Avinode / BusinessIQ / Press releases
Avinode Managing Director Oliver King talked about industry trends and summed up the first half of 2014 at the EBACE International Aircraft Transactions Seminar. Here are some of the highlights:
Flight activity trends
We’re not seeing any dramatic changes in flight activity. Activity in the US is slightly increasing while European activity is dropping, especially when it comes to Light Jet usage. An aircraft category that is doing extremely well in both Europe and the U.S. is the Ultra-long range, with a year-over-year number of +10% in both regions.
The U.S. has been in slow but constant recovery since 2009 while Europe has been struggling since the financial crisis. Route analysis indicate that business-related traffic is coming back in the states (NE region, for example,) while Europe is still driven by leisure related traffic (UUWW – Nice being a typical example) while London and Germany are all struggling. Although 2014 has started ok we are concerned with the effect the Russia/Ukraine crisis will have on flight activity numbers.
Differences in requested age of aircraft
There are significant differences between requested age of aircraft in U.S. compared to Europe. In Europe, 9% of requests are for aircraft older than 20 years, while that number is 41 % in the U.S. The average age of all requested aircraft is almost twice as high in the U.S. (18.2 years) compared to Europe (9.7 years).
The U.S. fleet is older and buyers are used to flying older aircraft. If interiors are ok, these aircraft do the job and will most likely take you from A to B more cheaply even though you might lose 10 minutes on the trip. European buying patterns are partly affected by the average age of the fleet but also by the demand for specific models, such as Citation Mustang, Citation XLS, Embraer Legacy and Challenger 300s that are extremely popular in the European market but haven’t been around for more than 10 years.
Aircraft mission use
If we look at the number of passengers, we find that the level of occupancy is only between 48% and 55% on average (55% for Heavy Jets and 48% for Light Jets) according to data from 2013. This shows the number of seats is clearly not a deciding factor when chartering an aircraft.
It’s not only in passenger numbers that indicate our planes aren’t being used to their full capacity. We can also see it in the distance the aircraft are flying. Long-range aircraft are recommended for flights with a distance of +5000 nautical miles, but in 2013 the actual average distance was 1270 NM. This means the planes are only using a fifth of their capacity. They’re not being used for the mission they were designed for. Prestige, not practicality, is driving choice.
Avinode, with headquarters in Gothenburg, Sweden and U.S. offices in Miami, FL and Portland, OR, has established itself in the business aviation marketplace as the premiere online tool for buying and selling air charter. With more than 3,000 aircraft accessible through the Avinode Marketplace—an online portal featuring an easy-to-use interface—Avinode helps air charter brokers and other industry customers find the best aircraft matches for any trip, based on pricing and real-time availability information provided by operators.
“Avinode represents a best-in-class offering that brings exciting technological advances to this important sector of our industry. This will be a key strategic addition to our product offering and yet another way to add value for our customers in the general aviation industry,” shared Brandon Spear, COO, Multi Service.
“Multi Service Technology Solutions is the perfect fit for Avinode. The company’s expertise in business-to-business payment and transaction processing and aviation software development will help us further strengthen Avinode’s product offering, maintaining our position as the indispensable technology partner for air charter sales,” said Niklas Berg, Avinode Co-Founder & CEO.
About Multi Service Technology Solutions
Multi Service Technology Solutions, is a global transaction management company specializing in billing and payment systems. Founded in 1978, the company provides specialized payment and software management services to fleet, commercial and government clients. The company has offices in the United States, Mexico, the Netherlands and Australia. For more information, visit www.multiservice.com.
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