Delays, computer outages, hub-and-spoke route structures, declining passenger experience, and the pilot shortage are all conspiring to diminish the value proposition of commercial airlines for corporate travelers – and to make a stronger case for business aviation. More important, studies among S&P 500 companies show users of business aviation are far more successful on any number of business metrics compared to nonusers. Millennials, responding to the increasing democratization, accessibility and affordability, are driving moves to business aviation. But there are other motivations for corporations to reconsider the role of business aviation in their travel policy to enhance both the wellbeing of their road warriors and the bottom line. All this is prompting a growing shift away from commercial to business aviation. The industry is now experiencing a resurgence as new ways of doing business emerge designed to increase corporate users’ efficiency and profitability. And new business models are only one arrow in the quiver to provide affordable solutions for almost any business travel budget.
The reasons for this growth are manifold. One old aviation adage, “If you have time to spare, go by air,” has given a whole new life by today’s airline hassles.
“Growing airline inconveniences are eating up traveler efficiency like a Pac Man on steroids,” says Private Jet Services CEO Greg Raiff. “Airline route changes eliminated the out-and-back-in-one-day business trip and intra-regional air service. The number of nonstop destinations dropped dramatically with 400 communities losing air service since 2000. This is compounded by the pilot shortage which caused 50 communities to lose air service since 2013 and put another 200 at risk.”
More frequent corporate travelers are discovering affordable alternatives in business aviation. The vast majority of business aviation flights are for small- and medium-sized businesses getting the job done. In fact, nearly 60 percent of all companies using business aviation have fewer than 500 employees and only one aircraft.
Similarly, debunking the myth that the corporate jet is the exclusive domain of the executive level, the majority of missions carry mid-level employees who support corporate objectives, including technical specialists, middle managers and customers. The C-Suite uses these aircraft only about half the time. Users also credit business aviation for the ability to keep their company’s operations in locales away from higher-priced urban centers.
And then there’s the big squeeze as airlines install more seats and reduce pitch.
Passenger numbers continue to grow; there were more than 300 million additional passengers flying on US airlines in 2018 than there were in 2005, according to the Department of Transportation’s Bureau of Transportation Statistics.
But at the same time, US carriers actually operated 1.7 million fewer flights in 2018 than in 2005. In the coming decade, USTA predicts many airports will be at pre-Thanksgiving congestion at least twice a week.
At a time when the war for talent is intensifying, businesses need to calculate the impact of airline travel on employees. Road warriors find the time spent in transit the most challenging aspect of their entire job, according to a survey by the GBTA and Sabre. This same study showed 79 percent (and 88 percent of Millennials) said travel impacted their overall job satisfaction. Equally important, that same majority said the quality of travel impacted their business results.
In fact, 62 percent of Millennials believe the main benefit of business aviation is getting people where they need to go, when they need to get there, according to a recent study by the European Business Aviation Association (EBAA). The report, Expanding Horizons: How Millennials see the Future of Business Aviation, also noted this group sees it as more sustainable. In addition these digital natives like the ride-sharing options with 60 percent ready to book flight-sharing air services.
Airlines design their schedules specifically for their own efficiency; planners are not necessarily motivated by considerations of the impact their decisions have on business travel efficiency and the bottom line results for other organizations. Today businesses of all sizes are looking to be more competitive in their markets and better positioned to attract and retain great employees. The goal is higher productivity and better financial results. And for many, that means considering the entire value proposition of business aviation.
Users of these services have already discovered the cost of business aviation pays for itself in the end.