Private Jets - A barometer for market health?

Here we are in 2011, every one of us contemplating the very real impact of the credit crunch and its legacy not just across our own generation, but that of future generations. Whilst the coalition bang on about the need to reign in spending, the city regarded as the epicentre of the meltdown, charge full steam ahead with higher base salaries and bonuses which now mirror pre credit crunch levels. Spending has been reigned in across many areas of the city with one key indicator being corporate travel. A key element of corporate travel pre credit crunch was jet and helicopter charter. Senior executives needed to travel wide and far, with ever increasing pressures on time in this new global economy.

Pre recession, it was considered the norm for investment banks and hedge funds to fly their senior executives on private jets. It only seems like yesterday that the notorious automotive executives flew into that ill fated bail out meeting on board their company jets! Today even budget airline travel has to be signed off in the majority of firms. Could a video conference achieve the same goal? Is it absolutely necessary to make the trip? However, now that the market is on the slow road to recovery, is the term “private jet” still a dirty word in the city?

The private jet cycle usually lags two years behind corporate earnings, and in line with this, we are now starting to see increased demand for private air charter across the corporate sector. Big business, in particular the investment banking sector, are utilising private jets to allow them to undertake multiple meetings, across multiple cities in one day to create new business opportunities and raise new assets. It is possible to use private jet charter demand as an indicator of confidence in the market and more importantly actual business activity across the financial sector. However, the provocative question remains – will we ever see the same utilisation of the pre credit crunch era?

Whilst private jets are more expensive than their commercial alternatives, there are obvious situations where they are essential. The decision that senior management must make in selecting between the commercial and private options remains dependant on a number of factors, with cost vs. benefit analysis carried out on a trip-by-trip basis. This analysis will focus around the probability of the trip ending in a boost to the bottom line, level of competition from other firms, a need to impress a client and finally the advantage in meeting a potential client face to face in order to judge body language. In some instances where a company are chasing new business, the potential client like to see a firm chasing the deal and making an effort. Video-conferencing will never replace physical attendance in this case.

At Execflyer, we have seen a notable increase in demand for in flight WiFi connectivity, phone facilities to allow our clients to continue working whilst in transit, ensuring the most productive use of time. The private jet minimises time out of the office for key revenue earners ensuring that the company remain as efficient as possible.

With new technology development continuing at pace, companies can ensure that time spent travelling is not down time, but time spent working. With listed firms now under more scrutiny than ever before from shareholders, assets such as private jets and helicopters are still considered excessive and unnecessary. In reality they are far from being icons of corporate excess but an essential tool required to compete on a global scale whilst maximising the most precious commodity of all……time.

For more information on any private jet charter or helicopter charter requirements, please call 01926 840057, or email fly@execflyer.com or visit http://www.execflyer.com