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Special Advocacy Supplement
Study: Business Aviation Benefits Small, Mid-Size Companies
A recently released study commissioned by NBAA shows that small and midsized companies that utilize business aviation achieved greater success in important measures of financial performance, even during the worst recession in recent memory, than comparable companies that do not use business aircraft.
"The level of productivity, flexibility and efficiency business aviation provides enables companies of all sizes to remain productive, despite the tough economy we've been experiencing, and this latest study confirms it," NBAA President and CEO Ed Bolen said.
The 2010 study, "Business Aviation: An Enterprise Value Perspective," is the second installment of the research by NEXA Advisors, LLC into the measurable factors involved in American enterprises' use of general aviation aircraft for business purposes.
The conclusions in the newest study are consistent with findings from a previous NEXA study, conducted and published in 2009, which shows S&P 500 companies using business aircraft consistently outperformed non-business aviation users, not only in revenues, profitability and shareholder value, but also in qualitative measures like "most admired" and "best brands."
The small and medium enterprises (SMEs) examined in the 2010 study represent a diverse group of U.S. entrepreneurs and organizations, both privately owned and publicly traded. In comparing their financial results from 2005 through 2009, NEXA found that business aircraft users outperformed nonusers across a range of financial measures. The NEXA study had three key findings:
Superior Financial Performance
Companies using business aircraft produced better financial results overall than companies that did not. For example, aircraft users had:
- 245 percent higher total returns (stock price appreciation plus dividends)
- 230 percent better earnings before interest, taxes, depreciation and amortization
- 219 percent higher average annual earnings growth.
Reduced Recession Impact
SMEs that used business aircraft were less affected by the "Great Recession" than nonusers. Sixty-nine percent of these aircraft-operating companies posted greater top-line growth in 2008 and 2009.
Better Customer Access
Business aviation provided SMEs with better access to customers and markets not conveniently accessible by other modes of transportation, enabling these companies to retain customers and secure 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 of NEXA Advisors.
Business Aviation: The Sign of a Well-Managed Company
According to a 2009 NEXA study using nonfinancial measures, the highest performing companies appearing on several "Best of" lists reveal a remarkable correlation with business aircraft use:
- Among Business Week's 2009 "50 Most Innovative Companies," 95 percent of the S&P 500 companies on that list were used business aircraft.
- Among Fortune's 2009 "100 Best Places to Work," 86 percent of the S&P 500 companies on that list used business aircraft.
- Among Business Week's 2009 "25 Best Customer Service Companies," 90 percent of the S&P 500 companies on that list used business aircraft.
- Among Business Week/Interbrand's 2008 "100 Best Brands," 98 percent of the S&P 500 companies on that list used business aircraft.
- Among Fortune's 2009 "50 World's Most Admired Companies," 95 percent of the S&P 500 companies on that list used business aircraft.
- Among The CRO's 2009 "100 Best Corporate Citizens," 90 percent of the S&P 500 companies on that list used business aircraft.
For More Information
To download both Part I and II of the NEXA study, visit www.nbaa.org/news/backgrounders