Press Release

Issued by Avinode Group.

May 15, 2012

The Business Aviation Charter Market showed positive signs throughout 2011, with increased flight activity in the US and continuously strong demand from Russia and Turkey driving the European market. This trend appears to have continued into 2012 with a steady demand increase. Seasonal patterns have continued as normal through the early part of 2012, despite changing consumption trends, which includes a general downgrade trend in the upper market sectors in the U.S. market and an increasing high end with a decreasing lower end in Europe where heavy jets are gaining favor as light jets are slowly beginning to descend from their peak.

Operational effectiveness, which measures the percentage of total flight distance that an aircraft spends empty, has also been seen to vary from region to region. Aircraft in the United States and Russia experience far less empty sectors then those in Europe where aircraft generally have to fly long stretches to pick up passengers. Due to the abundance of available aircraft across the United States aircraft generally have a lower percentage of empty legs, as it is unlikely that a client would need to source a flight from outside of their own region. Russia, on the other hand, can attribute their low percentage of empty sectors to the vast distances of travel and the plethora of the aircraft near demand centers.

Of those regions compared, Europe has been found to be the least effective. This is due in part to the pull of demand from the East, where, in order to capture business, jets from Europe travel great distances to pick up passengers from Russia, the CIS, Ukraine, and Turkey. Another contributing factor in the low effectiveness score, is the fact that European operators more frequently tend bring their aircraft back to homebase after every mission, in contrast to operators from the United States who are more likely to float their fleets in order increase effectiveness.

With the EBAA showing increased interest in strengthening operational effectiveness in Europe it is important to address these discrepancies. Building on the lessons from more effective markets, it is easy to see that increased taxi time is not only more environmentally friendly, but leads to both increased revenue and an enhanced competitive edge against the commercial sector. In essence, with a higher percentage of passenger legs operators stand to make more money per hour, but spend less.