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Business Aviation in Europe sets sights on growth
As the eyes of the Business Aviation world turn to Geneva and the annual EBACE event, there is a whiff of optimism in the air after a turbulent six years that have tested the resilience of the industry to its limits. Fabio Gamba, Chief Executive of the European Business Aviation Association (EBAA) argues that the sector is primed for a fresh start.
Fabio Gamba does not mince his words when describing just how tough market conditions have been for Europe’s Business Aviation community in recent years: “To describe the period since 2008 as a bumpy ride would be an understatement. 2009 was our ‘annus horribilis’, [a 14% reduction in movements across Europe] and we endured a double-dip correction in 2012 and 2013 – yet despite those challenges we’re seeing some positive signs of recovery, but nobody is complacent.”
The green shoots of recovery he alludes to include a modest growth in Business Aviation movements in Europe of 0.3% during 2014; hardly a throwback to the double-digit growth of the early 2000s, but welcome relief from a period of unmatched volatility.
“If 2014 had shown another year of contraction, it would have been the first three-year period since the 1930s when we’d endured negative growth. It would have questioned the sector itself. We’ve effectively wiped the slate clean so that we can start again.”
Appetite for further consolidation?
Although the economic shockwave of 2009 caused a recalibration of the sector and led to a number of mergers and acquisitions (M&A), there remain around 800 commercial operators in Europe – a number that reflects the continued fragmentation of the market, but also the resilience of Business Aviation as a whole. So, can we expect further consolidation? “I don’t believe you can quote an ideal number [of operators]; the very nature of Business Aviation requires a tailor-made, bespoke approach, but as we’ve seen in the airline industry there is a need for greater consolidation, whether through alliances or M&A.
“The finances however are encouraging – most operators have relatively diverse operations, combining charter flights with brokerage, FBO services and other offerings, so this has made them more resilient during tough times.”
The reputation of Business Aviation, particularly during a period of austerity across Europe, remains an issue for the whole industry, according to Gamba. He cites the public perception of pop stars clambering down the steps of a business jet as an unfair characterisation of the sector as purely about luxury, when in reality such high-profile ‘jet set’ operations account for a tiny fraction of overall business.
“We are working hard to tell a different story, which is about the positive effect of business aviation in supporting economic performance and also providing a flexible solution for business leaders to do more with the time they have available.
“Increasingly, we need to change the perceptions of policy-makers as well as the wider public because it’s important that we reinforce the message that a ‘one size fits all’ regulatory approach cannot always work.”
The challenges of infrastructure and skills
EBAA has identified a number of overarching challenges facing the industry, one of which is access and in particular the lack of new airports and runways in Europe. Gamba also describes Europe as the “champion of the world in terms of slot co-ordination”, which is essential and good news for airlines but does not sit comfortably with Business Aviation’s intrinsic need for flexibility.
He also recognises the sector’s acute shortage of engineers, who are in demand right across the wider aerospace industry. “We’re sometimes seen as the poor relation of air transport and so there’s more we need to do to demonstrate that Business Aviation can also provide a great career path.”
So, overall is he optimistic? “To put our situation into context, in many ways Business Aviation has fared better than our air transport peers during a very tough period. We maintain a positive outlook and as an industry we’re doing all we can to drive growth in 2015 and beyond.”
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