We’ve touched upon these subjects before, and they’re closely related to why GA is in decline in general. But, in the US, the one side of GA that’s actually booming, is the higher end owner-flown, entrepreneur with his own ride. And the business and recreational use they find for them. I get very little sense of that happening in Europe. It’s the old club/renting/microlight mentality everywhere. Old guys in damp tweed with a kettle of tea on talking about Sopwith Camels at Headcorn. If you bring up plane ownership on Euro forums, eyes just glaze over: “But what do you use it for – charter or training?”. They’re just incredulous that someone would own a more costly plane and have it as a business tool with an indirect income stream from it.
Now, there are just as many successful entrepreneurs in Europe as there are int he US, so money is not the object. It’s a mentality. Surely, european business owners could benefit from meeting their clients just as much as the business owner in the US who goes to the next state? Or need to go to conventions and exhibitions, or visit a supplier or factory etc. But why isn’t anyone doing this? The board has a few users like that, but they’re far and few between.
Is it because european business don’t see the same need for in-person meetings? Are they more tight-fisted with their money? Lack of vision? What is it?
Vastly different GA infrastructures, different Euro languages, ease and relative in-expense of train travel in mainland Europe (and often scheduled flights), differences between US IR and Euro IR, maintenance schedule costs and requirements, the list goes on…
As crazy as it seems, but at least in Switzerland and Germany, the tax man has taken a death grip on the deduction of everything that may be seen as remotely pleasant or convenient, or “luxury”. Flying yourself somewhere for business purposes is one of those things which seems to have moved to the top of that list. You would need to employ very costly tax consultants and lawyers to set up the right structures, then document everything very well, and then you would still need to pay a share of “private use” out of all the fixed costs that you incur when owning a plane for business purposes. You would need to prove for each flight that you could not have gone cheaper commercially or by car, or else risk having your flight classified as “unnecessary” and thus non deductible. All the training that you take in order to be able to fly yourself safely? Pleasure, of course.
In the end, most of the time, it’s just not worth the hassle, and it depends very much on the whim of your local tax inspector what is acceptable and what not.
I have no idea about Switzerland, but for Germany the above is simply not correct. Many private aircraft are used for business and it is mostly accepted by the tax office. You do not have to prove anything for “each flight” and you can write off the part you use for your business.
I am doing this for 25 years now. My tax consultant costs € 1800-€ 2000, plus some other smaller fees, and that’s for doing my complete income tax. It is more or less uncomplicated.
But even if it’s not tax deductible, and ends up costing you a bit more, every business owner here I’ve spoken to have said: the airplane pays for itself many times over. Face to face meetings with our clients, suppliers etc have resulted in gains and sales that could not be achieved any other way.
As I wrote, it seems to depend very much locally which tax authority you’re dealing with.
DavidJ and Rwy20 both have good points. I’d mainly say there is little point in such a business operation Adam, as Europe has vastly superior public transport compared to the US and most business takes places within the national borders still. Add to that that modern communications technology such as the internet we’re using right now makes personal travel to a customer unnecessary in many businesses today.
From a German perspective at least, most of central and western Europe is reachable within a few hours by train,. Our high-speed connections are often faster than or nearly as fast as piston GA (ICE, TGV) and, more importantly, connect directly to the city center. Air travel by GA is almost always more expensive and less convenient in Europe than train, car or commercial air travel, and often actually slower door-to-door (because the distances are shorter). The longer the distances, the more advantageous GA obviously becomes, but with most economic activity taking place in a small area (the so-called blue banana) these distances seldom need to be overcome.
I am no entrepreneur but I think for most businesses GA is economically not viable as a mode of transport.
AdamFrisch wrote:
Is it because european business don’t see the same need for in-person meetings? Are they more tight-fisted with their money? Lack of vision? What is it?
Tall poppy syndrome. Don’t get above your station. Wonder what he makes? Obviously a drug dealer, has a boat, a plane, and two flash cars. Lets go and do a whistleblower on him to HMRC.
I could go on, but hopefully the message is clear. In Scotland, I call it the ‘wee fried people’ syndrome. Envious, malicious, and good God, don’t be successful. Knew a guy, a scrap metal dealer actually, had a beautiful red Rolls Corniche. Got fed up with people stamping cigarette ends on it, throwing Irn Bru at him as he drove about with the hood down. Marked the cream leather, I understand.
There was an unwritten rule in UK business. If going to meet with a potential customer/business opportunity, take the old car. Do not turn up in a flash one. You have a what for business – A Plane………..
I will add that it is changing, but very slowly…..
@AdamFrisch, you answered your own question in the second paragraph. In addition to the practical issues already raised there is obviously still a feudal mentality in many quarters that equates injustice with holding visible, personal symbols of entrepreneurial or market/business success. That is a strong disincentive for business aircraft ownership, even for those who have proved themselves upwardly mobile.
Edit… I overlapped with BeechBaby’s post saying much the same thing. I don’t how true this may be in your homeland, but in many other European countries (not just the UK) it remains a primary social issue. I know two people who created German food and/or hospitality businesses from nothing, with essentially no education or former status, who now hide their weekend cars from their neighbors and use them mainly for special events.
Also the weather is much less stable than in many parts of the US, especially the west. To use a GA airplane reliably for business in Europe – all year! – you need good equipment and a lot of experience. I know how many times I drive when i wanted to fly initially … I for one don’t fly IFR if the freezing level is below the MSA or lowest enroute IFR altitude and if there’s solid and high reaching clouds … and that really cancels many flight plans.
