BUSINESS AVIATIONINTERNATIONAL CHALLENGES AND ISSUES
A presentation to the ICAO Council
10 June 2010
Today’s Aim
o To familiarize you with the aims and activities of the IBAC C il d th b i i ti f il fIBAC Council and the business aviation family of Associations.
o To provide an update on the status of business aviation globally.
o To summarize business aviation challenges and issues.
Purpose
Contents
1 Introduction to Business Aviation1. Introduction to Business Aviation
2. Global Demographics
3 Economic Stimulus Value3. Economic Stimulus Value
4. Aviation Safety
5 Security and Facilitation5. Security and Facilitation
6. Environment
7 Air Traffic Management7. Air Traffic Management
8. Conclusion, Questions and Answers
Contents
Introduction to Business Aviation
IBAC and Members
o IBAC: A Council of global Business Aviation AssociationsAssociations
o Governance: Governing Board, with each Association ,having one Member on the Board
o 15 Member Associations
Introduction to Business Aviation
IBAC Member Associations
Introduction to Business Aviation
Professional Representation
1. IBAC Policy: Set by the Governing Board.
2. Secretariat provides program management (Director General and Directors for ICAO Liaison StandardsGeneral and Directors for ICAO Liaison, Standards, Audits, Regulatory Affairs and Environment).
3. Business Aviation is represented on significant b f ICAO P l d W k Gnumber of ICAO Panels and Work Groups.
4. Member Associations work with respective national/regional governments with help as required / g g p qby IBAC.
Introduction to Business Aviation
Demographics of Business Aviation
Business Aviation Landscape
o 30,000 turbine business aircraft globally
o Jet ‐ 17,500
o Turboprop ‐ 12,500
o Range of sizes: small single engine to large airlineo Range of sizes: small single engine to large airline aircraft
o Most prevalent: middle size corporate jet aircrafto But new growth includes VLJs and larger intercontinental
jet aircraft
o Approximately 17,000 operators worldwidepp y , p
Demographics of Business Aviation
Aircraft Types
Demographics of Business Aviation
Aircraft Manufacturers
Unlike airline aircraft, business aviation has a large number f f t ith id i t f t i l diof manufacturers, with a wide variety of types, including
Boeing and Airbus, also builders of dedicated business aircraft.
Demographics of Business Aviation
Global Jet Distribution by Region
Demographics of Business Aviation
Forecast Growth
Demographics of Business Aviation
Operational Sub‐Sectors
Business Aviation consists of four primary sub‐sectors:
1.Commercial on‐demand charter
2 Corporate2.Corporate
3.Owner Operated
4.Fractional Ownershipp
Demographics of Business Aviation
Operational Characteristics
o Point‐to‐point, specific purpose routes (without inefficient hub‐and‐spoke.)
o Departure times based on specific requiremento Departure times based on specific requiremento Short takeoff distance, short time to altitude, high
cruise altitude, fast descent/landingo Use of large number of airports (local & regional
airports relieving traffic impact on high density areas)
Demographics of Business Aviation
Aircraft User Profiles
o Priority is on time management, efficiency and fl ibilitflexibility
o 79% of operators have only one aircrafto Executives and high worth passengers, but 78% of g p g ,
passengers middle management and lower (e.g. engineering & audit teams etc)
Demographics of Business Aviation
Economic Stimulus Value
Piloting the Economy
o Business aviation is a PROVEN PRODUCTIVITY TOOL used by corporations worldwide.
o 75% OF FORTUNE 500 COMPANIES operate their owno 75% OF FORTUNE 500 COMPANIES operate their own aircraft.
o Studies show that corporations NOT utilizing business i f ECONOMIC DISADVANTAGEaircraft are at an ECONOMIC DISADVANTAGE.
One independent assessment ‐ “…study found that i ft t EARNED 141 PERCENT MORE iaircraft operators EARNED 141 PERCENT MORE in
cumulative returns than non‐operators.”
Economic Stimulus Value
Business Advantage
Economic business advantages include:g
1.Flexibility and immediate response
2.Travel time savings for executives and staff2.Travel time savings for executives and staff
3.Efficient use of time for high net worth individuals and high salaried staff
4.Total cost savings in many examples
5.Face to face business deals
6 Corporate security6.Corporate security
Economic Stimulus Value
Economic Value to Communities
o Business aircraft are symbolic of successful corporations; where business aircraft go jobs and prosperity will followwhere business aircraft go, jobs and prosperity will follow.
o Business aircraft fly to where business is conducted. They operate to the closest airport, usually a local or dedicated bbusiness aviation airport.
o New business means jobs and economic stimulus.
