CORPORATE AIRCRAFT: THE DIFFERENCE BETWEEN THE RICH AND THE SUPER RICH

(article written Jan 2008)

Corporate aircraft are basically used for transporting groups of business people. Business jets may be adapted for other roles, such as the evacuation of casualties or express parcel deliveries. Some may be used by public bodies, governments or the armed forces. The more formal terms of corporate jet, executive jet, VIP transport or business jet tend to be used by the firms that build, sell, buy and charter these aircraft. The allied term bizprop is used by enthusiasts to refer to turboprop-powered aircraft. They come in prop and jet engines but are predominately jet engine which can be adduced for the term “CORPORATE JET”.
Once a largely American niche item, business jets have ridden an updraft of wealth creation at the very top to become the fastest-growing segment of the global aerospace industry. As the orders pile up, the limits of what is conceivable in private air travel continue to be stretched. There is a pre-owned marketplace in which aircraft are bought and sold based on their immediate availability, because new aircraft orders often take two to three years before delivery.

There are approximately 11,000 business jets in the worldwide fleet with the vast majority of them based in the United States or owned by US companies. The European market is the next largest, with growing activity in Asia and Central America. Brazil is another rising market, as is India, which has a growing class of rich executives. China is still a great unrealized hope, among other reasons because its airspace is sharply restricted by the military.
South-Africa has the most developed corporate business market in the Africa with ownership and usage spanning all categories. Back home in Nigeria individuals such as Aliko Dangote, Mike Adenuga Jnr, Arik mogul, Sir Arumemhi-Johnson, Rochas Okorocha, Babalakin Jnr are proud owners of private aircraft others are some jet age preachers and bank CEO’s.the corporate organizations such as NNPC, Ashaka Cement, Shell, Mobil, Julius Berger among others own corporate jets used primarily to ferry their executives and services.
When it comes to the question of corporate jets, everybody thinks of high-class-luxury aviation; and why not? The cost and cabin ambivalence of these class of jet are too luxurious to expect anything less! Right from the cockpit to the cabin facilities, corporate jets offer the best services to make your journey a pleasure.
Business jets evolutes with aircraft, such as Gulfstream and the Lear Jet (now built by Bombardier), which had two or three engines. Advances in engine efficiency, power and ever increasing fuel cost have rendered four-engine designs obsolete, and only Dassault Aviation still builds three-engine models (in the Falcon line). The emerging market for “very light jets" has seen the introduction of several single-engine designs as well. Also commercial airliners (B737, B747, B777, and B787 & A380) are sometimes converted into luxury business jets. The converted aircraft are often used by oil shieks, celebrities with a large entourage which may include press corps, or by sports teams, but such airliners often face operational restrictions based on runway length, airport infrastructure or local noise restrictions.

