31.05.2010

Business Aviation – It’s An Up-And-Down Industry

Calling business aviation ‘an up-and-down industry’ is partly just an easy joke, of course. Nonetheless, I’m also making a serious point. Figuratively, as well as literally, running an executive aviation company is a life of highs and lows.

Let’s consider the early months of this year alone. On January 1, the entire aviation industry – indeed, almost the whole of the business world – was surveying the damage caused by some 18 months of financial downturn. The UK economy was officially still in recession, whereas other major economies such as France, Germany, the US and Japan had begun to recover in mid- to late-2009. Like all business jet charter companies, our operations board at London Executive Aviation (LEA), once covered in bookings, now showed a depressing number of gaps. And like most aviation companies, we were forced to face and meet the new economic environment with a reduction in the workforce, which sadly meant redundancies. Throughout the aviation industry, we were all trying to keep positive but we were certainly looking back at a long-term low.

Our realistic approach at LEA helped us to keep operating. We were rapid and proactive in responding to the changing world and minimising the downside to our business. After all, in challenging times, weaknesses in a company’s management that might be hidden by a booming economy are exposed. Cracks widen. Attempts to overstretch, or offer ridiculously low prices to generate business, collapse. Not everybody in executive aviation survived the recession.

Against that backdrop, the start of this year was encouraging. On January 26, the UK economy officially emerged at last from the longest recession in living memory.

In February and March, UK executive aviation received another boost, with the disruptions and confusion caused by the British Airways cabin crew disputes and strike. Thousands of BA customers were affected. We saw a definite rise in enquiries for our services. Companies want certainty in their travel plans, not the threat of cancellations that put meetings, and perhaps even contracts, at risk.

By the end of March, therefore, a glance at our order book – or our operations board for that matter – showed signs of recovery for business aviation. There was no dramatic surge, nor should anybody expect a swift and dramatic return to prosperity for aviation in the second half of this year. Nonetheless, over the first quarter of 2010, we saw a 19.7% increase in overall fleet bookings compared to the same period in 2009. In March 2010 alone, we booked 149 jobs at LEA, compared to 115 jobs booked in the same month in 2009. Those figures represented a 29.6% increase across our total fleet.

And so, at the end of Q1 2010, we found European executive aviation riding on a small upward wave – barely a ripple really, but at least we were slowly and gently moving forward. Little were we to know...

We may have been moving in the right direction, but as we learnt on April 15, the winds from Iceland were very much moving in the wrong direction – at least as far as European aviation was concerned. Our small wave of progress hit a metaphorical wall of volcanic ash and stopped moving entirely. All commercial and executive flights to and from the UK were simply grounded. A definite – and basically unavoidable – low, although I do think the authorities over-reacted. Was it really necessary to have such a wide exclusion zone? There was insufficient serious data assessment at an early enough stage as to the density of ash in a given place at a given time. After all, the authorities and engine manufacturers should surely have already collected data from previous volcanic events.

But every volcanic ash cloud has a silver lining. When the chaos generated by Eyjafjallajökull finally began to ease, business jets were the first to respond. Commercial airlines had huge passenger backlogs to clear, and remained essentially restricted to flying from A to B. Thousands of people booked onto commercial flights were still left stranded around Europe for almost a week after airspace reopened and services had resumed. Business jet operators, however, were able to offer passengers the flexibility of a route home – perhaps from A to B via C – with far greater speed, allowing our customers to restart their lives as soon as possible. We saw a phenomenal rise in bookings and enquiries at LEA.

What next? It has already been a memorable year of ups and downs in our industry, but I am genuinely optimistic that European business aviation traffic in 2010 will rise over 2009. Encouragingly, we are recruiting pilots again this summer.

Nonetheless, the only certainty for the future remains uncertainty, and the probability that most of our predictions will be wrong. (As the Nobel Prize-winning physicist Niels Bohr once said: “Prediction is very difficult, especially about the future.”) So who in their right mind would choose to work in aviation, eh? Well, most of us, to be honest. I love it. At least for now. Let’s see what happens tomorrow.

Article written by Patrick Margetson-Rushmore
Originally published in P1

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