Oct. 19, 2010, Atlanta, Ga. – A new study recently released shows that
small and mid-sized companies using business aviation achieved greater
success in important measures of performance, even during the worst
financial recession in recent memory, than comparable companies that do
not use business aircraft.
Oct. 19, 2010, Atlanta, Ga. – A new study recently released shows that small and mid-sized companies using business aviation achieved greater success in important measures of performance, even during the worst financial recession in recent memory, than comparable companies that do not use business aircraft.
The study, conducted for the National Business Aviation Association (NBAA), demonstrates that the enterprise value business aviation confers on Standard & Poor’s 500 index companies also applies to S&P 600 small-cap companies.
“This study reveals that use of a business airplane is a sign of a well-managed company, regardless of the size of the enterprise,” said NBAA President and CEO Ed Bolen. “The level of productivity, flexibility and efficiency business aviation provides allows companies of all sizes to remain productive despite the tough economy we’ve been experiencing, and this latest study confirms it,” Bolen added.
The 2010 study, “Business Aviation: An Enterprise Value Perspective,” was released at NBAA’s 63rd Annual Meeting & Convention during the opening-day Media Kickoff Breakfast. It is the second installment of the research by NEXA Advisors, LLC into the measurable factors involved in use of general aviation aircraft for business purposes across the spectrum of American business.
The conclusions in the new study are consistent with findings from the first NEXA study, conducted and published in 2009, which showed S&P 500 companies using business aircraft consistently outperformed non-business aviation users in revenues, profitability and shareholder value, and even in qualitative measures like “most admired” and “best brands.”
The small and medium enterprises (SMEs) represented in the 2010 study represent a diverse group of entrepreneurs and organizations in the United States, both privately owned and publicly traded. In comparing their financial results from 2005 through 2009, NEXA researchers found that users of business aircraft outperformed nonusers across a range of standard shareholder measures. The NEXA study pinpointed three key findings from the analysis and interviews:
Superior Financial Performance: Companies using business aircraft overall produced better financial results than companies that did not, with average annual earnings showing 219-percent higher growth. In addition, market capitalization growth was 11 percent higher, with two of three companies “graduating” from the S&P 600 to the S&P 500 index operating business aircraft.
Reduced Recession Impact: In responding to the worst financial crisis in recent history, termed the “Great Recession” by the U.S. financial press, SMEs using business aircraft were less impacted than nonusers. Indeed, 69 percent of these companies posted greater top-line growth in 2008 and 2009.
Better Customer Access: Business aviation provided SME companies with better access to customers and markets not conveniently accessible by other means of transportation, improving customer retention and securing new sources of revenue.
“The remarkably consistent results across the range of enterprises from large-cap to small-cap suggest that for any size company, business aviation is a clear differentiator of shareholder value creation and business performance,” said the study’s author, Michael Dyment, managing partner with NEXA Advisors.
The study comes as NBAA continues to highlight the value of business aviation to citizens, companies and communities across the U.S., through No Plane No Gain, an advocacy campaign jointly sponsored by NBAA and the General Aviation Manufacturers Association.
Launched in February 2009, the campaign educates policymakers and opinion leaders about the essential contributions of business aviation to the nation’s economy and transportation system, and to the global competitiveness of American business. To learn more, visit www.noplanenogain.org.
To download both Part I and Part II of the NEXA study, visit www.nbaa.org/news/backgrounders.
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