NBAA Business Aviation Fact Book

year for employee travel withthe commercial airlines. Manyof these companies do a sophisticated analysis before eachmission to determine whetherairline travel or business aviationis the mode of transportationbest suited to the mission.The terms “business” and “corporate” often are used interchangeablyto refer to business aviation operations because they both entail useof a GA aircraft to support an enterprise. However, the Federal AviationAdministration (FAA) has slightlydifferent definitions for “businessaviation” and “corporate aviation.” The FAA defines “business aviation” as “any use of an aircraft(not for compensation or hire) byan individual for transportationrequired by the business in whichthe individual is engaged.” In contrast, the FAA defines“corporate aviation” as thoseflights that utilize professionalpilots who operate, but do notown, the aircraft.WHY USE BUSINESS AVIATION?A company’s decision to utilize business aviation depends on a varietyof factors, including the availabilityof commercial airline service, both atits headquarters and travel destinations; the number of sites to bevisited in a single day; the numberof passengers to be transported; theneed to discuss proprietary mattersen route; the requirement to movespecialized and outsized equipment;as well as a host of other considerations. Reasons why organizationsuse business aviation to meet theirtransportation challenges include: Saving employee time.Efficient employee schedulingand employee time-savingsare possible because businessaircraft have the ability to fly ondemand and nonstop betweensmaller airfields that usually arecloser to a traveler’s destinationthan a major airport. Increasing traveler productivity, safety and securityen route. When traveling onbusiness aircraft, passengers canmeet, plan and work in a secureoffice environment, free frominterruptions and distractions,which enables them to discussproprietary information withoutfear of eavesdropping, industrialespionage or physical threat.Travelers can strategize beforemeetings and debrief afterwardsor conduct meetings en route.Also, many aircraft are outfittedwith advanced communicationstechnologies – including phones,e-mail and Internet access – thatenable travelers to remain inconstant contact throughout theirflight with colleagues on theground. Most importantly, business aircraft are engineered andbuilt to the highest standards andare typically flown by two-personprofessional crews, all of whichhas enabled business aviation toachieve a safety record comparable to that of the major airlines. Reaching multiple destinations quickly and efficiently.Companies that need to reachmultiple destinations in a singleday use business aviation becausethat type of mission is nearlyimpossible to accomplish usingany other mode of transportation. Accessing communities withlittle or no airline service.Business aviation serves 10times the number of U.S. airports(more than 5,000) served bycommercial airlines (about 500).The ability to use smaller, lesscongested airfields located closerto one’s final destination is a vitalpart of the utility and flexibilityNBAA BUSINESS AVIATION FACT BOOK 7

SECTION 1VIKING RANGEPROFILEA Name-Brand Product from a Small HometownFor Greenwood, MS-based Viking Range, which employs 1,100 people in the state and whose productsare found in more than 80 countries, business aviation is a necessity.Flying into Greenwood, the hometown of Viking founder Fred Carl, Jr., is impossible via airline, anddriving 90 miles from the nearest airline destinations – Memphis, TN or Jackson, MS – is time-consuming.That’s why Viking uses two Cessna Citation jets to bring clients and vendors directly to Greenwood forsales meetings, training sessions and product demos. With its airplanes, Viking can pick up these passengers at airports near their own offices and bring them directly to Greenwood.“We’ll do everything from short hops to connect with commercial traffic up in Memphis, to seeing clientsin Boston, out on the West Coast, or in Mexico and Canada,” says aviation department manager BarryShelton. “Our productivity and efficiency is tremendously increased by using our planes.”of business aviation aircraft. Itmeans companies can stay orestablish plants or facilities in thegrowing number of small townsor rural communities with little orno commercial airline service. Scheduling predictability.About 3 percent of all commercial airline flights are cancelled,but nearly one quarter more aredelayed. If a commercial flightcancellation or delay causespassengers to miss an airlineconnection, the odds of gettingon the next flight are substantiallyreduced. Also, some companiesare located in towns with verylow frequencies of airline flights,leaving company employeeswith few or no alternatives if aflight is canceled. These types ofconcerns over delays or cancelations are virtually nonexistent onbusiness aircraft. Supporting the travel needsof many types of companyemployees. Surveys indicate that8 NBAA BUSINESS AVIATION FACT BOOKmore than 70 percent of passengers aboard business airplanesare non-executive employees.Companies often send teams ofemployees to a given destinationon a business aircraft because itis the most cost-effective meansof transport. Moving vital equipment. Whencompanies need to immediatelyship sensitive, critical or outsizedequipment, business aviation isoften the best solution. Exercising managementcontrol over scheduling. Thenear-total scheduling flexibilityinherent in business aircraft –even changing itineraries enroute – can be a powerful asset.Business aircraft can arriveand depart on the passengers’schedule, typically waiting forthem in the ordinary course ofbusiness. Thus, meetings canbe moved up, back or extendedwithout penalty, risk or unnecessary scheduling pressures. Intoday’s business environment,companies need to be nimble.Business aviation provides flexibility for companies that need toensure employees can respondquickly to changing demands andcircumstances. Minimizing non-businesshours away from home.Business aircraft enable flexiblescheduling and quick and easyaccess to meeting locations,thereby minimizing time awayfrom home and office. Providing a return to shareholders. Studies have confirmedthat companies that use businessaviation to solve their transportation challenges return more toshareholders than companies inthe same industry that do notutilize business aviation. Charging the entrepreneurialspirit. By minimizing or eliminating many of the barriers totravel, business aircraft enable

