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The case for light jets in Europe

Article from EVA Magazine, EBACE Edition by Slobodan Vuckovic, founder and CEO of AirDB a member of Fincore

The business aviation industry in Europe employs some 160,000 highly skilled workers, generating around $12.5 billion in annual revenues. Yet Europe accounts for only 14% of the global annual sales of business aircraft. Why? On one level, the reason is simple. European companies up and down the scale are hugely reluctant to be seen to be buying corporate aircraft. That reluctance hardly fits with the fact that the European economy is one of the world’s strongest.

One of the more obvious reasons why European management teams find it tough to justify the capital expenditure required for a corporate jet is Europe’s unique geography and the superior nature of the European rail and road networks. So many business trips, even across borders, can be easily accommodated by taking a high speed train or driving 300 kilometres or so.

But there’s another reason. European politics tends to be centre left, with a leaning towards socialism – the kind of political environment that fosters the (mistaken) view that private jets are the playthings of billionaires and tycoons and rock stars. For the ordinary hard working European businessmen and women, using private jets is all too often seen as laying themselves and their company or brand open to getting hammered in the media.

However, as those of us in the industry know, there is a huge gulf between this faulty public perception and the actual reality of business jet usage by companies. According to the NBAA fact-book, only 3 percent of all business aircraft are owned by Fortune 500 corporations. The overwhelming majority of the remainder, some 85 percent, are owned by small and medium size companies. Moreover, in excess of 70 percent of passengers aboard business aircraft are non-executive employees and more than 60 percent of business jets and turboprops are used to reach remote locations that are not on a scheduled airline route.

A typical business aviation mission is 4 passengers on a 600-800 nautical mile business-related trip. The vast majority of city-pairs in Europe are under 1,000nm apart and a private jet offers the opportunity for a really time efficient connection. Only a handful of the most frequently connected city-pairs are over 1,000nm. One thinks here of London-Moscow (1,350nm), which is still considerably closer than the US equivalent of New York-Los Angeles (2,150nm), or Miami-San Francisco (2,250nm), or the capital cities of two Latin American neighboring countries such as Brazil and Colombia – (Brasilia-Bogota - 2,000nm).

This shorter journey distance has made Europe the showcase market for light-jets. Ironically, none of the 4 to 8 passenger aircraft that are suited to 1,000 nm business trips are manufactured in Europe.

This is despite the fact that Europe is the leader in the commercial aviation sector, since it is home to Airbus, and is the leader in helicopter technology where it has Finmeccanica helicopters (AgustaWestland) and Airbus helicopter (Europcopter). It is also, of course, able to boast the military fighter-jets Eurofighter Typhoon, Dassault Rafale and Saab Gripen. Europe also has leading OEM jet engine manufacturers in Safran/Snecma/CFM International, Rolls-Royce and IAE.

The shining star of European business aviation industry is Dassault, manufacturer of Falcon business jets. However, the smallest Falcon carries up to 10 passengers and costs close to $30 million – not exactly light jet territory! On the plus side, the two the most successful high-performance single turboprop business aircraft, namely the Pilatus PC-12 and Daher TBM900, are designed and manufactured in Europe and Pilatus will shortly be delivering the first PC-24 light jets, which could represent a real breakthrough for the European market.

Also positive is the fact that over the last few years, with the slow recovery from the global economic downturn, small and mid-size business leaders across Europe are starting to show a greater interest in business aviation. The message that in Europe, a small, hard-working team of executives can fly on a light jet to a meeting and be back home in the same day - at the cost not far from what they would pay for first-class commercial tickets. And of course, with a single flight they can reach customers in remote locations, avoiding wasting time in commercial hub connections, where the main airport is often a long way from their destination.

Business aviation is all about productivity and connectivity. And there are a lot of choices for European business travellers.

Interestingly, the airplane that was once hailed as the potential king of the four passenger, 600-800 nautical mile business trip, the Eclipse EA500, has been upgraded and reborn as the One Aviation EA550. The aircraft has now been certified for European commercial operations and has a purchase price under $3 million. Add to this a cost per flight hour of under $900 and it is a very attractive proposition as a business aircraft. The first EA550 registered for Europe charter operations is already flying, with two others registered privately. It will be interesting to see how the EA550’s relatively size-challenged cabin is accepted by European business travellers.

