Bizav Activity Declines Dramatically

Business Jet Traveler » April 2009
Wednesday, April 1, 2009 - 5:00am

Business aircraft activity declined 42 percent in January this year compared with the same month in 2008. That's the conclusion of data provider ARG/US, which scrutinized arrival and departure information throughout the U.S. Hardest hit were Federal Aviation Regulation Part 135 midsize jets, with activity down 60 percent; least affected were Part 91 large-cabin jets, with activity down 32 percent. Among operational types, fractionals led the decline with a 50-percent drop. The hardest-hit aircraft in the fractional fleet were small-cabin jets, with activity down 60 percent. Overall, Part 135 activity declined 47 percent and Part 91 activity dropped 38 percent.

Meanwhile, the air-traffic-management agency Eurocontrol announced in February that business aircraft activity in Europe was down 20 percent in January compared with the same month in 2008. Spain and the United Kingdom, where traffic dropped 27 and 23 percent, respectively, were the most seriously affected among the EU's 27 member nations. Eurocontrol data comparing each month with the same month a year ago shows that business aviation traffic in the EU was down 16 percent in December and 17 percent in November.

"The UK is one of the worst-hit member states," said European Business Aviation Association president Brian Humphries. EBAA members are reporting that activity was down 15 percent for the last three months and say they don't expect much improvement until autumn.

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““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”

-David Yermack