: [11]

Airport Tivat has a runway 4E category without an instrument approach, and only 7 aircraft parking positions for business aviation. As for the general aviation deficiencies, the lack of

7 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN Aircraft 100 octane gasoline for general aviation, airport traffic isolation and distance of 40 km to the coast is noted. Airport Nice (French: Aéroport Nice Côte d'Azur) is located 6 km southwest of the city of Nice in the south of France. It is main incoming and outgoing airport for passengers on the Cote d'Azur. Due to the short distance from the Principality of Monaco (18 km), it also serves as the main airport that connects the city Nice and the Monaco with helicopters. In 2009, passenger traffic increased to 9,830,987 passengers (Tables 6 and 7). Nice Airport occupies an area of 3.70 km2. Two parallel runways with capacity of 52 operations per hour occupy 2.70 km2. Apron for business aviation has 30 parking positions, and in the immediate vicinity are two heliports H1 and H2. The Marco Polo Airport is an Italian airport, which is located 4.3 NM (8.0 miles) north of the city of Venice. The airport is linked to the nearby railway station Venezia – Mestre and the bus station in Venice-Piazzale Roma, wherefrom there are bus services to several destinations in Venice. There is also a "Water Taxi" (Alilaguna water shuttle – blue, red and orange lines). The Venice Airport terminal has a surface of 79,200 m2. Last year this airport handled about 6.8 million passengers and had about 74,000 operations. The share of general aviation was 14,300 passengers or 0.20% and about 6.000 operations with share of 8%. Total 57 parking positions for large commercial aircrafts include 6 positions with air bridges and 30 positions for general aviation services with a terminal for business aviation. Olbia Airport is the second busiest airport in Sardinia (served 1,658,836 passengers in 2010 out of which 23,639 refers to the general aviation traffic). It is located 3 km southwest of the central part of Olbia and is easily accessible by private car or bus. The airport has one runway category 4E with instrumental approach CAT I and terminal for business aviation area of 1,600 m2. This airport has also 21 positions for the parking of commercial aircraft and 51 positions for business and general aviation. The airport Ronchi dei Legionari is one of the smallest airports in Italy. It is located near the city of Trieste. In year 2010 this airport had a turnover of 726,941 passengers and 15,131 operations. Concerning general aviation it has achieved a turnover of 3,662 passengers, making a share of 0.5% of total passengers and 36.8% (5,572) of all operations. This airport is a mirror of the region, located in area that has been a crossroad for different cultures. It is situated near the borders with Slovenia, Croatia and Austria, the nearest highway is only 2 km away, which provides quick connection to the nearby cities.

5 CONCLUSION Recently Europe has become more prominent place in the market of business aviation. Europe market in terms of commercial business aircraft orders had a significant jump from 12% in 2003 to 31% in 2008, boosted by strong euro against the U.S. dollar, significant economic growth generated by expansion of the European Union and the appearance of brand business jet charter operators. Growing business aviation installed in Europe will create a significant market growth in coming years and will ensure that this region continues to be a major source of demand for business aircrafts. The development of business aviation and other segments of general aviation at the regional airport Dubrovnik area depend primarily on capital investments. This airport can compete with airports in the Mediterranean, especially compared to Split and Tivat airports, which are very close. Benefits of Dubrovnik Airport in relation to Split and Tivat are runway

8 Pero Selak, Josip Paljetak, Miho Drobac DEVELOPMENT OF BUSINESS AVIATION AT DUBROVNIK AIRPORT AND COMPARISON WITH AIRPORTS IN THE MEDITERRANEAN capacity, the required parking spaces on the apron for aircraft business aviation, technical support and equipment for navigation. Compared with other airports in the Mediterranean area, the airport of Dubrovnik is lagging behind the others in terms of apron capacity for business and general aviation (22 positions for parking in relation to the Nice, which has 30, Olbia 50, Venice 30), absence of a parallel taxiway (Nica, Olbia, Trieste) and absence of a separate terminal for business aviation (Nice, Venice, Olbia). One of the possible measures of development is an investment in quality transport links between the airport and Dubrovnik region. The second measure relates to the increase of tourist content and pricing policy in order to prolong the tourist season. The third measure of development can be achieved by attracting capital aircraft manufacturers building adequate content to the airport in order to maintain and use as home port for certain business companies. In order to increase the traffic of the business aviation, Dubrovnik Airport in the long run should increase its capacity and build the previously mentioned infrastructure with which would become competitive airport in the Mediterranean. Also the development of business aviation at the Dubrovnik Airport is directly dependent on investments in the region. Poor road infrastructure directly affects the competitiveness of the region and the airport. Connecting the region with a high quality road infrastructure would make the opportunity for Dubrovnik Airport to become a key point in linking the business capital. This would increase the turnover of business aviation throughout the year and all of the total traffic at the airport.

REFERENCES

1. Statistical data Dubrovnik Airport 2. General aviation and air taxi – NUMBER OF ACTIVE AIRCRAFT by primary use, by aircraft type. General Aviation and Part 135 Activity Surveys - CY 2009. 3. General Aviation’s Contribution to the U.S. Economy, General Aviation Manufacturers Association Washington, DC 20005, May 2006. 4. Business Aviation in Europe 2009 – 2010, Eurocontrol Trends in Air Traffic, Volume 6 5. http://www.eurocontrol.int 6. http://www.flightglobal.com 7. http://www.dzs.hr (Državni zavod za statistiku Republike Hrvatske) 8. http://www.mint.hr (Ministarstvo turizma Republike Hrvatske) 9. http://www.coe.int (Council of Europe) 10. http://www.aeroport.fr/.com 11. http://www.aerostrategy.com 12. http://corporate.nice.aeroport.fr/Corporate/News-Media/Statistiques/Annual-Traffic- Reports

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