Jet-setting in Africa
Taking flying to the next level
One of the privileges of the wealthy is criss-crossing the globe in business- and first-class aeroplane cabins, commuting between Johannesburg, London, Hong Kong and Abuja. Airlines go over and above to provide creature comforts for the travellers able to pay these premium fares. But as is the nature of human beings, we are always in search of bigger and better – and the latest craze is taking to the skies in your own personal jet!
Ettore Poggi, Managing Director, ExecuJet Africa, gave us some insights into the business of private jets in Africa.
What services does ExecuJet offer?
ExecuJet is a global business aviation company offering a turnkey solution to high net-worth individuals, corporations and governments. We sell a range of turbo-prop and jet aircraft, we manage them on behalf of the owners (for whom aviation is not a core focus), we charter them to third parties (where the owners require a revenue stream) and, of course, maintain them.
Has there been an increase in the demand for jets in Africa?
This continent is a huge growth area for aviation largely due to the poor ground infrastructure; many African airlines are banned in Europe and considered unsafe. There are increased business opportunities as mineral wealth is discovered, particularly oil, gas and manufacturing metals like iron, nickel and copper.
Is the increase more in the chartering of jets or the sale of them?
There is certainly an increase in the charter of aircrafts; most companies or individuals will ascertain the sustainability of the use of a private aircraft before purchasing one. Aircraft sales have been affected by the worldwide economic downturn over the past four years but it is slowly picking up.
What would you attribute this increase to: more wealth or people realising the benefits?
It’s a bit of both but there’s also a third factor: image. Certain African countries are starting to flaunt their wealth through the purchase of private jets – especially Angola and Nigeria. However, it should be said that infrastructure development is lagging and there is business to be done now – that’s where private aviation is beneficial.
With commercial airlines offering more and more benefits and comfort to fliers – what benefits do personal jets offer that commercial flights don’t?
Personal jets offer significant intangible benefits over airlines that, by their nature, the scheduled air services cannot match. Time flexibility, protection of proprietary information, on-board security, and less travel stress are just a few advantages. Where time has value you can’t beat a private flight. Some of the larger, inter-continental business jets such as the Global Express, Gulfstream 550 and BBJ offer comparable comfort to any business class or first class cabin, but it comes at a price. There is increased investment in inflight entertainment systems for business aircraft but most of the development is driven by the airline business.
Do you get more business from South Africa or from Nigeria?
Our South African operation has been established for over 22 years and is our largest base in Africa. Since we opened our new Fixed Base Operation (FBO) at Murtala Mohamed Airport in Lagos, Nigeria in 2012 we have seen the potential this market has to offer and we do expect to grow this business unit dramatically over the next five years.
What kind of clientele do you service?
We are predominantly a business aviation service so typical clients will be Fortune 500, JSE and several large private corporations. Approximately 85% of our charter business is corporates with the balance being private individuals and the high-end leisure traveller.
What is your most popular make of aircraft?
Our most popular aircraft brand is Bombardier and we operate all the business jets they manufacture such as the LearJet, Challenger and Global Express families of jets.
Are there any myths you would like to dispel about the services you offer?
Probably the biggest myth is that private air travel is only for the rich and famous. The days of the company aircraft being the “Chairman’s Chariot” are over – there is a definite cost justification for use of private air travel for those forward-thinking companies or individuals for whom time has value. When a proper, true trip cost comparison between different modes of transport is done (including labour cost, travel risk, nights away, entertainment, connecting flights etc.) private air travel often proves the best solution.
How can a large corporate organisation benefits from using ExecuJet?
There are so many areas ExecuJet benefits organisations. Some own their own aircraft and have their own flight departments. Whenever they visit a country with an ExecuJet base we offer fuel, aircraft and crew services to help them on their way. They may recognise the need to own their own aircraft but don’t want the risk of operating it – ExecuJet becomes their out-sourced flight department. The international trend is for large corporations to scale down their internal flight departments and sell off non-core assets (e.g. business jets). This is where ExecuJet fulfils a service need – an organisation may still require non-scheduled air services but contract with a third party operator like ExecuJet to handle their charter contract safely and professionally. ExecuJet invests millions of Rands in ongoing crew simulator training, quality and safety systems and maintaining ever-changing regulatory knowledge to ensure that any flight meets and exceeds safety standards as laid down by a large corporations risk management department. We even consult to those companies or individuals wishing to set up a flight department, sharing best practice to international standards.
What are the challenges that you sometimes face in your business?
The obvious one is high input cost – aviation is a US dollar-based industry and typically fuel accounts for between 20% and 35% of any flight. Therefore we have to manage exchange rate fluctuations and the aviation fuel price. The Civil Aviation Authority in SA is trying to mirror the regulatory standards of their European and US counterparts but is woefully under-skilled and often issues policy difficult to understand or implement. The African aviation safety record is abysmal – depending on your source only 4% of the world’s flying occurs in Africa but accounts for 38% of the accidents. Whenever there is an accident (e.g. the December 2013 LAM Embraer E190 airliner crash in Namibia) there is a negative impact on Africa’s aviation image, which affects all operators – it’s a small community.