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Archive for May, 2011

Demo’ disparity

Submitted by Paul Maurer on Tuesday, 05/03/2011 - 09:22

You know business travelers are getting fed up with the airlines when the government needs to step in and ramp up consumer protections, as the DOT did this month. Higher bumping penalties, lost bag refunds, and international flight tarmac delay rules ought to address several of the top air travel difficulties expressed by business travelers. However, it’s unclear whether real progress can be made on improving travel times, a problem area that fills 3 of the top 6 of these difficulties and is borne out in recent Transportation Department complaint data.

Complicating already inefficient travel on the airlines are higher fuel prices. Airlines are cutting capacity on less profitable routes and raising fares, with fares expecting to rise another 8-12% in 2011. Some airlines are responding but generally are focusing their efforts on premium class travelers, a disproportionate source of profits. For example, US Airways decided this month to add first class seating to 110 regional jets. While JetBlue plans to add fast-track security for its premium paying customers.

Meanwhile, business aviation continues its uneven recovery to pre-recession levels. Overall volume in March was up a meager 4.7% vs. a year ago, while charter business was down 3.5% over the past year. Per recent trends, business aviation use at the upper end (executives’ biz jet perks show no signs of abating and the fractional sector is rebounding) while softness in used light and mid-size jet prices indicates a struggle to regain the non-ultra-rich-C-level segment.

Encouraging news, perhaps fueled by optimism about future entry level charter demand, includes Honda’s on-going push to get its jet to market and PiperJet suppliers‘ ramping up production. There was even news this month that the Adam 500 Piston Twin may be revived, an aircraft whose jet sibling was at the center of may air-taxi discussions from a few years ago.

So, while I’m afraid that the disparity between business jet and commercial airline traveler demographics is as wide as ever, we can’t count out the entrepreneurial will of those in the biz av sector to bridge that gap. Keep it up!

(Excerpted from the April, 2011, Igojet e-newsletter. To receive future e-newsletters directly to your Inbox, please click here and sign up)


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