Reasons for Business Aircraft UseReasons for Business Aircraft Use1%Make connections withscheduled airline flights9%Other64%Support schedules not metwith scheduled airlines6%Industrial or personalsecurity reasonsTypes of Locations Flown IntoTypes of Locations Flown Into19%Reach locationsscheduled airlinesdo not serveCustomer offices23New es1813Note: Each total represents number of locations flown to in asix-month period.Source: Harris Interactive Survey, 10/2009Note: Total does not equal 100 due to rounding.Source: Harris Interactive Survey, 10/2009companies to quickly respond tobusiness opportunities.business aircraft than they areeven in their own offices. Supporting humanitarianand charity efforts. Businessaviation supports people andcommunities in crisis by flyingpeople with illnesses to centersfor treatment, transportingblood and organs to hospitals,connecting military veterans withtheir families, and providing emergency relief services to victims ofnatural disasters. Productive collaboration amongSTUDIES CONFIRM VALUEOF BUSINESS AVIATIONPerhaps most important, severalstudies have shown that the productivity and efficiency gains frombusiness aviation translate intotangible and quantifiable benefitsfor companies, shareholders and thenational economy.Surveys of companies using business aircraft have shown that: More than 60 percent of surveyrespondents use their aircraftto support efficient schedules,including using them to reachremote locations not served bya scheduled airline. Passengers feel they are significantly more productive aboardcompany employees aboardbusiness aircraft occurs nearlyeight times more often thanwhen those same employeesare aboard commercial aircraft. Productive collaboration withcustomers occurs nearly seventimes more often than oncommercial aircraft.BUSINESS AIRCRAFTUTILIZATION OPTIONSMany business aircraft are owned byindividuals or companies that typically fly with two-person, professionally trained crews whose primary,if not exclusive, responsibility is tooperate the company aircraft. Someindividuals and smaller companiesthat operate business aircraft, especially individual business people whoown their airplanes, use one pilot tofly single-engine airplanes or lighttwin-engine piston, turboprop or jetpowered aircraft.While most business aircraft areowned by the individuals or companies that fly them, they alsosometimes utilize business aviationthrough arrangements such as chartering, fractional ownership, leasing,time-share agreements, partnerships, aircraft management contracts or interchange agreements.The latter is an arrangement underwhich a person leases his airplaneto another person in exchange forequal time, when needed, on theother person’s airplane, at no charge.On-demand air charter providescompanies with instant access tobusiness aircraft. Many charter customers are first-time usersNBAA BUSINESS AVIATION FACT BOOK 92010 NBAA BUSINESS AVIATION FACT BOOK9

