Geneva capitalises on business aviation boom

The European business aviation market is said to be underdeveloped Keystone

Geneva is playing host this week to Europe's biggest business aviation fair at a time when the sector is enjoying record sales not least on the Old Continent.

This content was published on May 23, 2007 - 15:32

The Swiss market is also flying high thanks to the presence of a rising number of millionaires and the growth of business travel.

The annual European Business Aviation Convention & Exhibition (EBACE), which runs until Thursday, is the second biggest of its kind outside the United States.

After a sharp rise in its fortunes two years ago, the business aviation sector hit record levels last year. Manufacturers delivered 885 planes in 2006 – up 18 per cent on the previous year.

Growth has been underpinned by a buoyant European market, second only to the US, which is home to 70 per cent of the global business fleet.

"The US market – 16,000 jets – has reached saturation point after exponential growth over the past 15 years. The European market, however, is underdeveloped, with 2,500 to 3,000 jets," said Pierre Condom, director of Air & Cosmos review.

But Europe looks to be closing the gap. The French civil aviation authorities predict that Europe will account for 16 per cent of the global market – 4,000 aircraft – in 2011, compared with today's ten per cent.

Competitive advantage

The explosion in business aviation is being driven by a number of factors: economic growth, new business travel needs, demand from rich clients (around 20 per cent of the market) and stricter security controls and time constraints at airports.

Condom suggests there has also been a change in mentality: "Long seen as an extravagant luxury, the private jet is more and more considered by businesses as a financially viable alternative."

"If you seek out the best offers, the price of a ticket is only 25-30 per cent more than business class on an airline. In view of the time saved due to flight flexibility – three to four times more destinations than an airline – it becomes a competitive option."

This stems principally from the practice of shared ownership where either several firms have a stake in the same plane or clients just buy a certain amount of flying hours, as is the case with the US firm NetJets. The company's European arm – NetJets Europe – has seen business soar by 1,300 per cent since 2002.

Switzerland well placed

Jean-René Saillard, who heads the firm's operations in Switzerland, says Swiss clients account for ten per cent of business in Europe. They comprise mainly those working in the finance and luxury goods sectors, oil and international traders, and simply the well-off.

Geneva airport is also benefiting from the upturn, recording more than 58,000 business flights – a third of all air traffic – in 2006.

"Geneva is one of the European centres for private jets, and is well equipped for maintaining this type of aircraft," added Condom.

It remains to be seen, however, whether the fight against global warming will clip the sector's wings. But Condom thinks this is unlikely as air travel accounts for only four per cent of petrol consumption.

"On the other hand, saturation at major airports and protests from nearby residents could lead to problems," he added.

swissinfo, Frédéric Burnand with agencies

Key facts

The European Business Aviation Convention & Exhibition (EBACE) runs from May 22-24.
It is the second-largest fair of its kind outside the United States.
This year's event, which counts 340 exhibitors, is expected to attract more than 10,000 people.
Fifty-six business aircraft will be parked on the tarmac.

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