Airlines vs Biz Aviation : A synopsis of David Esler’s "Are the Airlines Out to Destroy Business Aviation?"
Airlines Bullying BizAv?
As the Airline industry is suffering from record-high oil prices, Business Aviation is flexing its small wings in the sky. Most major airlines would obviously prefer executives and corporate employees aboard luxurious business jets to be sitting in their business- and first-class seats. However, that type of competition might not be all that concerns major airlines with their so-called Business Aviation rivals...
Airlines would like to see Business and General Aviation pay their share of the costs required to sustain the air traffic control (ATC) system. More importantly though, it is also said that airlines want to amend ATC's "first come, first served" rule as they believe it's the main factor contributing to the congestion in the air and at airports. The airlines have consistently requested priority in the system by appealing to Congress and the FAA, more so now than ever, considering their dismal fiscal condition. Some believe that it is one of the many steps they are taking to crush Business Aviation. "It goes without saying that if the airlines ever were able to have first-come, first-served access overturned in their favor, the result would be catastrophic to business aviation operators and, especially, charter and fractional ownership providers." David Esler
Steve Brown (NBAA's vice president) explained that the "first come, first served" rule has actually been very efficient and it provides more capacity in the system. So even though the rule might not be in the airlines' main scheduling and business plan interest, their claim about it causing congestion is misleading.
The ATA's vice president for communication, David Castelveter, believes that the airlines see Business and General Aviation as "great success stories" and are not out to destroy them. He also refuted allegations that the airlines were pressuring the FAA to get rid of the "first come, first served" policy. Like Caselveter, some say that such assertions are only myths and that it is not in the airlines' interest to "crush" Business or General aviation.
So if the "first come, first served" access is not a systematic factor to the congestion in the air, then what is? And given that congestion stems from the airlines' business plan of over-scheduling, are there other reasons why the airlines might be out to destroy Business Aviation?
Jet at EPPS: Picture I took of a jet parked at EPPS (an FBO in KPDK, Atlanta GA)
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Let them pay their share!
I have no idea how I stumbled on to this page and I'm not even a frequent flier - business or otherwise. But having read this piece, I have to say, that for the first time in my life, I have to side with the airlines. When someone wants to make use of a public infrastructure that has huge costs to set up and maintain, then they had better pay their share. But whether it's gonna happen is questionable.
I want to make an analogy here: take a city road that's used by thousands of single-occupant cars and SUVs (not unlike the business aviation aircraft) and the occasional bus (like the airlines). The single occupant vehicles are taking up far too much road space per person, compared to a bus - so they should be paying proportionately more road tax. Same with the business and private aircraft - if they are going to add to the load of the ATCs, then they had better pay their share. And, just as buses should have priority on the city roads (simply because they carry more passengers who depend on the bus schedule), the airlines should have priority in the skies.
Having said that, it's about time everyone scales back on the amount of flying. If that means the closure and scaling down of more airlines, well that's too bad. The share of the airlines in greenhouse gas emissions is far too high to ignore anymore. The first to go should be the business and private jets - there is something obscene about this whole idea of someone having a whole jet aircraft at his disposal.
Corporate jet expenses rise at big firms
by Hugo Martin
LA TIMES
April 5, 2010
CEOs have increased spending about 9% on the personal use of corporate jets over the last year, says a study by the Corporate Library.
Jets
In fiscal 2008-09, the average corporate jet expense was about $131,000, according to a study by the Corporate Library. Above, jets at Santa Monica Airport. (Mel Melcon / Los Angeles Times / May 12, 2008)
By Hugo Martín
If you're a business traveler who has been flying coach to save your company money, you may need to sit down to read the following news.
Chief executives of some of the nation's biggest firms have increased spending about 9% on the personal use of corporate jets over the last year, according to a new study of corporate expenses.
The findings, published last week by the Corporate Library, an independent research firm, are based on data from nearly 340 major U.S. companies' expense reports for personal jet use in the last two fiscal years.
In fiscal 2008-09, the average corporate jet expense was about $131,000, according to the study.
The biggest corporate jet expenses were filed by Gary Convis, the former CEO of Dana Holding Corp., an auto parts and systems supplier in Toledo, Ohio. Dana Holding paid nearly $1.2 million in aircraft bills for Convis and reimbursed him almost $25,000 for the personal taxes he paid, the study said.
A Dana Holding spokesman said the company paid only $165,000 in travel expenses for Convis in 2009. Convis stopped using the private jet in May and switched to commercial jets, according to the company's proxy statement.
No. 5 on the study's list of top spenders was Howard Lester, outgoing chairman and CEO of Williams-Sonoma Inc., the report said. It said the San Francisco-based retailer paid more than $675,000 in expenses for a jet leased from a company owned by Lester.
Representatives for Williams-Sonoma could not be reached for comment.
Michelle Lamb, who compiled the study, said the Corporate Library looks into such expenses to give investors an idea of the spending practices of companies' leadership.
"We see these spending practices as a red flag," she said. "We thought we would see more restraint."
Conferences are staying frugal
While the economy shows signs of a rebound, meeting planners continue to watch their nickels and dimes.
That's the conclusion from Benchmark Hospitality International, a Texas company that operates 30 hotels, resorts and conference centers worldwide.
After analyzing bookings and sales practices at its properties, the company came up with these business meeting trends for 2010:
* More planners are booking in the short term, unwilling to commit early.
* Meetings are smaller, in some cases including only half as many participants as in the past. They are also shorter, often by one day.
* Planners are cutting out spas and golf outings, focusing instead on the basics.
* Demand for lower prices and more concessions is increasing.
* Fancy meals are being replaced with buffets. "For the first time," the report said, "buffets are seen as perfectly acceptable for all executives -- even those from Fortune 500 companies."
Airlines trade jabs in their ads
The battle is on.
As part of its campaign to remind fliers that Southwest Airlines doesn't charge for the first two checked bags, the low-cost carrier has been taking direct shots at its competitors, sparking a clash of advertising.
Southwest took a jab at AirTran Airways last month with a TV commercial called "Battle Cry." In the ad, a group of Southwest employees stand on an airport tarmac and open their shirts to reveal "Bags fly free" spelled out on their chests while people on a competing airline's plane look on.
The name of the competing airline is pixelated in the commercial but resembles that of AirTran, which charges $15 for the first checked bag and $25 for the second.
AirTran responded with an online ad called "Skip the Stampede," which portrays passengers dressed as cows racing into a plane. The logo of the cattle-cramming airline is pixelated but looks like Southwest's.
The AirTran video ends with the message: "Skip the stampede. AirTran Airways. Assigned seats, business class and Wi-Fi on every flight."
Southwest will keep producing humorous ads and doesn't plan to counterattack, spokeswoman Whitney Eichinger said.
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