While the private jet industry — like the rest of the economy — has experienced its share of turbulence in recent years, now is the time to take advantage of the value in the market, both in price and in benefits that a private jet adds to your business.
According to the Wichita Eagle, reporting on a presentation by Michael Scheering, Signature Flight Support president, the business jet market has begun to recover, although that recovery has been muted.
Scheering says that Fortune 200 companies are flying as much today as they did in 2008, but small-business owners are hesitant to use business aviation as much as they did in previous years. That hesitance is due, in part, to uncertainty about the tax structure for small businesses and their future income, which leads to a lack of confidence and less use of private jets, he says.
However, not only is it possible to get a good value on a jet in today’s market, but owning one can add value to your company, according to Jeffery Reich, principal of Elevon Consulting LLC, writing for Forbes.
Studies of the S&P 500 show that the use of business aviation contributes to the financial success of companies, Reich says.
He argues that using a business jet can help a company make more money faster, pointing to a NEXA Advisors report that shows businesses that use private aircraft grew their top line six percent more than those not using business aircraft. A 2009 study showed that:
- earnings growth on an annual average was 434 percent higher for users of business aircraft than for non-users
- total stock and dividend growth was 252 percent higher for users
- total share price growth was 156 percent higher
- market capitalization growth measured by market value growth was 496 percent higher
And, because these figures are from the period in which auto makers’ use of corporate jets was challenged by politicians in late 2008, growth figures may be even higher now, Reich writes.
The key to turning the purchase or ownership of a private jet into a business advantage lies in optimizing its use, he says: “taking the time to determine what value air travel can provide your particular business strategies.” Considering business aircraft from a cost-focused approach will only determine that it’s “expensive,” and you will compromise safety and potential value.
Reich recommends that businesses use the same processes in determining whether and how to use private jets. Start with a strategic alignment, taking an unbiased approach and people who can speak to both the business and aviation sides of the table. Eventually, aviation will become just another seat at the table, and another tool in the arsenal of sustainable ways to generate revenue, he says.