An Analysis of General Aviation in Europe

Dr. Michael ErbManaging Director

AOPA-Germany

International University of Applied Sciences Bad Honnef - Bonn

An Analysis of General Aviation in Europe

1. General Aviation (GA) in Europe– Definition– Statistics– Who is AOPA?

2. GA´s Economic and Social Benefits– Economy – Business Travel– Ecology– Infrastructure– Technology Transfer– Security

3. GA´s Perspectives4. Jobs in GA

1. General Aviation

Definition- General Aviation is all civilian flying except for

Scheduled Passenger and Cargo Airlines,

or expressed in a positive way:

- It´s Personal Air Traffic, just like driving a vehicle on the streets for most different non-scheduled purposes

• Promoting and Defending GA´s interests

Advocacy• News and Consultancy for Members

Information• Keeping Safety Standards High

Flight Training• AOPA-Germany has 24.000 members, the parent organisation IAOPA is with 450.000 members the biggest pilots´ association worldwide.

AOPA-Germany´s Objectives

www.aopa.de

Private Travel

BusinessTravel

Taxi Commercial on Demand Transport

Just Fun – Destination Unimportant

SportsCompetition

Motorsports

Driver´s and Pilot´s School

Law Enforcement

Firefighting

Ambulance

Agriculture

Parcel Service

Off Road / Off Runway

Crane and Skycrane

Oldtimer

Leisure and Education for the Youth

Revenues p.y.: 980 mio. €, 5% of Total Civil Aviation with 20 bn. €

Jobs: 7.200, 8% of Total Civil Aviation with 90.000

Figures for Germany, Estimate for Europe = factor 5 = 5 bn. € Revenues

AOPA-Data

Purpose GA, Share of Revenues in %

Car Traffic, PKM in %

Airlines, Pax. in %

Private

Private Travel, Sightseeing, Airsports

23,50 66,1 55

Commercial 56,25 33,9 45

Flight School 3,90

Business Travel 32,30

Aerial Work 5,60

Ambulance 16,50

Government 16,80

Statistics IGA, is it mainly “Hobby-Aviation?“

Statistics II

Aircraft and Airfields46.900 GA-Aircraft vs. ~ 4.000 Airliners3.000 GA Airfields vs. ~ 450 Airports for Airlines

Small Aircraft and SafetyWell maintained aircraft and well trained pilots produce a high safety standard:With 100 Take Offs per year a deadly accident can be expected in average after 625 years.

2. GA´s Economical and Social Benefits

Focus on Business Aviation

Trends in European Business Travel

• More and more Markets have a European dimension

• The ability to reach market partners and to be reached is an important factor for success

• Railway and Road-Traffic are on longer distances too slow

• Companies with European markets locate themselves in areas with International Airports and leave remote areas

• New Media like teleconferences can substitute business travel to a certain extend, but not fully

GA saves time because:• It is fast!

- between 200 and 800km/h on the direct line• It is quick to reach!

- reduced check-in times at regional airports- a much tighter net of access points than airlines (350/40 in Germany, 3000/450 in Europe), consequently reduced feeder-times especially in remote areas

• It doesn´t let you wait! - Because of GA´s flexibility as an individual means of transportation, travel times can be chosen on demand, without the need for time-buffers and waiting• Trave time is value time!

- GA allows undisturbed work and meetings on board

What can GA offer in Business Travel?

Cologne – Magdeburg -Brno,

with 2 h stays, can´t be done with airlines only

Cologne - Paris - London,

with 2 h stays, can be done with the airlines in ca.14 h, other means of transportation can hardly compete

Magdeburg

Rail Car Combination Airline + Car via Vienna and Leipzig

High End Business Aviation

Low End Business Aviation

Total Journey Time in hrs

60:22 52:00 33:20 10:00 13:00

Disadvantage 50:22 42:00 23:20 --- 3:00

Cost Comparison

Costs per Passenger and 100 km direct distance (PKM) in €

Minimum Maximum

Calculated Average

General Aviation 23,- 300,- 59,-

Airline *) 33,- 110,-

Railway *) 24,- 48,-

Car / Upper Midsize 12,- 40,- 17,- *) Business-Class Airline, First Class Railway

Ways to use GA aircraft

• Rental with/without crew – Like a Taxi or a rented car

• Sharing of an aircraft with/without crew– Fractional Ownership (e.g. Netjets)

• Full Ownership of an aircraft– With a paid crew or “Self-Flying Businessman“

• Saved time and an enlarged market range alone do not justify an expensive means of transportation.

• It depends on what the traveller does with the saved time and the increased mobility.

• The “value added“ per time is the key factor. Not only high Executives produce a high added value, but also specialists in urgent cases.

How to identify the optimum means of transportation

Assumptions for the quantification of the “Traveltime-Effect“:

A typical enterprise uses GA aircraft together with cars, railways and airlines. Findings of a 2001 aircraft user study.

Quantity: 75 journeys p.y. over 500 km-distance with 3,7 passengers

Saved Working Time: 1.943 hrs with car als alternative,(7 hrs per journey x 3,7 x 75)

Value Added: Average of “Opportunity Costs“ 250 €/h/pax,250 h x 1.943 €/h = € 485.000 total,

GA´s cost-disadvantage: € 117.000 p.y. or 0,42 €/pkm

Resulting “Traveltime“ Benefit: 368.000 € p.y. or 4.900 € per journey, which is factor 4,5 of the amount invested in GA.

The “Break-Even“ of GA usage is obviously lower. Not regarded are the value of an geographically increased market and the ability to work on board.

