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Business Aviation (BA) is an important segment of nonscheduled air transport, providing personalized solutions for business trips by air. Unlike scheduled air transport or holiday charters, BA has hardly been dealt with in the academic literature. This chapter gives insight into the structure and key economic effects of the European (EU28 + EFTA) BA sector. Hereby, we differentiate between the sector’s macroeconomic footprint, in terms of jobs or gross value added (GVA), and the generation of business efficiencies and connectivity benefits for the users. Based on our own data collection and input-output analyses using data from the World Input-Output Database and Eurostat, we find that the effect of BA over the EU28 GVA is almost 0.2%. Also, some 374,000 European jobs are directly or indirectly dependent on the sector’s activities, which is more than the total number of jobs in, e.g., Cyprus. More than half of these jobs stem from the operation of business aircraft and from closely related operational services like maintenance (“MRO”) and handling (“FBO”), while the remaining employment occurs in the production of business aircraft and parts. Comparing actual European BA flights against their fastest commercial travel alternatives, key efficiencies came to light, such as average travel time savings of 127 minutes per flight, annual savings of about € 15 million in overnight hotel costs and an average 150% increase in productive work time for the travelers. Furthermore, we find that BA can significantly improve connectivity, as it serves about 25,000 city pairs not connected by nonstop scheduled air services.

This study aims to address the need to empirically investigate the luxury customer service experiences of the ultra-high-net-worth individual (UHNWI) segment by conducting and analyzing interviews with 20 clients flying private jets. The results lead to a conceptualization of the UHNW private aviation customer experience.

This study applied a three-step method to explore the meaning and domain of the UHNWI luxury service experience. First, the perception and corresponding attributes of customers’ experiences using private aviation services were examined through 20 in-depth interviews and by using the soft laddering technique. Second, this study coded and, subsequently, purified the data by means of a systematic comparison approach and hierarchical coding. Third, a panel of judges, using the emerging consensus technique, scrutinized and validated the emerging dimensions.

The analysis reveals the customer experience (CX) and motivations differ significantly between business and leisure use, moving from a functional toward an experiential value focus. The findings emphasize the lack of social value for the UHNWI CX and introduce time as a new value dimension.

This study provides multiple contributions to the customer experience, luxury and luxury services literature. This study enhances scholarly understandings of the holistic UHNWI CX in the context of an absolute luxury offering, thus providing a needed conceptualization of an underresearched customer segment, namely, the UHNWI. It delivers insights on the different motivations and experience UHNWI are seeking for according to the context. This study proposes a new luxury value dimension: time.

This study highlights multiple opportunities for UHNWI customer experience improvement. The findings reveal that different clients are looking for different experiences in terms of business versus leisure use. The key drivers and expectations shift from functional (price/availability/flexibility) to experiential factors (comfort/onboard experience/relationship with crew and pilot). Communication, marketing and CX management strategies and tactics need to emphasize this important distinction regarding what drives client behavior in the private aviation setting.

The contribution of this paper is threefold. First, it defines UHNWI characteristics and overall experiences using the unique über-service of private aviation, thus advancing scholarly understanding of both the luxury customer and the luxury customer service experience beyond the proposed traditional drivers of luxury consumption. Second, this study expands the conceptual foundation for the UHNWI “über-luxury” service experience, which, given the importance of the UHNWI segment, is important. Third, this study contributes to theoretical knowledge by extending customer value perception in the luxury context by introducing the luxury value dimension of time. This study concludes with a discussion of its findings’ implications for luxury research and practice, providing a future research agenda with regard to UHNW.

This case followed Todd Duncan, Chairman of Duncan Aviation, as he considered which international locations Europe, Latin America, or Asia were most important in positioning Duncan to benefit from continued internationalization of the maintenance, repair, and overhaul (MRO) industry. The company had the option to hire Regional Managers to actively manage these areas, recruiting new customers and building relationships with existing ones. The case provides students with an opportunity to identify the core competencies of a company, and to recognize ways in which employee engagement contributes to Duncan's core competencies. Optionally, the case may be used to introduce students to Dunning's eclectic paradigm.

