Willie Walsh of International Airlines Group is another member of this CEO '100 club', reveals the American Express report, written by the Economist Intelligence Unit.
As this report is published only a few weeks after easyJet entered the FTSE 100, it would be nice to think that these frequent flying CEOs are contributing to the UK budget airline's success, criss-crossing Europe and paying a few quid extra to get an aisle seat. Alas, the reality is sure to be more glamorous. For one thing, Willie Walsh is unlikely to fly planes not owned by British Airways (or Iberia). Meanwhile, his high-powered CEO peers in charge of companies outside of the airline industry are more likely to be flying around by corporate jet.
These days, flying by private jet is arguably one of the few travelling experiences that remain truly exclusive. For better and for worse, much else about travel has become more accessible and affordable and egalitarian. Lounge entry can be paid for at Stansted airport and once exotic locations in the Swiss Alps are now serviced around the clock by the ubiquitous orange of easyJet. Private islands can probably be added to private jets in the exclusive pile, but there is little else short of space travel.
Both of these 'private' industries (if the buying and selling of private islands qualifies for this categorisation) are kept going by a similar clientele of rock stars, Hollywood actors, royalty and the aforementioned captains of industry (to emphasise the overlap, Oracle CEO Larry Ellison recently bought an airline to serve the private island he picked up last year). Yet the private jet industry is going though a period of transition.
Earlier this year, Hawker Beechcraft left Chapter 11 bankruptcy protection. The heavily indebted company, now renamed Beechcraft, was the result of a leveraged buy-out just before the financial crisis by a consortium including Goldman Sachs. Fresh out of bankruptcy protection, it is now focussing on its military offering as its business jet operations are scaled back. With Beechcraft exiting the VIP area, the list of companies making private jets is an even more select group – mostly famous North American brands like Gulfstream, Cessna and Bombardier – maker of the Learjet, together with France's Dassault Aviation and Brazil's Embraer.
Nonetheless, it is not all bad news for the private jet industry - nor for corporate Europe. Canada's Bombardier claims to be the industry leader. In 2012, it delivered 19 aircraft to 14 European companies (not including a giant contract from VistaJets, a kind of pay-as-you-fly Zipcar of the skies, which has ordered 56 jets worth nearly US$8bn, all of which are to be based in Europe). The number for 2012 is down on the 29 aircraft it delivered to European companies in 2011, confirmed a company spokesman, but it is up on the 14 it delivered in 2010. As an indicator of where corporate demand in Europe is coming from, four of the 19 planes delivered last year went to Switzerland, while three ended up in the UK.
In fact, Bombardier is remarkably bullish about the future of private jets. In the short term, it predicts the industry will surpass its peak year in 2008 by 2016. Over the next twenty years, moreover, it forecasts total demand for aircraft to reach 24,000 jets at a value of US$648bn, which is more than three times the value of aircraft delivered during the previous 20 year period. Demand for nearly 4000 of these aircraft is predicted to come from Europe, the second biggest market. North America, the biggest market, is expected to want close to 10,000 planes – fours time as many planes as forecast for China in third place.
These long-term forecasts factor in an uptick in the global economy. During this time, European CEOs look set to continue flying the corporate flag. The Amex report features a survey of over 300 European business executives, half of which were CEOs, CFOs and other members of the C-suite. When asked for their travel priorities, these corporate high flyers listed getting from A to B without any delays as their top answer – a ringing endorsement for travelling by private jet. Meanwhile, fast track check-in and adequate baggage allowance featured less prominently - obviously less of a concern when flying on the company's plane.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