Economic Stimulus Value
Economic Value to Nations
Economic value through job creation spending and business
Impact of B siness A iation E amples
Economic value through job creation, spending and business success. Studies demonstrate significant societal benefits.
Impact of Business Aviation Examples
EUROPE ‐ approx €19.7bn gross value added to the EEuropean economy.
USA ‐ contribution of $150 bn to U.S. economic output, and employs more than 1.2 million people.
Economic Stimulus Value
Socio‐Economic Benefits
o Business aviation is not in competition with airlines
o Business aviation provides an effective air transport option
when CAT not cost and/or time effective
o A vast number of city pairs are served by business aviation where no scheduled service existswhere no scheduled service exists.
Economic Stimulus Value
Socio‐Economic Benefits
o Business aviation airports contribute extensively to local economic health. For example – at one airport (Teterboro near NY) a study showed airport generation of 15,554 jobs, $670 million in salaries, and $1.8 billion in sales annually.million in salaries, and $ .8 billion in sales annually.
Economic Stimulus Value
Socio‐Economic Benefits
Productivity tool for corporations
Economic Stimulus Value
Socio‐Economic Benefits
Important contributor to society – e.g. emergency medical services, medical transfers and humanitarian aid (Haiti)
Economic Stimulus Value
Socio‐Economic Benefits
Recent Press Release in US:Recent Press Release in US:
“…….. The U.S. House of Representatives today, RECOGNIZING the entire general today, COG G t e e t e ge e aaviation community, INCLUDING BUSINESS AVIATION, IN EFFORTS TO PROVIDE RELIEF FOR THE PEOPLE OFPROVIDE RELIEF FOR THE PEOPLE OF HAITI, following the devastating January 12 earthquake that struck the island
ti Th S t d it i fnation. The Senate passed its version of the bill last week.”
Economic Stimulus Value
Socio‐Economic Benefits
…….from COMMUNICATION FROM THE COMMISSION:
“General and Business aviation provides closely tailored, flexible, door‐to‐door transportation for individuals, f p fenterprises, and local communities, increasing mobility of people, productivity of businesses and regional cohesion.”
Economic Stimulus Value
Aviation Safety
Safety Strategy
o Business Aviation coordinates safety actions through a Business Aviation Safety Strategy
o Strategy updated semi‐annually safety problems areo Strategy updated semi annually, safety problems are routinely identified and new initiatives added
o Strategy serves as business aviation input to ICAO Gl b l A i i S f PlGlobal Aviation Safety Plan
Aviation Safety
IS‐BAO
The International Standard for Business Aircraft Operations (IS‐BAO) is the industry ‘code(IS BAO) is the industry code of best practices’.
Aviation Safety
SMS Assistance to Operators
SMS was established as a foundation f th IS BAO f t t d d i iof the IS‐BAO safety standard, giving
business aviation extensive SMS experience over last 10 yrs. Wide knowledge of SMS used to develop SMS Tool Kit and eLearning training program.p g
Aviation Safety
Business Aviation Safety Record
Aviation Safety
Challenges and Issues
1. Importance of Annex 6 Part II for Corporate Aviation global harmonization.
2 Need to increase use of industry safety standard by2. Need to increase use of industry safety standard by on‐demand charter operators.
3. Need for safety regulators to apply safety indicators i l i hin regulatory oversight.
4. Need for safety regulators to recognize the value of utilizing industry safety standards.g y y
Aviation Safety
Security & Facilitation
Security & Facilitation
Business aviation was impacted dramatically by the tragedy of September 2001 similar to other aviation sectors.
Following 2001, business aviation obtained status on the A i i S i P l d F ili i P lAviation Security Panel and Facilitation Panel.
Many industry recommendations have been madeMany industry recommendations have been made.
Security and Facilitation
Challenges and Issues
1. Need to recognize that security provisions must be effective for specific operations (one size does not fit all).
2. Lack of harmonization ‐ States continue to diverge in security provisions and there are too many local securitysecurity provisions and there are too many local security rules.
3. EU Security Directive example of how divergence is f ili dfacilitated.
Security and Facilitation
Challenges and Issues
4. API provisions must allow operational flexibility.
5. Local un‐harmonized charges for border clearance have become a burdenhave become a burden.
6. Importance of keeping local and regional airports open to business aviation to relieve large hub
i d id i l ffi i dairports and provide operational efficiency and environmentally friendly movement of business travelers. CIQ is very important for local airports to avoid additional congestion at major hubs.