Corporate jets are primarily used for business engagements, to meet deadlines, multi-destination day trips, staff and management travel. In developed economies, corporate aircrafts are used for vacations, hunting trips, golfing, grand prix and other sporting events. Also they are sometimes used for emergencies such as medical evacuation of the sick and the seriously injured, for emergency task force, war torn areas or evacuation in the event of natural disasters. The aircraft is also used to assist in ferrying personal, basic survival materials, ferry personnel to connect an airline and sometime used for troubleshooting in civil strife areas.
Corporate aircraft are grouped into six loosely-defined "classes". They are; Heavy- these are aircrafts with large cabins, which can comfortably take 15 or more passengers. There are variants, of the commercial aircraft family that can be converted on request. Aircrafts in this category are Boeing Business Jet (BBJ), Airbus Business Jet (ABJ), Embraer Business Jet (EBJ) e.t.c. It is necessary to state here that new aircrafts such as B787 and mammoth A380 that will be coming out pretty soon from the manufacturer’s stable have been ordered for private use by tycoons in Hong-Kong and the Middle East, so we they can be aptly dubbed super heavy.
Super-Mid-Size- these are corporate jet aircrafts that are designed to fly extra-long range in a typical boardroom environment. Aircraft in this category include Falcon 2000/200EX, Gulfstream 450-500, Challenger 300-604. In this class, we have the corporate jet with the longest range, which is Gulf Stream 550 and a jet with the most advanced cabin, the falcon 2000 EX.
Mid-Size - these are corporate aircraft designed to fly mid and long range route. They seat between six (6) to nine (9) passengers. Aircraft in this category are Hawker 700 and 800, Citation III and VII, and Falcon 200 and 50. The fastest corporate jet in the world is in this class which is the uniquely designed is the citation X.
Light-Size- these are corporate aircrafts designed for short and medium range flights. It has a seating capacity that ranges between four (4) to six (6) passengers. Aircraft in this category include Citation J1, J2, J3, and Hawker 400XP.
Very-Light-Jet (VLJ): A VLJ is a jet guiding the way to a new era of business travel. The aircraft seats eight or fewer passengers, weighs less than 10,000 pounds, costs between $1 million to $3 million and can operate on 3,000 foot runways. The whole idea of VLJ is that it will offer point-to-point travel service in areas commercial airlines don’t cover, at a very low cost compared to private jet travel. Aircrafts in this category, which are presently in production, are Cessna Mustang and Eclipse 500. According to Andrew Broom, a spokesperson for Eclipse Aviation, the manufacturer of the Eclipse 500 VLJ, "The VLJ is going to revolutionize the business travel industry." Broom continues, "It's a whole new value, when you can create a whole new value you not only expand the existing markets of all the people who use private aviation today, but you open up whole new markets like the emerging air-taxi market."
Also quoting, Gary Strauss of USA TODAY, “VLJs represent the biggest step-change in business aviation since the advent of the corporate jet more than 40 years ago, bringing the market within reach of middle managers, small-business owners and the moderately wealthy, as well as boosting under-used community airports and local economies”.
Supersonic Business jet (SBJ): this is a futuristic project being financed by Mr. Robert Bass, which is to build the world’s first supersonic business jet. He was at the last Paris air show, promoting his project, known as Aerion, to aircraft makers and potential customers. The aircraft will fly above Mach 1 while the speed will be restricted over populated areas and continental USA. Quoting ,Robert Brass, “With this plane you can have breakfast in New York, fly to London, stay for four hours and fly back to New York for dinner.”
Private jets inch ever closer in size to smaller passenger planes, supersonic jets may be the next great symbol of exclusivity. For one thing, there has not been a supersonic commercial plane since the retirement of the Concorde in 2003.
On ownership there are basically three groups; the wholly owned by individuals, corporate bodies or by air charter companies. Here the owner is in absolute control and determines when, where and how he wants to fly. Its major weakness is the running and maintenance cost which is very high. This type of ownership is prevalent in Nigeria with its attendant exorbitant operating cost.
The charter are owned by airlines, air charter companies or corporate organizations, atimes individuals or organizations give corporate aircraft to airlines and companies to manage on their behalf. The advantage here is the transfer of running and maintenance cost to the organization managing the aircraft. The chatterer practically owns the aircraft at the point of boarding the aircraft.
The fractional ownership which started sometime in 1996 is a term used in connection with business aircraft owned by a consortium of companies or individuals. Costly overheads such as flight crew, parking and maintenance can be shared through such arrangements. The main difference between chartering and fractional ownership, is the ability to own an asset that qualifies for depreciation and tax benefits and may have value at the end of a specified period of time. Again, unlike most chartering you’re guaranteed to have a plane and crew available within four hours’ notice. Bailey of Maruis Jet Partners says fractional ownership is “the best way to go” if you plan to fly 101 to 399 hours per year. If you are flying for less than 100 hours, he recommends chartering—for example, through Marquis Jet Partners. The biggest private jet fractional ownership player is Net Jets. The Woodbridge, New Jersey Company accounts for some 70 percent of all business (in dollars) in the fractional ownership field. It is noteworthy to hear that, fractional ownership has come on stream in Nigeria.

Corporate aviation is booming around the world, propelled by rising corporate profitability, Mega bucks in sports and entertainment with a growing realization that time and efficiency can be improved by not relying on commercial flights or road transport systems that are increasingly subject to delays and long journey times. Over the past few years, travel headaches have reached an apex, with frequent flight delays, cancellations and longer lines at airports. The heightened security measures and increased baggage restrictions, for the business travelers, who generally place a high value on their time, these headaches have only added to work pressures.
Corporate jet business is normally nurtured by a booming economy, but lately celebrities in sports, showbiz are redefining the terrain, which was recently enunciated by John Keeble, Managing Director and Founder, Twinjet, who said: “Leisure customers have now overtaken business travelers for charters for the first time in our 25 year history and now make up more than 50 percent of our business travel. In collaborating, his assertion, the arrival of David Beckham at LA GALAXY football team has changed the traveling pattern of teams, from flying scheduled commercial flights to large business jets. Football players and other sport personalities are ferried in business jets to venues of award ceremonies or contract signing.
WELCOME TO THE WORLD OF THE SUPER RICH.