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Persistent uncertainty

Submitted by Paul Maurer on Monday, 10/04/2010 - 04:25

While commercial airlines are enjoying a return of revenues and passengers close to pre-recession levels, the business aviation sector continues to adjust to persistent weakness and uncertainty. Although the industry has largely improved from recession levels, it appears to be lagging behind the economy at large (as usual). In just the last month, Cessna announced a further round of layoffs, Hawker Beechcraft cut 350 workers, and Piper reduced its workforce by 6%; reflecting lowered forecasts for business aircraft sales. Lastly, stalwart NetJets is considering the possibility of shutting down in light of challenges including negative publicity from ex-employees.

The business aviation industry is not without its supporters, however. Congress incorporated as part of the recently passed Small Business Jobs Bill a “bonus depreciation” provision allowing companies to take a bigger deduction on business aircraft purchases, 50%, in the first year of ownership. Kansas Senator Sam Brownback is calling for the International Trade Commission to study questionable foreign government subsidies of the business aviation industry. That announcement came (not surprisingly) as Embraer announced increasing market share and an unbelievable 50% share of the light jet and entry level jet market just 2 years after entry.

Furthermore, a couple of mainstream press articles enumerated the potential cost savings versus commercial air travel achievable (in rare cases) through chartering aircraft and through brokered jets or fractional shares. As travel managers increase their attention on the ROI of travel expenses, this type of publicity will help business aviation providers open more doors in the corporate travel world. Although one would think that ever increasing airline fees, capacity cuts, and ambiguous fare pricing would be plenty to encourage an investigation of business aviation alternatives.

Attempts by certain business aviation providers to re-brand, form partnerships, and put a new spin on traditional per-seat service are not without merit in attracting needed attention. However, one gets the feeling that a truly cost saving business aviation alternative, if one is possible, just might cure both commercial and business aviation travelers’ woes.

(Excerpted from the September, 2010, igojet e-newsletter. To receive future e-newsletters by email as well as the latest version with links to industry articles used for this entry, please subscribe here)

“New Normal” seen in travel, biz av

Submitted by Paul Maurer on Tuesday, 08/31/2010 - 03:44

The term, “new normal”, is a popular term being used to describe permanent behavioral changes resulting from the great recession. But does it apply to the travel industry? A recent article in the WSJ referred to an economic “new normal” pointing to fundamental shifts in unemployment, credit, and growth becoming permanent for the foreseeable future. In the travel industry where most categories are now rebounding, a “new normal” in buying does appear to be taking hold. Similar to the larger economy, travel spending pressures in 2008 & 2009 appear to be affecting buying behavior for good.

These trends are unmistakable in the corporate travel industry but are also evident in the business aviation industry. 75% of corporate travel policies have been permanently altered to cut airline travel costs. Ever expanding airline ancillary fees are forcing business travelers and travel managers to modify air travel procurement processes. And executives at American Express Business Travel concluded that a “new business traveler” has emerged, characterized as being flexible, adaptable, and very cost-conscious, amongst other “new normal” traits.

Similarly, irreversible changes appear to be taking hold in the business aviation sector. Entry level class jets are increasingly becoming a key segment for manufacturers and buyers, having not even existed 3 years ago. Of 355 business jet deliveries in the 1st half of 2010, over 25% or 92 of them were comprised of either the Phenom 100 or Cessna Mustang; Cessna reported that almost 50% of overall business jet deliveries in Q2 were Mustangs. Of Embraer’s 60 total business jets delivered in the half, 51 were Phenom 100′s. Again, this category didn’t even exist 3 years ago! One forecaster predicted that overall 2008 delivery & revenue levels will not be reached again until 2015. Further portending spending changes in the business aviation space, NetJets and its partner MarquisJet are shrinking to adapt to downward buying behavior.

Like every industry, business aviation and travel will adapt to these procurement changes and emerge healthier in the long-run. Some newer players in business aviation already appear to be taking advantage, including Linear Air’s growing VLJ service in the Northeast and Delta AirElite’s growing bundled private/commercial air program. Time will tell if these changes last and do, indeed, become “normal”.

(Excerpted from the August, 2010, igojet e-newsletter. To receive future e-newsletters by email as well as the latest version with links to industry articles used for this entry, please subscribe here)

E-newsletter kick-off

Submitted by Paul Maurer on Tuesday, 07/27/2010 - 08:46

This week we are officially kicking off our e-newsletter series.  Every few weeks, we’ll be releasing a new e-newsletter written to keep business travelers and corporate travel managers better informed about business aviation. More specifically, the goal is to provide an unbiased view of trends, developments, and changes within the industry that help readers form more informed opinions about utilizing business aviation as a productivity enhancing tool.

Each newsletter will contain 3 parts:

  1. Key Indicators From The Field – a round-up of business aviation developments written in article form.
  2. Industry Articles Discussed – list of news articles discussed in Part 1.
  3. Company News & Updates – updates on igojet developments, news, and progress (this is the only unbiased part)

We know your time is busy and believe that a monthly e-newsletter constructed in this format will provide you with the easiest way to digest the latest business aviation (and igojet) developments affecting corporate travelers and travel managers. If you have comments and suggestions on how to improve our e-newsletter, please let us know here.

If you are not yet receiving our e-newsletters, please go here to subscribe – you will immediately receive the latest e-newsletter upon signing up.


Welcome to the new igojet site!

Submitted by Paul Maurer on Tuesday, 06/01/2010 - 08:54

Welcome to igojet! I’m pleased to share details of this first-of-a-kind travel reservation service with you.

Our goal is simple: to lower the cost of business jet travel so more travelers can enjoy its advantages.

Our per-seat, on demand travel service will let you enjoy the convenience, reliability and safety of travelling by business jet without the traditional cost structure of charter, jet card, and fractional models. Why pay for use of an entire aircraft when you are traveling by yourself?  Why pay for aircraft overnight or re-positioning charges when you are traveling in one direction on a given day? And why pay for 2 hours of flight time if your trip requires less time to reach your destination?  With igojet, you will only pay for the cost of your travel.

By booking your business jet travel through igojet, you will leverage the cost sharing advantages of our model while navigating a very familiar itinerary reservation process. While you may be sharing an igojet-booked flight with other passengers, we believe our target travelers will find this a small price to pay relative to the cost savings on a typical business jet trip.

I encourage you take a close look at our service on the pages at this website. Then take a closer look at your current business aviation spending and determine if there may be opportunities for savings with our service. Since the cost sharing advantages of our model require a minimum number of travelers, we don’t plan to launch our service until we can convince enough companies like yours that we can lower your business aviation costs and improve your travelers’ productivity.

Please let us know if you have any questions and we look forward to hearing from you.

- Paul
Founder & CEO


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Igojet arranges flights as agent for its customers on FAR Part 135-certificated carriers. Igojet has no corporate affiliation with any air carrier and does not schedule or operate any flights. Instead, igojet aggregates customer requests on a per-seat basis and negotiates with certificated carriers on the customer's behalf to obtain the best value based upon each customer's independently selected itinerary and related criteria.

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