The research for this case was obtained from a combination of primary research, secondary research, and personal experiences. One of the research assistants for this case was employed at the company for over two years, and reflections thus obtained, supported with supplementary research, enriched and deepened the paper. Duncan's Debrief magazine and news releases were important secondary sources, in addition to industry web sites, industry journal articles, reference books, and newspaper articles.

This case is intended to be taught in undergraduate international business or marketing courses.

This case is an illustration of the complexity, and strategic importance, of considering whether, and how, to build customer relationships outside the firm's home country. Such decisions confront many companies facing increasingly global industry environments. The eclectic paradigm, developed by John Dunning, explains why companies expand and participate in international markets.

In the past four decades, substantial air traffic growth has triggered enthusiasm in the aviation sector. At the same time, this growth has posed challenges to its financial and environmental sustainability commitments. A buzz has been centered on introducing and supporting aviation sustainability initiatives. These challenges have led to acknowledging the need to reduce aviation fuel consumption, a function of multiple factors. The different stakeholders having a diverse type of interplay govern the effective implementation of the factors at different decision levels (strategic, tactical and operational). Thus, the present study aims to critically examine various decision levels involved to understand opportunities and requirements related to aviation sustainability.

In this study, the best–worst method is used to quantify different decision levels’ role on various factors affecting aviation fuel consumption.

The results of this study signify that tactical-level decisions are most influential in reducing aviation fuel consumption with the highest impact (0.41) followed by operational-level decisions (0.30) and strategic-level decisions (0.29), respectively.

The results point toward the critical role of middle-level hierarchy, i.e. aircraft manufacturers, airlines and others in the aviation industry’s sustainable growth. Thus, middle-level stakeholders must be inspired and empowered to act, being at the center they link the other two levels.

This study has added to the body of knowledge by exploring the decision-making competencies needed by different aviation sector stakeholders. It also presents the possible options available in the sector and the role of stakeholders at different levels in exploiting and implementing the sustainable aviation sector changes.

This case describes the vulnerability of the Indian aviation sector by highlighting the fall of Jet Airways from one of the biggest airlines in India to bankruptcy. The present case discusses the role of Jet Airways' leadership in managing the external threats that affect aviation business in India.

The present case is built on data collected from secondary sources, including publicly available information about the company, journals, websites, newspapers and reports.

The case reports findings of how hubris-driven strategic decisions and insecurity of the leader in losing control of the company, led to the grounding of one of the major airline companies in the Indian aviation industry.

The present case study provides valuable insights into the aviation industry in India, focusing on the threats to the aviation business. The case is useful to other airline companies and the aviation business community in dealing with external threats to business and issues of leadership dysfunction.

Purpose – The purpose of the chapter is to sketch the historical and evolutionary development of the Wichita Aircraft Manufacturing Cluster from inception to present and provide a descriptive narrative of aircraft industry knowledge spillovers currently driving effort to establish a Medical Device Manufacturing Cluster. The chapter illustrates how carbon-fiber composite materials knowledge and technology developed for use in the aviation industry is facilitating the creation and growth of medical device manufacturing.

Methodology/approach – We use an historical case study approach to trace the development of the aircraft cluster in the Wichita, KS metropolitan area. A number of technologies are identified that had initially been adopted by one firm but eventually diffused through other firms in the local cluster and ultimately throughout the industry.

Findings – In addition to providing examples of within industry knowledge spillovers, we provide an example of technology-based knowledge that is diffusing through the aircraft manufacturing industry and is now being used as the basis for establishing an unrelated industry manufacturing cluster. The use of carbon-fiber composites in aircraft manufacturing has diffused from one manufacturer to many in the industry. Subsequently, the knowledge base surrounding carbon-fiber composite materials is being used in a local R&D effort to create a second manufacturing cluster producing medical devices ranging from surgical instruments to joint-replacement implants.

Originality/value of paper – The chapter illustrates a unique example of a manufacturing cluster, intra-industry knowledge spillovers, and inter-industry knowledge spillovers to create a new manufacturing cluster.

