Air Partner’s Bernhard Egger, Manuela Markowitsch and Markus Trully enjoy the benefits of market coordination

Brokers enjoy comforts of a home from home

Good neighbours are great for the mutual growth of business as charter brokers and operators confirm in this focus on the complementary national marketplaces of Austria and Switzerland. The advantages include a better chance of filling empty legs.

Austria and Switzerland are neighbouring national markets with significant differences as well as synergies. Charter brokers and operators in the much smaller Austrian market tend to have to rely on business generated in central and eastern Europe and Russia. Operators in Switzerland, however, can also target such international demand while benefiting from servicing the home market requirements of big corporations, wealthy businessmen and international organisations that are based in major cities such as Geneva and Zurich.

"The potential of the surrounding countries is very many times larger than the Austrian market," Martin Lener, md of Tyrolean Jet Service (TJS), points out. "Brokers and operators in Austria need to service the much bigger catchment area of central Europe and beyond to generate the income they need."

The TJS strategy is to take advantage of being based in the European Union and develop the Austrian market but also strongly focus on servicing the international demand generated by other countries inside and outside the EU.

Air Partner, which is celebrating its 10th year in both countries, has benefited from combining a long-term strategic view with bespoke development in both Austria and Switzerland. It saw the potential in both countries around the same time and the company's activities in each country have similarities. However, senior management such as Birte Pueschel-Kipke, director international offices, have ascertained very different national development priorities.

Austria's potential was identified and developed through Air Partner's operations in Germany. Peter Springinklee, now country manager in Germany, was recruited from the Austrian airline Lauda Air, to provide the local expertise needed to complement input from Air Partner's global network.

Püschel-Kipke says: "The strategic appointment gave us the impetus to bring in new Austrian tour operator business. Arrangements with airlines have proved important in Austria. We have, for instance, developed regular business by specialising in pilgrim flights to Lourdes. Private charter, while a useful contributor to turnover, accounts for perhaps only 10 per cent of bookings. The focus has proved the right one. The office in Vienna now has a staff of four and, although the past 18 months have been difficult because of the global economic downturn, Air Partner will be celebrating its 10th anniversary in Austria with a good client base."

Diary dates

Music and sport are sectors that always provide diary dates and opportunities and Air Partner has made the travel arrangements for orchestras, sports teams and supporters and expects such demand to continue through 2010 and 2011.

Püschel-Kipke says: "Initially we focused on full charters but we developed our approach to take in part charters. It can be very cost-effective for groups to share charters."

In the coming years Air Partner will develop its freight business in Austria. Air Partner, which has promoted freight manager Richard Smith to director of group freight, believes it can emulate in Austria its success in Germany. Pueschel-Kipke, who also has responsibility and oversight for Hungary, Italy, the Netherlands and Poland, points out that Switzerland and Austria use the German language.

"Switzerland was originally developed from the UK office but it increasingly made sense for it to benefit from Air Partner's staff and management in Germany," she says. "Initially the work centered on working with the government and transporting freight. However, the emphasis rapidly changed to include a mix of private jet charter. Bearing in mind the overall downturn in private charter over the past 18 months, the diversity of business in Switzerland has stood us in good stead." One major difference in the market, compared to Austria, is that opportunities in the tour operator sector are less. "There is a smaller selection of airlines operating from Switzerland. However, there are good private jet opportunities and incentives are still providing business despite the fact that the downturn in 2009 meant that many companies reined back their plans for 2010."

But, as with Austria, Air Partner sees opportunities to develop the freight business in Switzerland. And both countries will enjoy low key celebrations for their 10th anniversaries. "We are finalising how we will mark the date but we will obviously be inviting our clients to events," says Pueschel-Kipke.

Unified voice

TJS is well-placed to compete in the private charter and managed aircraft sectors in central Europe but Martin Lener is working hard with others including Casper Einem of JetAlliance to ensure the potential of Austria is developed to the full.

Einem is chairman and Lener is deputy chairman of the recently formed Austrian Business Aviation Association which will seek to give the country's private aviation sector a strong unified voice. "The association will work on aspects that will contribute to building the best possible environment for business aviation," says Lener. "This will include, for instance, making representations to the federal ministry of transport and analysing legislation but it is also important to ensure that private aircraft are understood by everybody to be necessary business tools."

Now that key officials are in place the association is readying industry invitations to the inaugural meeting.

Freight forwarders and logistics firms have used Switzerland's advantages to build business. Gondrand, which specialises in worldwide transport and logistics services, has six offices in Switzerland and is headquartered there. UK manager Nigel Smith points out that customs clearance is required for shipments to destinations outside the EU. "Shipping goods from within the EU to Austria is much less complicated. It is much more exacting to move goods from the EU to Switzerland especially when speed and certainty are required," he adds.