However, the true business aircraft poster-boy for the European market is undoubtedly the Cessna Citation Mustang, which can take four passengers 700 nm in 2 hours at the cost of $1,000 per flight hour. In the US the Mustang is mostly used by pilot-owners as a private/business aircraft but in Europe it is fast becoming the aircraft of choice for a new generation of charter companies. Austrian GlobeAir, for example, flies a fleet of 12, the UK-based Blink, which straps itself as Europe’s air taxi service, has a fleet of 10, while the Spanish charter company, Sun Aviation has a fleet of six.

The Mustang is officially still in production even though only 8 were delivered during 2015. The replacement/upgrade for the Mustang is the $4.7 Million Citation M2 - delivering more speed and more cabin space, with a private lavatory and more range. It’s been a year now since the first M2 joined the European charter market. Since then a few more have been registered, going to Denmark, Italy, Luxembourg and Switzerland respectively. They are part of a total of 41 M2s delivered worldwide (mostly in the US). In addition, Cessna delivered 56 of the CJ3+ and CJ4 light jets.

M2’s main competitor, and the Mustang’s, is Embraer’s Phenom 100E. Offering even more cabin space than the M2, and with the same long-range speed, it costs less per flight hour. However, only 12 Phenom 100E were delivered in 2015 as Embraer shifts its focus toward larger aircraft. In 2015 Embraer delivered 70 of the 100E’s big brother, the Phenom 300.

While Cessna and Embraer are concentrating on the higher end of the light jet market, the new very-light-jet about to burst on the scene is the long-awaited HondaJet. This is a clean-sheet design, fully composite airframe with a brand new GE-Honda jet engine and a completely original look thanks to its over-the-wing engine mount. After 13 years in development the HondaJet is finally being delivered to customers. With an acquisition price of $4.5 million it slots neatly in between the Phenom 100E and Cessna’s M2, but offers more cabin space and a longer range, with considerably less fuel burn. The cost per flight hour is a very economical $1,135, which is not bad for the fastest aircraft in the category.

Charter operators in Europe have expressed great interest in the model and the first European registered HondaJet was delivered in April. With Honda’s bold promise to deliver 100 units annually and the latest expansion of the Honda Aero engine plant in Burlington, NC ( with a current production capacity of 200 engines annually), it probably will not be long before we can expect the development of a bigger HondaJet with a cabin for 6-8 passengers.

Hondajet’s 13 years in development sounds unreal compared to the Swiss manufacturer Pilatus’ success in delivering a brand new light-jet in only 4 years, from clear-sheet design to the initial deliveries. Pilatus surprised the aviation market at EBACE 2013 with the announcement of the PC-24 and by the following year Pilatus had pre-sold the entire 3 years’ worth of production. If testing and certification are on schedule, deliveries will start in 2017. The $9 million jet is capable of flying nearly 2,000 nautical miles with acabin large enough for 6-8 passengers, making it the first European light jet (as opposed to very-light-jet).

2016 started as the year of HondaJet, but we have another very light jet coming to market later this year. The $2 million Cirrus Vision SF50 can accommodate a 4 passenger 600-800 nm mission at a cost of only $660 per flight hour. This is a very impressive proposition made possible mostly by the aircraft’s composite lightweight airframe powered by single jet engine mounted on the top of the fuselage. It will be ideal for European customers interested only in private operation, as was noted above, single-engine aircraft are not as yet allowed to be deployed for commercial operations.

However, European regulators are considering lifting this restriction and if they day, then 2016 could be a truly historical year for European business aviation. Not only would business travellers and charter operators be able to benefit from the new Cirrus Vision single-jet’s low cost per flight hour, but European made single-engine turboprop aircraft would also be able to be used for charter operations. They could access smaller airports in remote locations and fly 4-8 passengers at an even more competitive cost per flight hour. Such a change would be a tremendous boost for business ownership of light jets across the whole of Europe.

The original article published in the EBACE edition of EVA Magazine

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