ExecuJet Aviation chairman Niall Olver
He pioneered business aviation’s global migration, but he still believes the industry has plenty of room for improvement.
Today, many business aviation companies are pursuing opportunities in emerging markets around the world. Niall Olver, chairman of ExecuJet Aviation, can legitimately claim to have been a pioneer in this regard. With roots in South Africa, his company has been operating on multiple continents since the early 1990s; and it now provides aircraft management, maintenance, charter and other bizav services in Europe, Africa, Asia, Australasia, Latin America and the Middle East.
In 2005, the firm even ventured into the manufacturing business, when it surprised the market by launching the versatile SPn jet in collaboration with Germany-based Grob Aerospace. ExecuJet subsequently bought a controlling stake in Grob but the SPn program failed in 2008 and Grob declared bankruptcy. That same year, the bizav industry was plunged into the morass of the financial crisis. But Olver—a one-time IBM systems engineer who has been in aviation for more than two decades—was undeterred, and today he remains upbeat about the industry. As he suggested during our interview in Geneva, Switzerland, however, he believes some parts of the business are still not on solid foundations.
Since you got into business aviation in 1993, the industry has had some great years, but also some rough times. If you knew then what you know now about how things would play out, would you have steered clear of this field and stayed in information technology?
On the risk-assessment basis, business aviation doesn’t make sense. But once you enter it, it is hard to get out of it because it is so compelling. The real problem isn’t so much the industry itself; it is that many people in it are too romantically attached to aviation and there is too much silly money. That corrupts the margins. The field attracts all sorts, and the approach they take to the business isn’t always rational.
Is there a need to reinvent the business model?
The underlying problem in Europe has been the state of the economy, and as that got worse, the quality of the business got worse because of excessive commercial pressure. There are simply too many players. If you want to improve the business [in Europe], you will have to consolidate it and that would be pretty miraculous as there are so many mom-and-pop operators.
But surely there has been a degree of consolidation in that you can count the leading companies on the fingers of one hand? There seems to have been some sort of flight to quality when it comes to aircraft management and charter.
Europe is still very fragmented, and service quality levels are very diverse. That said, there is definitely a movement towards better practices and a more professional environment. I don’t think the underlying problems will go away, but the market probably will mature and I think we will end up with a smaller number of larger airplanes. The need for consolidation hasn’t been helped by the fact that there are so many different regulatory jurisdictions in an international business like this.
Given the pessimistic outlook in Europe, has ExecuJet benefitted from being active on other continents?
Outside the Americas we are certainly a global player and that works very well. Europe has probably been our least profitable region. You make more money in the Middle East and South Africa than you make here. But Europe is still an epicenter in terms of financial markets, and so it still makes sense to us [to operate there]. Having our people spread across different locations avoids a single-culture mindset. We haven’t yet fully focused on Asia, but we are already in several locations there and expect to do more.
What about Africa? Some would say that’s business aviation’s hottest emerging market.
I don’t think it is going to be as exciting as Asia. There is a lot of money, but it is concentrated in limited [economic] sectors. For instance, in South Africa, the wealth is mainly in agriculture and minerals. I suppose sectors such as mining might mean more business jet use, but the growth is concentrated in only a few places—southern Africa, Nigeria and maybe Kenya. There’s still not much elsewhere. Africa is also more corrupt [than China].
It seems to me that your involvement with Grob and the development of the SPn jet was a turning point in your career. Is that true?
It’s a good point, but probably what happened [Grob’s bankruptcy] had more influence on me in terms of what’s happened [in my career] subsequently and how I’ve viewed future opportunities. I never really thought of Grob as a peak or trough. It was trough in terms of the outcome, but it also was a travesty of justice. I could have gracefully accepted it if the aircraft wasn’t going to make it or if the company wasn’t capable of doing the job.
And despite your best efforts, it was a situation that you were not able to turn around, right?
I think that was one of the most difficult things to come to terms with. And it wasn’t that bad, apart from the fact that of course a lot of money and jobs were lost in the process. It did result in ExecuJet cutting back in some areas of our business, such as ceasing to act as exclusive sales representatives for Bombardier [in the Middle East]. I still think this made sense because customers are now far more willing to buy aircraft direct from the manufacturer. There has been a movement in that direction since we took our decision.
And then soon after that decision the economic downturn came, so maybe that left you less exposed and in a better position?
The Grob situation probably was the main reason for my decision in that I didn’t want to become a victim of circumstances again, and I took that decision just in time. Most of our competitors [after the financial crisis began] were still sort of hemming and hoping that things would turn around in a few months, but it didn’t happen. So they ended up spending many more years suffering a more gradual decline, whereas we restructured and stayed profitable.
What do you think of the new Pilatus PC-24 aircraft? Isn’t that trying to fill the shoes of the Grob SPn? If you hadn’t hit those financial roadblocks, would the SPn have made it to market?
The PC-24 is going to be remarkable and, yes, quite a few of the specifications do build on what we were doing with the SPn, but it is a larger aircraft. Even pessimists involved in the program at the time agreed that we were on track to complete certification by the end of 2009. At the time, we had 115 orders backed by non-refundable deposits. So that would have supported three years of production. We would have been making a profit within three years.
So were there any lasting lessons from that situation?
Well, you have to keep learning, but ultimately you can’t let things like that make you give up.
How would you describe your management style? How do you think your employees would rate you as a manager?
I don’t really have a management style. The fact is that I depend on the people around me [to manage] the business, so I wouldn’t characterize myself as being a classical manager. But I suppose the reason I can do that is that I gravitate towards the right people, and that is instinctive. Overall, we have a very flat management structure, and if you give the right people complete freedom it works.
I’m sure that people interested in flying privately ask you for advice. What do you tell them?
Many people want to buy an aircraft right away. A ballpark figure to consider is that if you are going to fly less than 250 to 300 hours a year, you shouldn’t buy. You should charter instead. Many people who do buy an aircraft get burned and disillusioned by the total cost of ownership, especially when they realize they don’t fly as much as they thought they would.
I am not a big fan of fractional-ownership programs. There are some, like PlaneSense in the Northeast U.S., that make sense, but for the most part it’s a very expensive way to fly. To get the level of service and responsiveness you want, find a charter organization that you can trust, and stick with them.
Name: Niall Olver
Position: Chairman, ExecuJet Aviation
Previous Positions: Officer in the South African air force, systems engineer with IBM, large-systems account manager with IT group Persetel.
Education: Bachelor of Commerce and Bachelor of Science degrees from the University of South Africa.
Transportation: Holds a commercial pilot’s license. Flies a Learjet 45 for personal trips.
Personal: Lives in Zurich, Switzerland. Married with two daughters.
Charles Alcock is editor-in-chief of AIN Publications, which publishes BJT.