Economic Impact of Business Aviation on Any Country

Research shows that business aviation can bring a powerful economic boost to countries – and companies – willing to fully embrace it. Perhaps, the best demonstration of this financial windfall is North America, where business aviation has achieved a level of maturity and mass it has yet to reach in other parts of the world.

In North America, where the industry has had decades to mature, statistics to support business aviation’s economic impact are plentiful.

Just as business jets can be a productivity multiplier, they can also be a financial force, starting at the most basic, foundational level of the aircraft’s construction. Add in the daily operation of those aircraft – and all of the ancillary support services – and the economic impact is staggering.

In a report titled, ‘The Wide Wings and Rotors of Business Aviation,’ the General Aviation Manufacturers Association (GAMA) and seven other general aviation associations found that in the United States alone, general aviation – of which business aviation is a major part – supports 1.1 million jobs with a total economic output of $219 billion dollars. Furthermore, general aviation contributes $109 billion to the US gross domestic product. Of that, $69 billion is support from labour income.

The state of Georgia, home to Gulfstream Aerospace Corp’s Savannah headquarters and Brunswick completions/service centre, is among the top 10 US states for general aviation’s per capita contributions to the gross domestic product and fourth in terms of total jobs attributable to business aviation.

Gulfstream alone contributed more than $1 billion to the state of Georgia’s economy through employee compensation and supplier purchases.

Gulfstream’s economic impact is not limited to the state of Georgia. A new hangar at Gulfstream’s Westfield, Massachusetts, facility in 2013 created nearly 100 jobs and increased services at the busy business aviation hub. Gulfstream Appleton, in Wisconsin, recently added a dedicated mid-cabin hangar. And new Sales and Design Centers opened at Gulfstream Dallas (Texas) and Gulfstream Long Beach (California).

“Simply put,” GAMA writes, “general aviation means jobs. The highly skilled, good-paying jobs allow workers to support their families, participate actively in their communities, and contribute significantly to the local tax base and schools — while also designing and building aviation products that support vital activities such as law enforcement, medical transport and commerce.”

GAMA highlights an important point. In terms of companies, evidence shows the investing in and using business aircraft have definite economic payoffs. Using business jets (vs. commercial airlines) leverages a company’s two most valuable assets: its employees and their time. Using business jets increases productivity, reduces time away from the home office, improves efficiency and increases the ability to compete.

A NEXA business aviation study of the S&P 500 conducted between 2003 and 2007 showed that companies using business jets had return on equity that was 262 per cent greater than non-using companies. According to the chief financial officers interviewed as part of the study, business aircraft helped enhance performance in the areas of greatest importance to business leaders in today’s fast-paced economy, including identifying and executing strategic opportunities for new relationships or alliances; reaching critical meetings; closing transactions; expanding into new markets; and increasing contact with customers.

Business aircraft operators also had a 253 per cent increase in shareholder returns vs. companies that relied on commercial airline service. Return on assets was 218 per cent higher. And earnings growth was a whopping 434 per cent more for companies using business aircraft vs. those that don’t. The study showed a strong correlation between increased productivity (thanks to better allocation of resources, process improvements, and knowledge sharing) and earnings growth among study participants.

Other regions and countries are beginning to see the value of business aviation, too. Over the past decade, Asia-Pacific has grown to become Gulfstream’s largest international market, with 11 per cent of Gulfstream’s nearly 2,400 worldwide fleet of aircraft based there. This amounts to more than 270 Gulfstream aircraft in the region, which means the Gulfstream fleet has more than doubled there over the past five years.

In Greater China, which includes China, Hong Kong, Macau and Taiwan, the fleet has grown considerably since the first Gulfstream aircraft delivery there in 2003. Today, there are more than 155 Gulfstream aircraft in Greater China, representing a nearly three-fold increase in the size of the fleet. China alone is home to more than 100 business aircraft. Singapore is home to more than 20.

All of this growth has an economic impact, both for companies that operate jets and those that support them.

The need for companies in to expand their business around the world continues to increase and will ultimately drive business jet demand. The business jet market is maturing in China and elsewhere, and companies are realising that these aircraft are business tools that enable them to grow their business and be more competitive.

Other companies, including Gulfstream, have also taken notice of Asia-Pacific’s business aviation growth. Gulfstream has made significant investments in the region, including:

• Opening sales offices in Beijing, Hong Kong and Singapore.
• Establishing Gulfstream Beijing, a joint venture service centre with the Hainan Airlines Group.
• Opening a Product Support Asia office in Hong Kong that includes a new Asia Customer Contact Centre to supplement the Savannah-based Technical Operations department.
• Implementing a Hong Kong-based flight department to assist customers with training and entry into service of their aircraft.
• Placing more than $67 million in parts in Beijing, Hong Kong, Singapore and Bengaluru.

Other companies have been equally proactive. For example, Gulfstream worked with FlightSafety International to open the region’s first dedicated G450/G550 flight simulator in Hong Kong. And Jet Aviation, part of the General Dynamics Aerospace Group with Gulfstream, recently opened a new service hangar in Singapore. This facility triples the maintenance facility’s size and joins countless others that have opted to locate at the Seletar Airport, successfully establishing Singapore as a hub for business aviation in the Asia-Pacific region.

While the frenetic pace of the growth in the Asia-Pacific region has tempered somewhat, it still continues. And the potential most definitely exists for the Asia-Pacific region to reap the same financial rewards from general aviation that North America has.