Study Shows GM's Use Of Business Aircraft Could Actually Improve Shareholder Value
Jan 15, 2013
By: Mark Patiky
For many, associating a business jet with improved
profitability, enhanced shareholder value and heightened productivity seems
counterintuitive. Those that own, operate and use business aircraft will tell
you otherwise. But you don’t have to take their word for it: A recent study by
NEXA Advisors clearly underscores that companies that use business aircraft
outperform those that do not by a wide margin. The National Business Aviation
Association published the results of the NEXA study on
its No Plane, No
Gain web site.
January 14, 2013
Listen to the NBAA Flight
Plan podcast about the study by NEXA Advisors.
Businesses that rely on aviation not only did better during
the Great Recession; they are already doing better in the nascent recovery when
compared to their ground-bound competitors, according to one prominent
NEXA Advisors President Michael Dyment pointed to findings
in his recent study of companies using business aviation to challenge an online
Forbes magazine editorial calling into question GM’s renewed use of business
aviation, now that the company has been released from U.S. Treasury
requirements resulting from the government’s investment in the company.
“If GM goes out tomorrow and buys a jet for its executives,
shareholders might as well dump their stock now…” the Forbes opinion piece
“There are many, many factual examples where business
aviation today is most successfully used to grow shareholder value by the
top-performing companies in the United States and elsewhere,” Dyment
countered.“Any notion that business aircraft are a bad investment cannot be
NBAA President and CEO Ed Bolen was also quick to reply to
the Forbes opinion piece. “Simply put, General Motors, or any company that
wishes to remain agile and competitive in the global marketplace, should
consider use of a business aircraft — one of the most vital efficiency and
productivity tools available — without concern for unwarranted stigmatization,”
Bolen wrote in an opinion piece of his own, which was posted to the
publication’s web site.
Backed By the Numbers
Dyment backed up Bolen’s assertion by pointing to his most
recent study on the effect business aviation had on Standard & Poors
(S&P) 500 companies’ bottom lines as they weathered the Great Recession.
“Our analysis of the key financial metrics found that
business aviation users weathered the Great Recession of 2008 far better than
non-users. Among the S&P 500, business aviation users outperformed
non-users in every performance category we examined,” the study, entitled,
Business Aviation: Maintaining Shareholder Value Through Turbulent Times,
Dyment was critical of reporting that perpetuates
misperceptions about business aviation, rather than realities. “Business
aviation is truly a competitive advantage that has been proven time and time
again,” Dyment said, citing key findings in several additional studies he has
done about companies using business aviation. For example:
- Among the “50 Most Innovative Companies,” a compilation
produced by BusinessWeek, 30 S&P 500 companies made the list. Of these, all
were business aircraft users.
- Among the “100 Best Places to Work,” a compilation produced
by Fortune, 32 S&P 500 companies made the list. Of these, 91 percent were
business aircraft users.
- Among the “25 Best Customer Service Corporations,” a
compilation produced by BusinessWeek, 8 S&P 500 companies made the list.
All of these were business aircraft users.
- Among the “100 Best Brands,” a compilation produced by
BusinessWeek, 48 S&P 500 companies made the list. Of these, 96 percent were
business aircraft users.
- Among the “50 Most-Admired” companies, a compilation
produced by Fortune, 43 S&P 500 companies made the list. Of these, 95
percent were business aircraft users.
- Finally, among the “100 Best Corporate Citizens,” a
compilation produced by The CRO, 98 S&P companies made the list. Of these,
94 percent were business aircraft users.
Critical to the Economic Recovery?
How important is business aviation to the still-fragile
recovery? Dyment again pointed to his firm’s most recent study, which was
conducted late last year, and compares the performance of S&P 500 firms
with and without access to aviation assets in terms of their ability to lift
themselves above the still-challenging economy.
Those companies that utilized business aviation “mitigated
revenue losses and recovered more quickly than non-users,” the study said.
“Further, companies using business aviation were quicker to hire back employees
and have significantly grown their overall workforce since 2007, relative to
Author’s Findings Counter Forbes Editorial Questioning Business Aviation Use |
No Plane No Gain | NBAA – National Business Aviation Association)
No Plane No Gain: Sampling of 2010 Coverage
Since the launch of the No Plane No Gain advocacy campaign, a concerted effort has been made to deliver the message about the importance of business aviation through national and local news outlets. This sampling of national and local television coverage in 2010, highlights the campaign's effectiveness in communicating the industry's importance.
NBAA's Bolen on Fox Business Network
Click here to see Ed Bolen, President and CEO of NBAA, in an interview on Fox Business Network
NBAA's Bolen on DC's Newschannel 8
In an interview with Newschannel 8, Bolen explains that "... business aviation is prudent, cost-effective, and oftentimes, the only way to get where you're going."