General Aviation, Essay Example

Business Aircraft

Benefits to the small and medium enterprises

The use of business aircraft can and does add value to small and medium businesses. It has been established that those companies that used business aircraft consistently outperformed those that did not; in addition, business aircraft users outnumbered non-users three to one. Creative use of business aircraft can drive revenues upwards, increase profitability and improve efficiency.

The American businesses have a competitive edge due to increase use of business aviation both internationally and nationally. This is evidenced in great enterprise and shareholder value. In the list of companies that are strongest in corporate governance and responsibility, business aircraft users ranked the highest in terms of who was most admired, most innovative, who had best places of work and best brands. Simply put, the use of a business aircraft is a symbol of a well managed company.

A good number of entrepreneurs and organizations in the United States can best be described as small and medium enterprises whether publicly operated or privately owned (National Business Aviation Association, 2011).  Studies from NEXA Advisors a group that offers consultancy and strategic advisory services for the aviation industry have established that users of business aircraft have consistently outperformed nonusers financially in terms of shareholder measures in a number of ways such as:

1. Superior Financial Performance: Users of business aircraft produced better financial results than companies that did not.
2. Reduced Recession Impact: The recent recession has poised a great challenge to SMEs, in response to financial crisis, SMEs using business aircraft were less impacted than non users. 2008 and 2009 studies by NEXA have shown that 69% of these companies posted greater top line growth

• Better customer access: Aviation may at times be the only means of accessing certain areas, thus SMEs using business aircraft stand a better chance of accessing new an broader markets hence improving customer retention and securing new sources of revenue.

Findings by the advisory committee NEXA have shown that users of business aviation were more successful in returning value to shareholders, with Total Return (stock price appreciation + dividends) that was 245% higher than that of nonusers. Users have an operational advantage in terms of more income earned due to increased productivity based on efficiency. Users are also able to maximize output from their resources hence enabling them to provide superior returns on equity, return on assets and asset turnover (40%, 70% and 21% higher, respectively) (National Business Aviation Association, 2011).

Users are able to take advantage of emerging business opportunities, with a 22% margin compared to nonusers. Further comparisons between users and non users of business aviation show that whereas individual performances vary, group analyses have indicated higher scores for users across the board. Having said that, individual companies and their managers have a task to determine conditions under which the use of business aircraft drive growth in enterprise value as well as provide solution for the various financial crises. Business aviation is a reliable tool for various company missions such as responding to client requests within a strict time schedule.

Works cited

National Business Aviation Association >>www.nbaa.org/business-aviation/Nexa<<  2011