“I’ll send the company jet.”
While that may sound like a luxurious offer to a client, companies of every size are now using business aviation to transport executives, clients or specialists to boost their competitive edge. Business aviation has been steadily growing, according to a report by Argus, an aviation technology company.
What is Business Aviation?
The National Business Aviation Association (NBAA) defines business aviation as “the use of ‘general aviation’ aircraft for a business purpose.” General aviation isn’t restricted to single-pilot planes only, though it does include them; in fact, any aircraft used for a business purpose that isn’t military or commercial falls into this category. Although an estimated 15,000 business aircraft are registered in the U.S., only 3% of those aircraft are piloted by the country’s largest companies, according to Forbes. The majority of business aviation users are businesses of all sizes across industries, and represent the hub of American business.
Contribution to the Economy
A growing business aviation industry is substantial for the country, as the sector employs an estimated 1.1 million people and contributes about $219 billion to the U.S. economy, according to the NBAA.
Not only does business aviation employ millions of people, but it also benefits the business aviation airport and their communities, totaling an estimated $2.5 million in indirect and direct contributions per aircraft, according to a 2017 NEXA Advisors report.
Business Uses for Aviation
The business uses for aviation are just as diverse as the organizations leveraging it. This includes:
- Transporting key employees: Employees are a company’s most important asset, and the ability to transport key specialists or leaders for strategic opportunities, leadership control and managing the company image with the public, customers or investors can be quite valuable. Not only can these important employees fly on the business’ schedule, but they can also collaborate along the way.
- Transporting customers: To close a sale with a customer or build a better relationship, companies can easily transport a customer to see significant facilities, products that are difficult to transport, or other sites that may help to close a sale.
- Transporting suppliers: The supply chain can also be streamlined with the ability to negotiate in person, tour facilities or meet with customers.
- Transporting mail, cargo or parts: In some cases, production may grind to a halt without a key part, or cargo funneled between office locations can become expensive when shipped overnight. But when the volume is significant, or the value of keeping production moving outweighs the costs of even a low volume shipment, business aviation can provide a productive, cost-effective solution.
- Community service: Businesses often choose to invest in their local communities by offering charity support. For example, they may offer patient transportation to far-off treatment centers when care isn’t urgent. Medical personnel and supplies can also reach otherwise inaccessible disaster areas using business aircraft.
- Direct use: Using the aircraft’s capabilities may also benefit businesses that require site mapping or aerial photography, to name a few direct applications.
How Business Aviation Benefits Companies
While it may be a luxury to forego the long lines and rigid schedules of commercial flight, it’s also more productive and profitable in many cases for business to leverage business aircraft to meet company travel schedule needs, reducing time on the road, and as a result, meal and hotel costs. One other crucial win: time. When employees spend less time in transit, they can be more productive at work, and more engaged in their personal lives.
Benefits are apparent at an organizational level as well as an individual level. In analyzing S&P500 Enterprise company values between 2012 and 2017, a NEXA Advisors 2017 report on Business Aviation and Top Performing Companies found a 70% increase in business aviation users compared to non-users. While not recorded in a leger, intangible assets, like stronger relationships, motivated employees, a service-focused culture and a strong brand value are linked to the use of business aviation, according to the report.
Additional benefits of business aviation include:
- Improved time to market. When experts can swiftly meet or assess a facility, critical business tasks and benchmarks can be completed more quickly.
- Boosted productivity prior to, during, and after travel. Employees can work more efficiently, together or alone, on a business aircraft. A report from the European Business Aviation Association found that employees using business aviation increased productive work time by 150% compared to commercial flight.
- Accelerated strategic translations and partnerships. Stakeholders can mobilize quickly to respond to opportunities or counter competitor offers.
- Lowered risk of intellectual property breaches. Employees traveling commercially are working in public spaces and transporting hardware rife with valuable intellectual property. Providing travelers with a private space can greatly reduce the risk of lost or stolen hardware, overheard confidential exchanges or work in insecure environments.
- Strengthened customer retention and higher win rates. The ability to quickly address customer concerns or demonstrate a product before competitors can bolster customer interactions.
- Employee retention. A managed, efficient mechanism for transportation can reduce employee burnout, mitigating costs from turnover and helping to keep top talent as well as successful win over new talent.
- Scheduling flexibility. Traveling employees are not limited by fixed commercial schedules, and instead can travel more efficiently, even visiting multiple locations in a single day. The EBAA’s report estimated business aviation flights save an average of 127 minutes, and about 20% of business aviation flights save more than five hours of time compared to commercial options.
- Global reach. Business is largely conducted on a global scale, and business aviation can be as well.
Ultimately, control over travel schedules appears to correlate to control over the business. In NEXA’s report, business aviation users emerged with market capitalization strengths, outperforming non-users by 18%. Across numerous “best of” reports, the majority of companies on each list of leaders were business aviation users, including:
- America’s 50 Most-Innovative Companies (Forbes Global List 2017) (92%were users)
- 100 Best Places to Work (Fortune 2017) (95% were users)
- 100 Best Corporate Citizens (The CRO 2017) (92% were users)
- 50 Best Brands (Interbrand 2016) (92% were users)
For many organizations, business aviation is the most efficient, flexible and beneficial travel option.