Jeffrey K Fox SR Microeconomics Professor Paul Serluco April 21, 2009 Abstract In recent years, policymakers and the general public have expressed alarm over the use of Business Aircraft. While most believe that this is a luxury used only by elitists, it should be recognized as a valuable business tool in a very competitive world that increases productivity, flexibility and dependability; which are attributes of a well-managed firm.

This literature review will examine the economic importance that this industry has on the world’s economy and will show how Business Aviation drives success, contributes billions of dollars to the U. S. Economic output and is a major factor in helping our balance of trade. How is the Business Aviation Industry Critical to the Economic Health of the United States of America? A Review of the Literature While the mainstream media continues to characterize business aviation as an unnecessary excess and cast it in an unflattering light, the facts disagree with these negative generalizations.

According to Jim Hagedorn, Chairman and Chief Executive Officer of the Scotts Miracle-Gro Company “We couldn’t do what we do without an airplane; it’s a tool to get out and do business. That’s all it is, and it would be a major catastrophe for us to give that up. ” His company’s Falcon 900, which flies a whopping 600 hours annually, is a crucial factor in keeping Scott’s business blooming. And, for the twelve thousand companies in the U. S. and thousands more worldwide that use their own business aircraft, gaining significant competitive advantage is the real headline. Patiky, 2009) It’s a story about success, not excess, says Richard Duchossois, founder and Chairman of The Duchossois Group, a family owned company with interests in consumer products, technology, private equity and venture capital. “We look at our company plane as an absolutely essential business tool. We would be lost without it. ” Duchossois further elaborates that: “It probably is as important a business tool as a cell phone. People don’t seem to understand that having your own plane is about communication.

It’s about the ability to transfer people and knowledge in the very shortest amount of time. ” (Patiky, 2009) The company’s aircraft is a prized asset for managing his company’s diverse interests, offices and customers nationwide and abroad. He and his executive team can drive to the airport, takeoff and fly halfway across the country in less time than it would take them to board a commercial flight at a major hub. Business aviation contributes over $150 billion to the U. S. economy every year, and provides over 1. 2 million high-wage, stable jobs.

America dominates business aviation manufacturing. Half the general aviation airplanes manufactured in the United States are exported, helping our balance of trade. The vast majority of general aviation aircraft worldwide are manufactured, operated, serviced and maintained in the United States. Even the handfuls of companies that manufacture planes abroad “complete”[1] their planes in the United States. We install avionics, electronics, automation systems, engines, paint, interiors and other aircraft components manufactured here in the U. S. y American workers. American aircraft are one bright spot in manufacturing and foreign trade that is still available. “With their impressive performance and construction, American built airplanes are prized throughout the world. In 2007, about half the business jets delivered by American manufacturers went to foreign buyers that paid more than $3 billion for them. Manufacturers elsewhere, including in Japan and Germany, once tried to compete, but they were so utterly trounced by American ingenuity and craftsmanship that they simply gave up.  (Garvey, 2009) Business aviation operators encompass a broad cross-section, including businesses, governments, schools and universities, and not-for-profit organizations. Servicing and supporting these organizations are FBO’S, maintenance technicians, suppliers and service providers. President of the National Business Aviation Association (NBAA) Edward Bolen, testified before the subcommittee on aviation operations, security & safety and stated that: “The aircraft involved in business aviation are diverse, like the industry itself.

For instance, according to statistics by the Aircraft Owners and Pilots association, a majority of the hours flown in piston-engine airplanes are for business purposes. Among the turbine powered airplanes used for abusiness purpose the Beech King Air is the most common model. ”[2] [pic] Business aviation reaches over 5,000 public-use airports in the U. S. , providing communities large and small with fast, flexible, safe, secure and cost-effective access to destinations across the country and around the world. Few flights carry executives. 4% are time-critical trips by sales, technical and middle management employees. (Bolen 2007) During these unprecedented economic times, with the need to find meaningful business and employment: What if one industry could generate millions of manufacturing and service jobs right here in America, Offer hope and economic opportunity to small towns that have lost their commercial airline service, strengthen America’s businesses and enhance productivity and communication, and provide emergency relief to neighbors and communities in times of crisis? Business Aviation already does all of these.

References Bolen, E (2007, March 8) Statement of Ed Bolen, President and CEO of National Business Aviation Association. Testimony before the Subcommittee on Aviation Operations, Safety and Security of the U. S. Senate Committee on Commerce, Science and Transportation. Retrieved May 5, 2009, from www. nbaa. org Carey, B (2009, January 1) Business Aviation Confronts Slowdown. Retrieved May 2, 2009, from http://www. aviationtoday. com/av/issue/feature/Business-Aviation- Confronts-Slowdown_28585. tml

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