The use of corporate aircraft has increased as businesses place more value on ease of mobility. The bonus depreciation incentives of 2002 and 2003 provided growth opportunities for the general aviation market by allowing accelerated depreciation deductions for the purchase of new corporate aircraft. These incentives allowed more than twice the traditional MACRS allowance for depreciation for the first year of operation of an asset, but the present value of the tax savings after the full depreciable life of the corporate aircraft only generated a 3.25 percent reduction in the after-tax-cost. This study documents that the bonus depreciation incentives did not generate significant growth in the general aviation aircraft market via increased production of aircraft. These incentives may have simply slowed the recession that might have taken place in this industry otherwise. However, the incentives in this study did play a significant role in determining which type of aircraft to purchase, piston or turbine.

This study aims to (1) examine the mediating effect of strategic orientation on the effect of environmental uncertainties on business performance, and (2) examine the mediating effect of innovations on the effect of environmental uncertainties on performance of the business in the aviation industry in Indonesia.

The research design was conducted through a survey, and the testing form was carried out using “Relationship Causal Studies” or a study to analyze the causality among environmental uncertainties, strategic orientation, innovations and performance of branches/stations of airlines in the Indonesian aviation industry. The sample was selected by determining the number of branches/stations of the Indonesian airlines to be selected into the sample, then more than one unit managers were selected as respondents representing their respective branches/stations. The number of the target sample in this study was 250 branches. Techniques used to address the hypotheses of the present study were Descriptive Analysis and Structural Model Analysis. The inferential statistical analysis focuses on the subject of the analysis and data interpretation to draw conclusions.

These research findings provide a contextual overview of the aviation industry in Indonesia that activities to make innovations in airline branches play a vital role in encouraging business performance. Moreover, the analysis shows that the more innovative a branch the better its business performance. This corroborates the finding (Spacapan and Bastic, 2007; Talke, 2007) that being highly innovative can ensure sustainable and long-term business performance.

The findings of this research suggest that innovations mediate the effect of environmental uncertainties on business performance. These findings corroborate the results of previous studies that suitability between strategic orientation and innovations of a company in response to environmental uncertainties will affect performance of the company (Li and Gima, 2001; Manu, 1992). These findings also strengthen the view that companies with a higher level of innovations (innovative) have better business performance and competitive advantages (Kessler and Chakrabarty, 1996; Salavou et al., 2004; Spacapan and Bastic, 2007). Furthermore, based on findings, it can be interpreted that management that is able to overcome barriers to innovations, maximize innovation resources and achieve the target of innovations in the form of creation of better products/services will have better performance. The ability of the management to identify and overcome barriers to innovations and maximize the sources of innovation will generate products or services that can be accepted by the customers and eventually these products and services will be able to compete with better business performance (Blumentritt and Danis, 2006).

Findings of this research indicate the positive and significant mediating effect between environmental uncertainties on business performance, through the mediation of innovations, competitive conditions of the industrial environment which can encourage organizations to evolutionarily be more innovative in managing business to compete in the long term (Franke, 2007). This is also consistent with the theory of evolutionary economics (Nelson and Winter, 2000) that the old strategy may not suit the changes in the environment, and therefore companies should continue to seek new breakthroughs with persistent improvement and innovations.

Dynamic and competitive conditions of the industrial environment require organizations to more intensively explore sources (capabilities) of innovations and accelerate generation of the innovations (Franke, 2007; Berry et al., 2006; Dobni, 2006; Davila et al., 2006; Spacapan and Bastic, 2007). Contextually, it appears that the competitive conditions of the aviation industry in either the short term or in the long term require business actors to be more innovative and to survive (Franke, 2007).

Innovations in business models as a new effort in improvisation specific to the business stage of the basic model (not very valuable) become more advanced business processes to produce products that are more valuable for consumers, at a more efficient cost with better profitability (Chesbrough, 2007b). So far, research on the role of innovations in response to environmental uncertainties and implementation of strategies to improve the performance of the environment-strategy-performance (ESP) model is still done partially so that there is no comprehensive model to describe the role of innovations in this ESP model, or let us say that a gap between theories and opportunities to do further research on the role of innovations in the ESP model exists.

