Switzerland special: Brand recognition

Switzerland's reputation for quality is reflected by its business aviation service providers and the industry is booming

The global business aircraft services industry is bursting with companies but few countries have managed to build such a concentration of highly respected and well-recognised brands as Switzerland. This small country in the heart of Europe has a growing fleet of 173 registered business aircraft according to the Flight ACAS database - 6% of the continent's business aircraft fleet - and has become a popular base for leading operators and trail blazers such as Comlux, ExecuJet, Jet Aviation, JetFly, PrivatAir and Tag Aviation.

"Switzerland has built a reputation for quality and high service standards and this is how businesses here are perceived," says Peter Edwards, chief executive of Swiss business aviation services provider Jet Aviation.

Heritage

The Zurich-headquartered company is the oldest dedicated business aviation company in Switzerland with a deep-rooted Swiss heritage. Its founder Carl Hirschmann established Jet Aviation in the late 1960s and it has evolved into one of the largest business aviation companies across the globe with bases in Germany, the Middle East, Russia, the UK and the USA. The company operates a growing managed aircraft fleet and owns a superlight Cessna Citation Excel and three Bravo light business jets.

"Switzerland is also renowned for building things that last," Edwards adds and this value has helped Jet Aviation's interior completions and overhaul business - based in the Swiss town of Basel - become an industry leader. "Although we no longer consider ourselves to be a fully Swiss company we are continuing to invest heavily here and we appreciate the benefits that being Swiss brings to our brand. We couldn't imagine moving our base anywhere else," he says.

Business aviation thrives on personal relationships with customers. Switzerland, with its underlying value of discretion has become a natural choice for aircraft owners and users keen to avoid scrutiny. "Discretion is an integral part of the Swiss culture and this has helped business aviation to thrive here," says Edwards. "You won't find spotters hanging around airports in this country," he adds. Greg Thomas, chief executive of VIP charter and management company PrivatAir agrees. "We are the custodian of people's wealth and we have a responsibility to our customers."

PrivatAir was founded in 1977 as the flight department for the Latsis Group of Greece. It launched its commercial operation in Geneva 18 years later and its Switzerland-based leased aircraft fleet includes a Boeing 757, a 767, a Boeing Business Jet and a BBJ2. Two 787s are on order, earmarked for delivery in 2012 and 2016. Thomas says Switzerland's political neutrality has also helped business aviation to thrive. "We provide transportation for several heads of states around the globe and for many of these countries it is important to apply their national flag to the aircraft when they arrive at their destinations. Flying on Swiss-registered aircraft even with a small Swiss flag on the tail is unlikely to offend and in many cases it gives the passengers anonymity," says Thomas.

Switzerland's strength as a business aviation centre is also driven by the quality and quantity of potential customers in the country - home to 40% of PrivatAir's customers and to the European headquarters of over 1,000 multinational companies and corporations including the United Nations and Red Cross.

Niall Olver, chief executive of ExecuJet, says: "There are more than 450 international organisations in Geneva alone and the country is also home to Europe's pre-eminent banking sector," whose customers and banking executives are either owners or frequent users of business aircraft charter. "Switzerland is very international and its location right in the heart of Europe has helped business aviation companies to thrive," says Olver. Johannesburg, South Africa-headquartered ExecuJet set up its first European base in Zurich in 2001 following its acquisition of charter operator Avcon and 40% of its all-managed European fleet is based there.

Switzerland also offers a favourable taxation system for commercial operators and private owners, Olver adds. Aircraft imported for commercial use are exempt from VAT and private owners pay a rate of around 7.5%.

Robert Wells, chief executive of Tag Aviation, says while the tax rate is favourable compared to other European countries, it has become increasingly difficult for private owners, who offset some of costs of ownership by chartering out excess hours, to reclaim the VAT. "The tax system has changed in the last five years," Wells says. "In the past you didn't have to justify how many of your operations were commercial to get the VAT refund, now the burden of proof is on the owner." TAG says 20% of its European customers are Switzerland-based but many of its private management customers register their aircraft outside Switzerland to avoid paying the VAT.

While Tag Aviation's roots are in Switzerland through its Swiss owner the Tag Group, it is a relative newcomer to the business aviation market. The company was formed nine years ago after the acquisition of charter and management company Aero Leasing. Tag has since sold most of Aero Leasing's fleet, keeping only four Dassault Falcon 2000s that it plans to replace in the coming year. The company is also building a 5,575m2 (60,00ft2) maintenance hangar, due for completion in mid-2008.

Sub-charter market

Swiss operators have a healthy respect for each other and the relationship between the companies is competitive, but professional. Consequently the booming demand for business aircraft in Switzerland has spawned a thriving sub-charter market. "Demand for business aircraft here is high and we can't serve every customer," says Wells.

With its high-end product range PrivatAir admits that its focus has always been at the top of the customer pyramid where many of its fellow Swiss operators do not compete. "This has resulted in us turning away business because we don't have a broad enough product range," says Thomas. That is about to change, however, as PrivatAir sets about expanding its management fleet to include light and mid-size jets. "But there will always be an unwritten rule between [the Swiss operators] that we don't try to poach each other's customers."

This competition for business is matched by the desire to attract highly skilled and qualified staff. "People here are well-schooled, confident and have high standards," says Wells. But, he says, the cost of Swiss labour is high and increasing competition in the market is leading to a shortage of good workers, which is a cause for concern. As Jet Aviation's Edwards points out: "You can't survive in Switzerland unless you do a good job."

Source: Flight International