Gondrand, heavily used by freight forwarders, points out the ever increasing complexity of the commercial world - expanding companies, cross-border trade, new markets, exacting investors, new regulations - demands an up-to-date knowledge of commercial operations.

Westward Freight Ltd owner Lee French says the company has been handling diverse shipments between Austria and Switzerland and the UK for years. "The Austrian market is not as strong as the Swiss market but even so it provides regular demand," he says. The company offers 'consolidations', 'back to back' and charter of aircraft if required.

French says: "We operate globally but central Europe is an important sector for us. We offer both door-to-door and the more typical arrival airport-only variations and handle most hazardous commodities to most areas."

He points out: "While air freight is usually considered expensive, it should be noted that on some smaller volumetric consignments it can be more economical than sea and road freight, because of the conversion used by the airlines for charging purposes against those used by the ferry and road operators."

Key markets

French says it pays to check that freight forwarders can also offer early evening pick-ups from airlines, transit to local warehousing, bonded and usual, for larger consignments to avoid high rents chargeable by airlines after 24 hours. "This is particularly advantageous when goods arrive on a Friday and cannot be delivered until Monday or Tuesday for whatever reason."

The Swiss market in general has suffered severely in the post-2008 recession. It has traditionally offered a widespread choice of business jets direct from operators and through a strong broker community. When demand dropped this put pressure on prices which have begun to stabilise but are generally at a low level compared with the summer of 2008.

Switzerland, however, is a key market whose vitality and profitability has an importance beyond its borders. It is not only the European headquarters for many large corporations but its emphasis on business efficiency has meant large numbers of executives utilise private aircraft.

The ExecuJet Aviation Group, for instance, had a hugely successful week supporting business aviation traffic flying in for the recent World Economic Forum in Davos. The company reported that business exceeded expectations. It handled over 300 aircraft movements during the three-day event and sold over 450,000 litres of fuel. ExecuJet's Zurich FBO team's Nicole Gut says the company again secured exclusive parking at Duebendorf airport, the military-owned airport conveniently located just north of Zurich.

Both Switzerland and Austria are very important markets for VistaJet. Eric Weisskopf, evp sales, says: "Zurich and Geneva are both strong departure markets for us and demand is up by around 35 per cent in this year's ski season. In recent years Zurich has attracted the European headquarters of many large multi-nationals such as Google and IBM, generating greater demand for long haul flights to various destinations. Other popular destinations including St Moritz and Altenrhein feature among our top ten destinations."

Seasonal popularity

VistaJet reports that its Swiss-based clients make use of short hops around Europe and longer-haul flights to regions such as Asia. "This creates demand in the full range of our fleet from the Learjet 60 up to the Global Express. These clients also value the guaranteed availability and simple, transparent occupied hourly rates that we offer through our program," says Weisskopf.

Vienna's proximity to eastern Europe makes it the ideal gateway and traffic between Vienna and destinations such as Moscow, Kiev and Almaty has proved to be very popular. "Other destinations such as Salzburg and Innsbruck experience strong seasonal popularity."

VistaJet says its concept of a 'floating fleet' means it is able to quote out of both Switzerland and Austria as a home base, making it attractive to clients who are able to avoid positioning costs.

Weisskopf adds: "We have excellent relations with air charter brokers. Around 70 per cent of our on-demand business can be attributed to brokers. Brokers are attracted to our competitiveness on one-way pricing. While some other operators provide quotes based on both outbound and return journeys we are able to quote on only one-way journeys in line with our business model whereby our jets remain at their final destination."

Russia is among VistaJet's strongest markets and the company reports that demand, particularly in Moscow, has recently started to pick-up again. During peak periods in 2009, VistaJet had on average six flights per day flying into and out of Moscow.

Specialist economic analysts believe that the full recovery to pre-recession levels of air charter business in Switzerland may not take place before 2012 and that this prediction might be true for the European market as a whole.

While events, such as the London Olympics, might only see a surge in demand for charter in the region for just a few weeks, operators servicing central European demand hope a successful event might do a great deal for business confidence.

Despite the difficult global economic situation, last year was a year with good highlights for TJS which received the BACA Global Excellence Award 2009 from the Baltic Air Charter Association. Lener hopes 2010 and 2011 will continue to see an improvement. "Once businessmen and corporations recover full confidence in the future the private charter market in Austria and surrounding countries will benefit considerably." But Lener points out that some executives are currently flying economy on airlines instead of business class and have down-sized from midsize to small and light private jets. The Russian market, important to many charter operators and brokers in central Europe, has undergone a radical change. "Many Russians have moved into ownership rather than charter," Lener reports.

However TJS is managing aircraft for the sole use of some owners and is in talks to add other aircraft under management. TJS is also working to renew aircraft for its clients. "It is a very good time for this as prices are extremely competitive," Lener points out.

Charter operators in the Austrian and Swiss markets have demonstrated that there are potential advantages in operating home bases in more than one country.