The sharing economy (SE) has transformed the tourism industry and continues to disrupt multiple sectors in the global business landscape. This paper aims to investigate the potential of the SE entering the aviation sector and examines travelers’ willingness to pay (WTP) a premium for shared private air travel.

The context for the empirical study was the platform JetSmarter, one of the emerging SE platforms in the private aviation sector. A quantitative survey with a random sampling method was adopted to measure customers’ WTP premium prices.

The results reveal a glaring interest of commercial air travelers in flying on a shared, private aircraft and show significant differences in the WTP for private aviation. The findings highlight a difference of WTP between customer segments, including Northern American and European customers, as well as business and leisure travelers.

The study makes a three-fold contribution to theory and practice. First, it bridges SE literature and the WTP construct, and with that, expands the understanding of pricing behaviors in a SE context. For tourism businesses, the study is valuable in that it offers concrete pricing suggestions for SE services when aimed at a premium rather than a budget customer segment. Third, the study is novel in that it taps into the aviation sector as a subsector of the SE ecosystem and offers critical implications suggesting the potential of the SE disrupting traditional aviation businesses.

共享经济对航空业的影响: 旅客的支付意愿

共享经济不仅影响了旅游业, 更进而改变了许多产业的运作模式。本文旨在研究共享经济在航空业的发展潜力, 以及探讨旅客对于共享私人飞机的溢价的付费意愿。

此实证研究是以一个新兴的共享私人飞机公司JetSmarter作为背景。本研究采用定量调查中的随机抽样方法去衡量客户支付溢价的意愿。

研究结果显示旅客对乘坐共享私人飞机有浓厚的兴趣, 并显示出不同客群在付费意愿度上有显著的差异。调查显示北美和欧洲旅客以及商务和休闲旅客的付费意愿明显不同。

此研究对理论和实践做出了三方面的贡献。首先, 藉由结合共享经济的文献和支付意愿的领域, 它扩展了我们对共享经济的定价行为的理解。对于旅游企业而言, 这项研究的价值是它为共享经济提供了具体的定价建议, 且它针对的是高端客户而非中低端客户群。最后, 这项研究的新颖性在于它将航空业定义为共享经济生态系统的一部分, 并且它提供了批判性的建议, 说明共享经济有可能对传统的航空业务造成负面影响。

Economía colaborativa que perturba la aviación: Disposición de los viajeros a pagar.

la economía compartida ha transformado la industria del turismo y continúa afectando a múltiples sectores en el panorama empresarial global. Este artículo tiene como objetivo investigar el potencial de la economía colaborativa que ingresa al sector de la aviación y examina la disposición de los viajeros a pagar una prima por viajes aéreos privados y compartidos.

el contexto para el estudio empírico fue la plataforma JetSmarter, una de las plataformas emergentes de economía compartida en el sector de la aviación privada. Se adoptó una encuesta cuantitativa con un método de muestreo aleatorio para medir la disposición de los clientes a pagar precios superiores.

los resultados revelan un interés evidente de los viajeros aéreos comerciales en volar en aviones privados compartidos y muestran diferencias significativas en la disposición a pagar por la aviación privada. Las conclusiones resaltan una diferencia de disposición a pagar entre los segmentos de clientes, incluyendo a los clientes norteamericanos y europeos, así como a los viajeros de negocios y de placer.

el estudio hace una triple contribución a la teoría y la práctica. Primero, une la literatura sobre economía compartida y el constructo de la disposición a pagar, y con eso, amplía nuestra comprensión sobre los comportamientos de fijación de precios en un contexto de economía compartida. Para las empresas de turismo, el estudio es valioso porque ofrece sugerencias concretas de precios para servicios de economía compartida, cuando se dirige a un segmento de clientes premium en lugar de un segmento de clientes de presupuesto. En tercer lugar, el estudio es novedoso porque aprovecha el sector de la aviación como subsector del ecosistema de la economía colaborativa y ofrece implicaciones críticas que sugieren el potencial de la economía colaborativa que perturba las empresas de aviación tradicionales.