Up, up and away for the busy executives

DESPITE unprecedented awareness about the impact of air travel on global warming, aircraft manufacturers forecast worldwide deliveries of new business jets will come close to 10,000 over the next decade – almost double the production rate for the previous 10 years.

Adding in very light jets, the forecast rises to about 18,000.
Private air travel will always be regarded as a hallmark of corporate excess in some quarters. But many boardrooms, emboldened by a favourable economic climate, are increasingly confident such an apparent extravagance can be justified if it enables the highest-paid executives to maximise the time spent engaged with their work.
The longest order lists are coming from fast-growing economies with vast land masses that are difficult to cross by other means, according to the General Aviation Manufacturers Association.
For the past 20 years, the US and Canada have generated about three-quarters of business jet sales.
Last year jet-makers reported that, for the first time, most orders were coming from outside North America.
There has been an unprecedented surge in the number of multinational firms and wealthy individuals using private aircraft as “air taxis”.
The latest figures available show 6.9 per cent of European flights, for example, recorded by air traffic control authorities were “business aviation” in 2005, with an estimated 40 per cent flying empty on “positioning flights” to pick up passengers.
The number of business jet flights was growing at 8.9 per cent two years ago – twice as fast as the rest of air traffic – and is believed to have accelerated since.
According to a spokesman for jet-makers Bombardier, businesses are waking up to the benefits of executive jet travel which have long been accepted in America. “They can save time and they can save money,” he says.
Discreetly pushing this argument, away from the media and investor spotlight, business jet operators have been enjoying a successful sales drive through top boardrooms.
NetJets, a firm that allows customers to share aircraft ownership, increased flights by more than a third last year to almost 63,000.
In just five years, the company, owned by legendary US investor Warren Buffett’s Berkshire Hathaway conglomerate, has built a customer base which boasts some of the largest listed companies.
The names of customers, however, remain a closely guarded secret – as they do throughout the industry.
“There will always be someone who will point to this kind of expenditure as evidence of corporate excess,” says Rob Dranitzke, NetJets’ head of business development.
Similarly, he says, businesses recognise that revelations about executive jets are not helpful even if the firm is making efforts to reduce its overall carbon footprint.
Marks & Spencer chief executive Stuart Rose was the latest high-profile business leader to have his travel arrangements scrutinised after the company launched a publicity campaign to highlight a series of progressive environmental policies, many of which have been applauded by green campaign groups.
Later it emerged that Mr Rose, who led M&S’s “Plan A” campaign (he insisted: “There is no plan B”), used a company aircraft not only for store visits but occasionally for personal trips.
“Absolutely I use it, but it is not my own personal steed,” he said two months ago.
Several top international businessmen regard such expenditure as unnecessary perks rather than “productivity tools”.
Microsoft’s Bill Gates and Ikea founder Ingvar Kamprad – the world’s richest and fourth richest men respectively – have reputations for personal frugality, earned in part by taking economy class flights, setting the tone for cost-control within their business empires.
Those who believe business jets are largely boardroom perks point to European air traffic data which shows recreational destinations such as Nice, Cannes and Mallorca among the top 20 destinations for “business aviation”.
MaxJet, the business-only scheduled jet operator, says one of its fastest growing routes is London to Las Vegas. A spokeswoman said companies were block-booking this kind of corporate trip as a reward for staff.
Judith Morton, of SkyJet International, said many wealthy individuals and executives used jet travel to ensure they were able to move with ease between homes in tax havens and business interests elsewhere.
“The lines between business and leisure are blurring. Although the initial focus of a trip may be business, customers may take their family with them and add an extra day as leisure time.”
Mr Dranitzke, of NetJets, insists: “Few people are doing this because the seats are more comfortable ... They are trying to maximise the time they spend with their work and their loved ones.”