How Aviation Benefits the Corporate Community

A skewed perspective

When the topic of corporate aviation is discussed, how is it normally

portrayed?

It is only for the “RICH”

It is a way for big corporations not to pay their taxes (“fair share”)

Why can’t they fly the airlines like everyone else?

It is just an extravagant expense

How many remember the General Motors executives flying into Washington back in ’08? - Bill Sporato (Time Magazine) put it this way “Official Washington was outraged at the extravagance” - Or, Representative Gary Akerman (NY), "I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here?''

How about the recent comments by our President? - Richard Wolf (USA Today) - “President Obama must really have it in for corporate jet owners, why else would he single them out six times during his press conference”

President Obama made this statement in the same press conference. “You'll still be able to ride on your corporate jet. You're just going to have to pay a little more”

A Proper Perspective

What size companies utilize these airplanes?

What aircraft make-up the corporate fleet?

What purpose do these airplanes have?

What benefit is realized by the company and others?

What value is realized? (monetary and non-monetary)

What is Corporate Aviation?

What Size companies utilize these aircraft

According to the National Business Aviation Association, 85% of companies that use business aircraft aren’t corporate giants, they are small and midsize companies.

"General aviation aircraft are used by businesses of all sizes to generate opportunities and create growth, often in communities that aren't easily accessible through other means," said Craig Fuller, CEO of the Aircraft Owners and Pilots Association.

What Aircraft make-up the Corporate fleet?

17%

11%

72%

Jets Rotorcraft Turboprop

1. NEXA Research, NBAA, 2010

Transport employees

Transport executives

Medical, Evacuation and Humanitarian aid

Geodetics (GPS graphing)

Cargo handling / Mail / Freight

Customer support

What purpose do these aircraft have?

What benefit is realized by the company?

Einstein would be proud: - “Having an aircraft allows me to do more in a day… see more customers, visit more distributors, and make more appointments. It is a way to leverage my time. I call it my time machine.” Steven G.Whitney PresidentWhitney Products 2

2. NEXA Research, NBAA, 2010

“Time Machine”

5000 paved airports in the US as of 2008, only 376 have scheduled airline service (government database)

Scenario: Trip to Clarksville, TN from Greenville. (Airline vs. Corporate)

Airline: Arrive @ GSP 0430, leave for Nashville @ 0530 w/ a stop in CLT arrive in Nashville @ 0930 (EDT). Disembark and head to the rental car counter to get your car. (30 min). Drive to Clarksville approx. 1hr 5 min. Arrive at destination around 1105 (EDT) or 1005 (CDT).

Corporate / Charter: Arrive @ GMU 0745, leave for Clarksville @ 0800, nonstop, arrive in CKV @ 0900 (EDT), rental car waiting at the plane. Arrive at your destination around 0930 (EDT) or 0830 (CDT)

Sure, that’s great but what about cost?

In the airline scenario, the tickets for 5 passengers were $1500.

Depending on your meeting you may stay overnight and have hotel rooms $550

Loss of productivity: ?????

Corporate / Charter: Around $5600, out and back same day (better schedule), no hotel rooms, normal work hours and back in the office next morning.

“In the time it takes for our employees to even get to the closest commercial airport, we can have them onsite using our own aircraft. It doesn’t take a lot of brain power and spreadsheets to realize that having the aircraft is a benefit.” Zane Lambert Flight DepartmentManager

48%

33%

19%

Limited or No Scheduled Airline ServiceSecondary AirportCommercial Airport

3 NEXA Research, NBAA, 2010

What benefit is realized by the company and

others?

Increased productivity (employees and management)

Improved security of employees and property

Improved customer retention (Key to any business, customer support)

Company

Others

Ed Bolen, CEO of the National Business Aviation Association, noted the general aviation industry employs 1.2 million people and generates $150 billion in revenue annually. He added: “these companies are using their aircraft to reach for opportunities to keep their businesses alive in an unforgiving economic marketplace. In the process, they're bringing jobs, investment and hope to towns across the country”

43%

33%

24%

Customer OfficesNew Customer SalesCompany Facilities

4 NEXA Research, NBAA, 2010

What value is realized? (monetary / Non-

Monetary)

Superior financial performance

Reduced recession impact

Better customer access

5 NEXA Research, NBAA, 2010

Superior Financial PerformanceUsers of business aviation outperformed nonusers. Not surprisingly, the companies operating business aircraft performed better financially than companies that did not.

(Small / Medium’s) using business aviation recognized its strategic value, and did not need sophisticated justification to make the business case for keeping or even expanding business aviation’s role. Many said they could not have grown their company without business aircraft and the access to smaller airports close to their customers.

Reduced Recession Impact

SMEs using business aircraft were less impacted than nonusers. Indeed 69 percent of these companies posted greater top line growth in 2008 and 2009.

Better Customer AccessNBAA President and CEO Ed Bolen and other general aviation leaders discussed the value of light business aircraft to companies needing “to save money and keep their schedules flexible.”

Bolen said these aircraft are often used by companies “trying to visit three, four sites in the same day, and that can’t be done with other modes of transportation.”

Cessna Aircraft Company CEO Jack Pelton said of today’s fuel-efficient light business aircraft: “It is an office in the sky. This is not a luxury – it’s really a business tool.”