A central and a remote location for an industrial company with 700 employees differ only in the below factors:

Labour Cost: According to the spread between Hessen and Sachsen-Anhalt, 23 vs. 17 €/h, with 700 employees and 1.600 hrs

Monthly Rental: € 13 vs. € 8,50 per m²

Taxes: Example of the “Gewerbesteuer“-leverage of 450% vs. 350%

Costs for GA: 800 flight-hrs with €1.000/h in addition to other travel expenses

Assumptions for the quantification of the “Location Effect“:

Calculation-Scheme for the ”Location Effect“

Cost p.y. Central

Area Remote

Area

Cost-advantage p.y.

Remote Area Labour 25.767.344 18.655.557 7.111.787

Rental 1.672.032 1.092.267 579.765

Taxes 245.496 190.942 54.555 Additional Costs for GA

0 800.000 -800.000

Location Effect 6.946.107

All figures in EUR

Evaluation of the “Location Effect“:

The location Effect can have an even higher influence than the „Traveltime Effect“.

It´s a real phenomenon: Companies like Viessmann in Allendorf and Würth in Schwäbisch-Hall take systematically advantage of this effect by operating their own airfield and fleet of business-aircraft, far away from any central area and airport.

Egelsbach,1.400m RWY, 80.000 mvmts. p.y., satellite airfield of FRA

GA´s Infrastructure

Airfield operating costs p.y. vary between 250&500 k €, revenues via landing and user fees

With the costs for 1 km of ICE tracks = 20 mio. EUR, 4 “sports aviation airstrips“ can be built to “business standard“ airfields with a weather independent instrument approach

Engpässe: IFR-Verfahren, FoF , Runway-Länge

1977: Learjet Model 28/29, first production jet aircraft to utilize winglets.

Winglets, introduced by GA, today reduce fuel consumption of airliners by 5-7%!

In Germany GA burns 50 Mio. liters fuel p.y., the Airlines 12. bn. liters, 240 times more.

So GA´s Winglets save five times more fuel in the Airlines than GA consumes in total!

Technology Transfer 1)

Boeing´s first aircraft powered by a fuel cell was a Diamond Aircraft “Super-Dimona“ Motor-Glider in spring 2008

Technology Transfer 2)

In Brasil hundreds of Embraer EMB 202 Aircraft fly Agricultural Missions with pure Bio-Ethanol

Technology Transfer 3)

GA aircraft manufacturers like Cirrus, Diamond and Lancair have a long and successful tradition of building all composite aircraft …

… whereas Boeing´s all composite 787 has not even completed its maiden flight.

GA EcologyAre GA Aircraft just noisy fuel-burners?

- Airfields remain below all Noise Limitations for German Airports (Flughäfen), Streets and Railroads

- With modern Diesel engines a DA40 TDI consumes only 2,5l / 100 Pkm, less than a modern Boeing 747-400 with 3,7l

- A “classic“ Socata TB20 consumes 4,2l /100 PKM

GA Security, is there a threat?

W = ½ mc², so 1.200 Cessna 172s are needed to create thekinetic energy of a single Boeing 767 like at 9/11

An International Comparison

• GA revenues in the USA:100 bn. USD p.a. = 250 EUR

per Citizen, Trend: Rising

• and in Germany:980 mio. EUR p.a. = 12 EUR

per Citizen, only 4,8% of USA,

Trend: Falling, except Business

Sector

0

50

100

150

200

250

Revenue/Citizen

USAD

Why?

Area:• Europe = 7% biggerCitizens:• Europe = 70% moreGDP:• Per Citizen almost identical

GA

den

sity

in A

ircr

aft /

1 M

io. C

itize

ns

Population Density in Citizens / Square Kilometer

International Distribution of GA

3. GA´s perspectivesWhat will come?

• GA will not be a means of mass transportation, but it can occupy an important and growing niche in transportation

• Very Light Jets will significantly expand the market, reach new target groups

• New Fuels and Engines will improve ecology• New Avionics and ATM-Technolgies will

improve safety and efficiency

What does GA need?

• Acceptance of GA as an ordinary means of transportation

• Reduction of Bureaucratic Overhead: GA in USA has less but strict regulation, better economy, and even better safety records. A challenge for EASA!

• Adequate Network of weather independent GA Airfields

• Simplification of IFR-Courses in Europe, in the USA 53% of pilots hold an IFR-Rating, in Europe only 4%

• Implementation of Satellite Navigation Procedures for Approaches and En-Route

4. Jobs in Germany´s GA

• Maintenance and Production 3.070• Flight Schools 900• Airfields 1.050• Air Taxi 1.250• Police + Border Patrol 600• Corporate Aviation ~1.000

Total: ~7.200

German Corporate GA Users

Unternehmen LFZ-Typ

BASF

Heinrich-Bauer-Verlag

Bauhaus

Bertelsmann

BMW

Burda

Daimler-Chrysler

Deutsche Telekom

Duscholux

Hertie

Lego

Liebherr

Dr. Oetker

SAP

Schoeller

Quelle

Viessmann

Volkswagen

Würth

Beech King Air 300

Falcon 900

Falcon 2000, Lear Jet 35A

Falcon 50, Beech King Air 300

Hawker 800, Gulfstream V

Learjet 60, Beech King Air C90

Airbus A 320 / A 319 BJ

Challenger 604

Citation Jet, Cessna 340

Falcon 10

Falcon 900

Citation Jet

Beech King Air 300

Learjet 31

Beechjet 400

Learjet 55

Citation V, CitationJet

Falcon 900

Citation V

Thank you very much for your

audience!