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Annual Review 2014-2015

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Annual Review 2014-2015 The Voice for Business Aviation in Europe Annual Review 2014-2015 Business Aviation in Europe: State of the Industry 2015 Done in collaboration with www.wingx-advance.com www.amstatcorp.com www.eurocontrol.int CONTENTS 03 Introduction 04 Overview • What is Business Aviation? • Sub-divisions of the Definition 05 The European Business Aviation Association • EBAA Representativeness of the Business Aviation Industry • EBAA Membership 1996-2014 07 State of the Industry • Economic Outlook 08 • Traffic Analysis • The European Fleet 09 • Activity Trends by Aircraft Types 10 • Business Aviation Airports 11 • Business Aviation and Safety 12 A Challenging Industry • Challenges from the Inside 1. Means of Booking a Business Aviation Flight 2. Positioning Flights 13 3. Fleet Growth Vs Traffic • Challenges from the Outside 1. Fuel Prices 14 2. Route Charges 15 3. Taxes Revenue per Flight Indicator 16 Looking Ahead: Projects for 2015 • Description of Projects 18 EBAA Members (as of 1 April 2015) 2 INTRODUCTION In our last annual review, looking back at 2013, other sub-sectors were worse off than in 2013 we concluded that 2014 would be a defining (cargo was -0.5%, and charters plummeted moment for Business Aviation. In the first half at -9%). While times remain challenging for all of the year, we saw four consecutive months of forms of transport, we shouldn’t forget that in growth – a breath of fresh air following the years many ways, Business Aviation has fared, and characterised by recession. We were hoping continues to fare, better than most of its air to see that the economic storm was over so transport peers. we could all sail ahead onto smoother waters. Some pundits were prompted to celebrate, Nonetheless, Business Aviation has work to rather hastily, the end of the recession and the do if it wants to reach the heights it has been beginning of a new era of slower, but hopefully anticipating since the aftermath of the 2008 long-lasting, growth. But the choppy results that financial crisis. In March last year, the EBAA set followed tempered some of that enthusiasm, and sail on a new approach for its activities on behalf we finally ended the year with a meagre growth of its 500+ members, considerably altering the percentage of 0.7 (i.e. half of the Secretariat’s Association’s traditional working method, with prediction). Only now can we say that 2014 was the aim of injecting added-value into the sector. in fact a defining year: it wiped the slate clean so that we can start again at zero (point seven). A number of new initiatives have already been embarked upon, and 2015 will see several The whole Business Aviation sector is still doing of them coming into fruition. Some of these all it can and crossing its fingers in the hope that initiatives are centred on core operational this respite will gain momentum and officially needs, such as fair access to ground and air kick off a new, more positive, cycle for 2015 and infrastructure, and obtaining the skills and talent beyond. If no earth-shattering events were to necessary to run the industry; others focus happen in Europe this year, Business Aviation on ensuring safer, greener, and more efficient should be the first to benefit from some economic operations that run harmoniously with other stability. But let’s remain on the safe side, any players in the air transport ecosystem; and growth outpacing 1, possibly 1.5%, should be others lean towards ensuring that the industry’s seen for what it really is: a major achievement reputation, particularly in European policy and considering where we are coming from. business circles, is positive and based on good, solid information. We shouldn’t overlook other signals from the market either. Whilst immune to schadenfreude, Since the impact of Business Aviation is often it can help to put things in perspective, to add greater than many perceive, the EBAA and the context, by looking at the recent results of other entire industry are pulling together the resources sectors in the air transport sector. In terms of to find necessary solutions and demonstrate movements, network carriers didn’t do as well the value of Business Aviation. The EBAA is as Business Aviation; they basically saw a stall investing around € 1m in projects and initiatives in supply (+0.2%). In fact, with the notable for 2015, because more than ever Business exception of low-cost carriers (+6.5%), all the Aviation means business. Rodolfo Baviera Brian Humphries Fabio Gamba Chairman President CEO Annual Review 2014-2015 3 OVERVIEW What is Business Aviation? Despite there being no official definition for Business Aviation, one definition by the International Business Aviation Council (IBAC) is generally accepted: Business Aviation is the ‘sector of aviation which concerns the operation or use of aircraft by companies for the carriage of passengers or goods as an aid to the conduct of their business, flown for purposes generally considered not for public hire and piloted by individuals having, at the minimum, a valid commercial pilot license with an instrument rating.’ Sub-divisions of the Definition IBAC also identifies three sub-divisions that Sub-division 3: collectively make up Business Aviation. These Business Aviation – sub-divisions are not actively promoted on Owner Operated their own, but they may be used by regulatory authorities and others for specific requirements, The non-commercial operation or use of aircraft provided that the complete definition of Business by an individual for the carriage of passengers Aviation is also made available. or goods as an aid to the conduct of his/her business. Sub-division 1: Business Aviation – Commercial Sub-division 4: Business Aviation – The commercial operation or use of aircraft by companies for the carriage of passenger or Fractional Ownership goods as an aid to the conduct of their business The operation or use of aircraft operated by an and the availability of the aircraft for whole entity for a group of owners who jointly hold aircraft charter, flown by a professional pilot(s) minimum shares of aircraft operated by the entity. employed to fly the aircraft. Fractional Ownership operations are normally non-commercial; however, the operation of the Sub-division 2: aircraft may be undertaken as a commercial Business Aviation – Corporate operation in accordance with the AOC held by the entity. The non-commercial operation or use of aircraft by a company for the carriage of passengers or goods as an aid to the conduct of company business, flown by a professional pilot(s) employed to fly the aircraft. 4 THE EUROPEAN BUSINESS AVIATION ASSOCIATION The European Business Aviation Association members and to ensure that Business Aviation (EBAA) is a non-profit association, founded is properly recognised as a vital sector of in 1977 and based in Brussels, Belgium. Its the European Economy. EBAA represents 543 member companies span all aspects of corporate operators, commercial operators, the Business Aviation sector in Europe and manufacturers, airports, fixed-base operators, elsewhere. The EBAA’s aim is to promote and Business Aviation service providers. excellence and professionalism amongst its EBAA Representativeness of the Business Aviation Industry The industry is composed of, and shared between, large and well-equipped Business EU 28 operators Aviation operators (with a fleet of 10 or more with 10 or more aircraft Non-EBAA aircraft) and small companies (with less than 29% 5 aircraft). EBAA sees its representativeness increase with company size; therefore the operators with a fleet of 10 or more aircraft are well represented throughout EBAA’s activities EBAA (EBAA represents 71% of European operators 71% with 10 or more aircraft). fig 1 EBAA Membership 1996-2014 Evolution 60% of BusAv 50% Operators 40% 30% 20% 10% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 -10% Number of operators Growth Note: this chart includes piston aircraft and bizliner jets Source: WINGX /EBAA I fig 2 In general, EBAA has been steadily growing Aviation Convention and Exhibition (EBACE), since the late 1990s, and especially since and the obligation for exhibitors to affiliate the early 2000s. This is clearly linked with the themselves to one of the two organisers (EBAA beginning of the annual European Business or the US-equivalent, NBAA). Annual Review 2014-2015 5 THE EUROPEAN BUSINESS AVIATION ASSOCIATION Total EBAA 600 members 500 400 300 200 100 0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 fig 3 Example: in 10 years – from 2000 to 2010 –EBAA Generally, it is remarkable to see that since almost quadrupled its number of members, 2009 and the global financial crisis, EBAA’s breaking the ceiling of the 400 mark in 2010, membership continues to climb, which is a followed immediately after by another landmark good sign for the future. momentum – the 500 mark, and that in the midst of the perfect storm! 543 MEMBERS 66 COUNTRIES fig 4 6 STATE OF THE INDUSTRY Economic Outlook EU 28 GDP 4% 3.4% 3.1% Growth 3% 2.5% 2.1% 1.3% 2% 1.7% 0,0% 1% 0.5% 2.0% -0,4% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 -1% -2% -3% -4% -4,4% -5% fig 5 According to the European Commission’s 2014 energy-price developments have gained winter forecast: “The pace of the recovery importance in 2014. While private consumption remains slow as Europe continues to struggle has been the main engine of growth in the current to leave the legacies of the crisis behind it. recovery, investment has failed to recover and Economic growth remains also weighed down exports have done little to support growth. The by unfinished macroeconomic adjustment and economic recovery in the EU and the euro area sluggish implementation of reforms, as well as is therefore expected to have lacked momentum long-standing weak growth trends.
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