In the letter, Patrick Hansen announces that Luxaviation Group will not participate as an exhibitor at EBACE 2019 in Geneva. He furthermore shares the explanations for this conclusion, his concerns and suggestions :

 

Dear Mr. Khan,

I truly appreciate much of the work that EBAA is doing in defending business aviation’s interests with

the European Union and local institutions. This is why the Luxaviation Group is supporting your

association with many of our resources. However, as the CEO of Luxaviation Group, one of the

largest business aviation groups globally and in Europe, I decided to share with you my frank

thoughts on EBACE. As I am convinced that these thoughts are not only mine but are echoed

throughout the European business aviation industry, I decided to make this an open letter and hope

that some of my industry peers see this as an impetus to share the same concerns and conclusions

with you.

Let’s start with the conclusion. This year Luxaviation Group will not participate as an exhibitor at

EBACE in Geneva and we will limit our presence to the organisation of some fringe events.

The explanations for this conclusion are many and I will share these, as well as my concerns and

suggestions, with you in the paragraphs hereunder.

Business aviation’s main concerns should be safety, safety and safety. Accordingly, most money

and attention should be spent on improving the quality and safety of the services that we deliver.

From Luxaviation Group’s presence in many countries and our M&A activity over the past years, I

am very well positioned to know that, on the one hand, the costs of safely operating, handling and

maintaining aircraft have increased significantly. This evolution is mainly driven by regulations and

by a constant and welcomed drive to improve safety. EBAA is also playing its constructive and

supporting role in this.

On the other hand, and particularly in Europe, we notice that the clients are becoming more price

sensitive, mostly driven by tremendous competitive pressures. The numbers on the market

fragmentation which EBAA presents on such competition are self-explanatory. The results of such

heated competition are reduced operating margins at best or a chronically loss-making industry at

worst. Such developments should be worrisome to EBAA and to anybody who cares for safety.

Finally, the continuing uncertainty about Brexit and other geopolitical matters are two additional

concerns with financial impacts facing the business aviation industry at present.

Over the past years EBACE, organised by EBAA, has certainly also improved in quality, but I can

assure you that for operators, handlers and maintenance organisations and I assume even for

OEMs, it has become very expensive to participate in and exhibit at. Not just because of the direct

costs, but because of the indirect costs too.

Geneva is far more expensive than exhibiting at business shows elsewhere in Europe. To take just

one issue – accommodation – research published this year by professional services giant PwC

shows Geneva has the highest average hotel daily rate (€242) of any city in Europe. And believe

me, these average rates are not the ones applied during EBACE, which are much higher.

Attending EBACE can easily cost businesses hundreds of thousands of euros in direct and indirect

costs. We believe that moving EBACE to a less expensive city than Geneva would undoubtedly bring

huge cost savings to exhibitors and attendees.

Also, of note is the fact that the cost of exhibition space charged by EBAA will increase for 2019.

Finally, digitization often has the effect that exhibitions and conferences are ill-suited events to

engage with clients. EBACE is simply not the place where the clients are anymore (especially in our

industry where marketing money is better spent in personalized formats).

We all accept there is rarely a clear-cut return on investment when attending a business show but

the cost of going to EBACE still needs to be justified in annual budgets and justified to our clients

and stakeholders. There is no way an industry that is facing thinning margins should be prompted

by its own industry association to increase its marketing spend on a yearly basis as that money

would be better invested in safety.

We believe that EBAA should use its resources, financial and operational, to support the business

aviation industry in Europe and not organise events that might be financially profitable for the EBAA

but have counterproductive effects on the industry it serves.

The time has come for EBACE to change. The event must respond to economic realities and EBAA

should ask itself if an event in this format is truly representing the many facets of business aviation

as claimed by its Expanding Horizons campaign.

As industry leaders, committed to supporting the development of business aviation globally, we at

the Luxaviation Group appreciate how EBACE has been helping the industry come together for the

last 18 years. Nonetheless, changes are needed now.

Rest assured that as one of the major players in this niche we are aware of our responsibility to

contribute to the industry. We are willing to support new developments, to promote young talents

and initiatives like the recent EBAA One Young World Summit. We are willing to continue investing

in building industry relationships and we value the work which has been done since 2001 by the

European Business Aviation Association (EBAA) and the National Business Aviation Association

(NBAA) in jointly hosting EBACE.

EBACE certainly should continue existing…but you must reinvent it for the event to be having a

positive value to the industry. I certainly hope that more people would share their similar views with

you and that this open letter could thus bring change to a passionate and value-creating niche.

 

Yours sincerely,

 

PATRICK HANSEN

Chief Executive Officer

Luxaviation Group