SECTION 1DR. LANCE FERGUSONSupporting a Medical PracticePROFILEDr. Lance S. Ferguson is an ophthalmologist and surgeon from Lexington, KY who operates a Cessna CitationMustang.Flying is an important part of maintaining Ferguson’s referral-only surgical practice, which is “predicated ondeveloping trust and great relationships with primary care practitioners,” he said. “Making the effort to go out tothese doctors’ locales to meet them has been a competitive advantage.”A typical flight has Ferguson finishing his last surgery of the day around 3:00 p.m. An hour later, he is ready toembark upon a half-hour flight to visit a doctor elsewhere in Kentucky. By 7:00 p.m. he is back in the airplane,returning home by 7:30.Ferguson said it would not be feasible for him to drive three hours one-way to make a business meeting. “But ifI can do it by flying 30 or 40 minutes, it’s much easier on me. I am rested and ready to go the next day.”of business aviation. Air charterflights operate on the passenger’sschedule, which provides themwith considerable flexibility, as wellas safe and convenient access tothousands more destinations thanairlines can provide.tion. Fractional ownership enablescompanies to experience many ofthe advantages of business aviation quickly and without many ofthe startup considerations typicallyassociated with traditional flightdepartments.Companies that charter on a regularbasis sometimes will purchase ablock of charter time at discountedrates, a practice that is known as“block charter.” Other businessaviation customers participate injet-card programs, which offer cardholders business aircraft access,typically in increments of 25 or 50hours, without requiring any longterm financial commitment.Some business aviation users, whoneed an aircraft to meet their travelneeds but are willing to allow othersto use the airplane part of the time,enter into partnerships, time-shareor interchange agreements. Otheraircraft owners who want to offsetthe expense of operating their airplane, offer their aircraft for charterunder FAR Part 135 regulations.Business aircraft users that havea greater need for on-demand airtransportation but whose travelrequirements do not justify thepurchase of an entire aircraft, oftenparticipate in fractional ownershipprograms. Companies or individuals purchase a fraction (as little as a1/16 share) of an aircraft and receivemanagement and pilot servicesassociated with the aircraft’s opera-10 NBAA BUSINESS AVIATION FACT BOOKCompanies that purchase or leasean aircraft often set up a flightdepartment – staffed by pilots,maintenance technicians and otheraviation professionals – to handleall aspects of their on-demand airtransportation operation. However,these companies sometimes utilizevendors for a variety of supportservices, from contract maintenanceto turnkey aircraft management.Business aircraft generally are notflown for compensation or hire.Thus, the majority of U.S.-registeredbusiness aircraft are governed byPart 91 of the Federal AviationRegulations (FARs). Most of theU.S.-registered GA aircraft that areflown for compensation or hire areregulated by FAR Part 135, whichcovers commercial operations,including air charter.FLIGHT HOURS HISTORICALLYSTEADYFAA data shows that use of theoverall aviation system by businessaviation is actually flat or down interms of flight hours in recent years.Indeed, the average turbine business aircraft (turboprops and jets)flies about 10 percent of the amountof flight hours in a year for a commercial airliner.The table on the facing page details the hours that business aviation, as part of the general aviationsegment, has flown over the pastseveral years.

U.S. General Aviation and Air Taxi Activity, 2006–2010 (Estimated Hours Flown in Millions)General Aviation tional4.33.84.43.43.9Aerial Application0.91.40.91.01.1Aerial Observation1.21.41.41.21.7Aerial Other0.20.40.30.2.3External Load0.10.20.20.1.1Other Work0.20.10.30.2.3Sightseeing0.20.20.20.1.2General Aviation Use Total24.023.822.819.620.7Air Taxi2.73.12.42.22.2Air Tours0.30.50.30.20.3Air Medical0.70.40.60.70.8On-Demand FAR Part 135 Use Total3.74.03.23.13.3Total General Aviation andOn-Demand FAR Part 135 Use27.727.926.022.724.0On-Demand FAR Part 135 UseNotes:Columns may not add to totals due to rounding.Starting in 2004, FAR Part 135 Air Taxi, Air Tours, and Air Medical use categories were added and tabulated separately from other general use categories.Beginning in 2004, commuter activity is excluded from all estimates. Commuter activity was included in the Air Taxi use category in 2003 and prior.Source: FAA Administrator’s Fact Book, 2012 and earlier editions

SECTION 2BUSINESS AVIATION MEANS JOBSAND ECONOMIC DEVELOPMENTIt’s a fact: Business aviation means jobs. From the smallest U.S.towns to the largest American cities, business aviation plays animportant role in regional and state economies. Directly through aircraft manufacturing and airport-related jobs, and indirectly throughthe purchase of goods and services by firms involved in the manufacture, operation and maintenance of business aircraft, businessaviation is a major economic driver throughout the United States.Nationwide, business aviation employs 1.2 million people, and contributes 150 billion to U.S. economicoutput. In some states and regions,the industry is an especially significant generator of employment andlocal investment. A case in point isKansas, where aviation accounts for 7.1 billion, or nearly one-third, ofthe state’s economy. Most of thatactivity is related to the major business aircraft manufacturing companies based in Wichita.Yet even in a smaller state, likeRhode Island, business aviationcontributes 460 per year for everyresident in the state.BUSINESS AVIATION ISGOOD BUSINESSBusiness aircraft manufacture is oneof the few industries still contributing positively to the nation’s balance of trade, and the jobs createdthrough the manufacture of business aircraft are good manufacturingjobs that the U.S. can retain in theFast Facts Business aviation contributes 150 billion annually to the U.S. economy. The industry employs more than 1.2 million people in the U.S. The majority of the world’s business aircraft are operated, serviced andmaintained in the U.S., creating numerous jobs in every state of the nation.12 NBAA BUSINESS AVIATION FACT BOOK

