UK Business and General Aviation Industry: A view from the Banking and Finance Industry Looking at the Business and General Aviation Industry from a bank’s perspective provides a unique insight into business finances, models and business plans which entrepreneurs put in place. How does the Aviation Industry overcome the challenges from change and why is it prepared to break some basic rules of business to do so?
I N T R O D U C T I O N
What is the industry?
What is Business and General Aviation? ICAO definition: General aviation (GA) activities. All civil aviation operations other than scheduled air services and non-scheduled air transport operations for remuneration or hire (Annex 6, Part II). For ICAO statistical purposes the general aviation activities are classified into non-commercial business flights, aerial work, instructional and pleasure flying, and other flying.
It is not just fixed wing!
It is not just turbines!
It is not just south of Watford!
The fundamental business requirement for our industry People have to keep buying aircraft!
Some of the basic rules of Business Plans They must balance risk and reward GOLD They must give the customer what they want SILVER They require a healthy and vibrant ecosytem BRONZE
The Golden rule of business plans GOLD RISK REWARD
What a bank sees of our industry
What you can and cannot finance Generally Yes Generally No Raising equity Aircraft Unsecured loans Machine tools Hangars Vehicles Airport equipment Sales invoices Stock / parts Small overdrafts Major overhauls Meaningful overdraft
How has the industry changed in the past generation? INTERNAL FACTORS EXTERNAL FACTORS Increased regulation, cost Now much easier to travel and complexity around Europe by low cost airline or train Shrinking ecosystem Technology & Light Age of austerity sports aircraft Environmental issues noise Helicopters more fun Disrupters have failed to disrupt Crowded airspace
How does our industry survive? RISK REWARD REWARD
The Silver rule of business plans SILVER Find out what the customer wants and give it to them
Who buys and finances aircraft? Average … Fixed Wing Helicopter Yacht Customer age 55 55 55 % Male 100% 100% 100% % of net worth 10% 10% 10% % of cost to run 10% 10% 10% age of asset 28 years 18 years 8 years
Why do they buy aircraft? Flying it themselves Super Yacht Skiing Shooting Holiday home Manchester United Golf Spending the kids inheritance Horse racing Divorce Rugby Plus a small one Piglets! for business!!
How do businesses make BRONZE money in GA? A tool? A toy?
The Bronze rule of business plans BRONZE They require a healthy and vibrant ecosytem
How we preserve and protect our ecosystem Have a sound business plan formulated and implemented by an effective and cohesive trade association Vs
Ecosystems enhanced with strong Corporate Social Responsibilities
Ecosystem enhanced by being open and transparent
Squirrel Vs Rat
Thank you 24
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