Security and Facilitation
The Environment
Environmental Stewardship
Support for ICAO Policy
o Business aviation supports ICAO position on post‐Kyoto targets.
o Business aviation has established policy on aircrafto Business aviation has established policy on aircraft noise and emissions.
o Policies are applied to input to ICAO and education of b i i ibusiness aviation operators.
Environment
Business Aviation Statement on Climate Changeg
Business aviation operating community ( C d b ) d h(IBAC and Members) and the manufacturing community (General Aviation Manufacturing Association) combined to issue a joint statement on climate change.
Environment
Business Aviation Statement on Climate Change
Business Aviation Targets:
g
o Carbon neutral growth by 2020
o An improvement in fuel efficiency averaging 2% per year from today until 2020year from today until 2020
o A reduction in total CO2 emissions of 50% by 2050 relative to 2005
Environment
Emission Realities
o Business Aviation contributes only 2% of total aviation CO2 and .04% man‐made CO2.
o 40% fuel efficiency improvement achieved over theo 40% fuel efficiency improvement achieved over the past 40 years.
o Typical operator flies 500 hrs per year, producing small f CO ( 1 200 1 500 )amounts of CO2 (approx 1,200‐1,500 tonnes per year).
o All business aviation equivalent to one fossil fuel d l t i l l tpowered electrical plant.
Environment
Business Aviation and CAEP
o Business Aviation granted status at CAEP in 2001. o Since then business aviation increasingly active in CAEP.
o Business aviation position at CAEP established by IBAC Environmental Issues Work Group (EIWG). o EIWG meets twice per year to establish input to CAEP.
o IBAC now has dedicated environment specialist to chair EIWG and provide input to CAEP.
Environment
Challenges and Issues
1. Improve education re low impact of business aircraft on the environment.
2 Enhance best practices for operators2. Enhance best practices for operators.
3. Accelerate research and development.
4. Input to high level policy making.
5. Effective CO2 Certification standard.
6. Meaningful fuel efficiency metric.
f k l i ll7. MBM framework relative to small operators.
Environment
Non‐Harmonized Regulations
o Globally harmonized regulations are critically important for business aviation given aircraft are dispatched to all corners of the world with a moments pnotice.
o EU Directive adding aviation to EU ETS example of theo EU Directive adding aviation to EU ETS example of the discriminatory application of regional rules, diverging from principle of international harmonization.
Environment
EU ETS Issues
1. EU ETS starts in 2012, but operator monitoring plans now required. Each EU country with their own regulations. g
2. Confusion prevails.
3. 10,000 tonnes CO2 minimum inclusion threshold li i l b NOT i lapplies to commercial but NOT non‐commercial.
4. Threshold very low compared to Directive provisions for non‐aviation fixed facilities (25,000 tonnes).( , )
Environment
EU ETS Issues
5. All non‐commercial operators included, even if contribution is 1 tonne CO2 per annum
6 Simplified provisions for small emitters not yet6. Simplified provisions for small emitters not yet agreed to by EU
7. Extremely high administrative burden on small iemitters
8. Free allowances of essentially no value to business aviation
Environment
UK as an Example of High Costs
UK Regulations are example of very high administrative burden on business aviation. Regulations include:
o$1 100 fee to file a plan and $660 to change ito$1,100 fee to file a plan and $660 to change it
oAnnual small emitter fee of $3,800
oLarge fines for being even a day late
oAdministrative fees for a typical non‐EU business aircraft operator making an annual trip to the UK are approximately 6 TIMES THE COST OF THE EMISSIONapproximately 6 TIMES THE COST OF THE EMISSION CREDITS.
Environment
Air Traffic Management
Business Aviation CNS/ATM Plan
o IBAC Coordinates input to the ICAO Global Air Navigation Plan through the Business Aviation CNS/ATM Plan. /
o Plans and activities are coordinated by the IBAC CNS/ATM Advisory Group, consisting of Business Aviation Associations and a number of aircraft OEMsAviation Associations and a number of aircraft OEMs.
Air Traffic Management
Challenges and Issues
o Air Navigation fees and charges must recognize the size of aircraft (weight factor)
o Fair charging needed globallyo Fair charging needed globally
o Global Air Navigation Plan should recognize business aircraft time constraints on equipage
o Business aviation must be involved in planning
Air Traffic Management
ConclusionConclusion
f hBusiness aviation is a STRONG SUPPORTER of the ICAO mandate. Probably its strongest.
The industry places critical importance on HARMONIZATION OF POLICIES, RULES AND PROCEDURESgiven its global operations. g g p
The Business aviation community is PREPARED TO HELP AND CONTRIBUTEAND CONTRIBUTE.
ConclusionConclusion
We are happy to answer any questions...