21st century. The industry producesthe vast majority of all businessaircraft flown worldwide.Not only are these aircraft built inthe U.S., but the majority of theworld’s general aviation (GA) aircraftare flown, serviced and maintainedin America.Even the planes manufactured outside the U.S. are often “completed”in America, where engines, avionics, electronics, paint, interiors andother U.S.-made components areinstalled.Many of the companies in aircraftcompletion are small and mid-sizebusinesses involved in the production of goods and services neededto make an aircraft. These mightinclude producers of aluminum,glass, plastic, fabric and other materials, or radio, TV, Internet and othercommunications equipment fornavigation, coordination with air traffic control and other functions. Ofcourse, the jobs in business aviationgo well beyond those involved inaircraft manufacture and completion.The operation of business aircraftemploys hundreds of thousands ofworkers in every state in the country, and includes schedulers, dispatchers, maintenance technicians,pilots, training professionals, insurers and other specialists.GA AIRPORTS AREECONOMIC ENGINESThe mostly small, public-use airportsacross the country that are used bybusiness aircraft are key economicengines, boosting jobs, local investment and economic activity in communities across the nation.These community airports createjobs for area residents through theaviation-related businesses on andnear the airport – flight schools,aircraft repair businesses, aircraft“The general aviation airports acrossthe country that are used by businessaircraft are key economic engines,boosting jobs, local investment andeconomic activity in communitiesacross the nation.”manufacturers, fixed-base operatorsproviding fuel and aircraft parking,etc. – as well as businesses indirectly related to the airfield. Theseinclude restaurants, hotels, car rentalcompanies, shopping outlets andother companies positively impactedby the flow of passengers, goodsand services through the airport.In turn, these employers generateimportant tax revenues for cities,counties and states.NBAA BUSINESS AVIATION FACT BOOK 13

SECTION 2Furthermore, airports help keep existing employers in a community andattract new ones to a region becausecompanies are eager to capitalizeon the transportation and competitive business advantages offered byairports – most importantly, easyaccess to world markets. Businessdevelopers and venture capitalistslook for ready access to air transportation when they make decisions onwhere to locate new businesses andfacilities.In fact, without an extensive networkof airports, the “just-in-time” modelof inventory management would beimpossible.Consider Teterboro Airport (TEB),located in Northern New Jersey,which employs 1,700 people. A2005 economic impact study by thePort Authority of New York & NewJersey found that TEB is responsiblefor more than 15,000 jobs and 1.8billion in annual sales in the region.Northern New Jersey’s hotel industry also depends on the business itgets from Teterboro. Professionalflightcrews and other individuals thatfly into and out of TEB representnearly one-third of 400,000 available hotel nights in the region, andlocal municipalities earn 250,000 to 500,000 annually in revenue fromoccupancy taxes at those hotels.Oklahoma’s Wiley Post Airport ishome to a mixture of piston twinsand jets, and airport officials reportthat more than 50 airport businesses employ more than 1,000 peopleearning 52 million a year, whiledirect expenditures from airportactivities contribute more than 100million a year to the area economy.Meanwhile, Charles B. WheelerDowntown Airport (MKC), located inthe Kansas City area, is home to jetsand single- and twin-engine aircraft.Like many community airports,Wheeler has no scheduled airlineservice. Nevertheless, a 2002 analysis revealed the direct and indirecteconomic impact of the airport tothe Kansas City metropolitan area isan estimated 280 million annua

» Business aviation reaches 10 times the number of U.S. airports (over 5,000 public-use facilities) than the airlines do. The majority of U.S. airline flights only go to and from 70 major airports, and the total number of U.S. destinations served by air carriers has declined. » Business aircraft flights account for just 4 percent of the