Study Shows GM's Use of Business Aircraft Could Actually Improve Shareholder Value
January 15, 2013
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  • By: Mark Patiky

    Comment Now Follow Comments Following Comments Unfollow Comments 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.

    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 researcher.

    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 stated.

    “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 substantiated.”

    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, concluded.

    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 non-users.”

    (Source: Study Author’s Findings Counter Forbes Editorial Questioning Business Aviation Use | No Plane No Gain | NBAA – National Business Aviation Association)