Rwy20 wrote:
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.
That’s certainly not true in Ireland either. “Necessary” is not a requirement for deduction, nor is “cheapest”.
Of course many people will try to claim personal expenditure as business, so the tax authorities might be suspicious and look closely at the transaction.
As for why it’s different in Europe, I think it’s largely down to two factors.
The first is to do with different cultures. In Ireland very few of my clients deal directly with suppliers or customers outside the island of Ireland. Those who do, mainly do so with the UK. Once they go further afield, they tend to get concerned about different language and different laws. They no longer feel comfortable trying to understand local laws and regulations and the effort it can be applied more profitably at home. So as a result their customers and supplier aren’t all that far away, so it’s usually faster to go by car or train.
The second is to do with infrastructure. Because airports don’t get anything like FAA funding, there are much fewer of them. In the US, it seems like every little village has its own airfield, so getting to your client by aircraft is easy. But in Europe, that isn’t the case, and often getting to the nearest airport just leaves you in the middle of nowhere, trying to figure out how to get to your client from an area without public transport, without car hire facilities, and maybe 30-50km away. It becomes easier to get there by car.
Certainly the low amount of IR rated pilot population doesn’t help, but I think that’s a direct effect of the low business use, not the other way around. It’s a chicken and egg thing. If there were more business users of aviation, there would be much more IR flying.
I’m afraid that @Silvaire might be right. So, are attitudes changing? Would it be desirable if they changed? Or will aviation ownership and travel never be accepted? You see, I sometimes think it has to do with one’s own attitude to it. If we all owned it, were unapologetic about it, the I think acceptance would increase. I very much doubt a client would actively avoid doing business with a supplier that arrived in their own plane. I’d think they’d say, “that’s cool, must be useful” and perhaps even be inspired to something similar. But I could be wrong. I’m from Sweden and certainly am very familiar with the tall poppy syndrome (Sweden is the king of that, we call it Jante law), but at the same time, I’ve also seen attitudes change at home. It’s not like it was in the 70’s anymore where an entrepreneur or business owner was the scourge of society (and the abuser of the working class) – today they’re accepted.
AdamFrisch wrote:
I’m afraid that @Silvaire might be right. So, are attitudes changing? Would it be desirable if they changed? Or will aviation ownership and travel never be accepted?
I am afraid we will move on to some other form of transport before societal attitudes change. In Germany already anything driven by a combustion engine is viewed with suspicion by many (and yes, despite our economy benefitting massively from selling high-end high consumption cars all over the world, I’m not saying Germans can’t be hypocritical) and noise pollution is a major topic in any city with even the smallest airfield. GA would have to be CO2 free and practically silent for widespread acceptance in Germany.
@Silvaire
Is all that your personal experience? As a German I, of course, know all these clichés, but I can also say that I have never experienced it. The friends I have who do have personal aircraft suitable for IFR and business flying do use them, and I cannot recall that I ever heard of anybody having that problem. There might be some truth to that, but I am sure it’s not a main reason.
But then: How high is the percentage of businessmen flying from Boston to NYC or D.C. in their own planes. I don’t think that’s an impressive number either … (especially in the winter).
I have considered countless times to purchase an aircraft that I could do virtually all business and personal travel with. There is no problem finding such an aircraft, it is very much affordable to me, I have H24 CAT III ILS with customs very close to my house.
Still I haven’t done it so far. Main reason: it’s not practical, it doesn’t add much value while it means a lot of extra hassle. Public transport in Europe is vastly superior to the situation in the US and I happen to live in an extremely well connected place, both by high speed train and airlines. A very large portion of the European population lives in such areas.
Today I was an airfield 50NM south. While I had lunch, a local entrepreneur took off in his Phenom 300. I would be doing the very same if I happened to live in a rural area and operate my business from there. However, living away from from a large city is very unattractive to me.
And yes, business travel has greatly reduced in my industry (IT). I used to travel all the time to see customers. Today one can do transactions of millions of Euros without ever meeting the client in person. I believe this is a great thing because business travel is the mother of all useless overheads.
PS: my only car in Germany is an electric one and in 4 years of ownership of electric cars, I have never felt the need for something capable of longer distances because driving for hours is about the least interesting thing I can imagine doing — wether for business or personal travel.
I flew a fair bit on business, but this was a time where landing and parking fees at European city airports were very reasonable. Today handling charges are the norm. In some cases you are not going to get much change from Eur 1,000. There was a time piston aircraft, owner flown, might be found at airports with an IFR approach – today the ramp is virtually all jets, with the odd PC12 thrown in – probably delivering an owner to their jet.
Lo cost has also had an effect on all airline prices. Twenty years ago airline schedules, especially to central and eastern Europe were not that good, today if you are a businessman, and therefore bottom line oriented, it is difficult to justify an owner flown aircraft as a business asset.
My experience flying for owners was that very few of the trips were business oriented, the vast majority were personal/leisure.
AdamFrisch wrote:
Now, there are just as many successful entrepreneurs in Europe as there are int he US, so money is not the object.
I have no idea who you classify under “entrepreneur”. Is that the hairdresser who runs his own beauty studio (can’t afford his/her own plane), the IT professional who sets up accounting systems for dentists and pharmacies (could maybe afford his own plane but the business is mostly local so there is no need) or the architect/civil engineer who builds prestige objects worldwide (could maybe pay for his own plane but needs every waking hour of his life on the job). Or the family run factory with 500 to 5000 employees with various production sites around Europe? Many of these have a plane but either employ professional crews to operate it or have it operated under an AOC. Actually at least 80 percent (my estimate) of business airplanes operated commercially in Europe fall in this category. But almost no owner flies himself. Being able to afford an aeroplane and the wish to fly one obvoiusly do not always come together. (In my case for example the company is presently running their 4th aeroplane. But neither the company founder nor his son (who runs the business now) nor his 18 year old grandson have ever expressed the wish to have a go at the controls. As long as I don’t fly them through a CB they don’t care the least what’s going on in the cockpit).
Europe is simply too small and too densely populated and to well served with public transport of all kind that owning and operating a corporate aircraft makes much sense, apart from very few niches. I earn my living in this sector since many years and the vast majority of flights we perform are plain stupid, especially when we fly between large airports – which is what we do most of the time… There are plenty of connections and the most expensive airline ticket costs only a fraction of the cheapest private flight.
My late father had a decent sized business, and was all over Europe on commercial flights every week. I used to ask the same question as to why he never would buy a plane, especially since we had two young CPL/IR neighbours at the time with a small air taxi business. He thought the real cost was in the negotiation disadvantage if your counterpart at the meeting thought you could afford to fly there on a private flight, was that buyer in Nissan/Honda/Xerox really going to accede to your price increase on your product due to rising costs? In certain types of business yes, you could name your own terms but if your competing on price in a low margin high volume business you’d need to play smarter.
Another consideration is a new Ryanair 737 airplane is around 100 million euros worth of kit. If you can fly on that for 50 euro a seat you get the use of a very expensive airplane for very little money.
I think the “if you can afford flying in your private jet, you’re overcharging” argument is valid. In Europe, companies often operate at much lower margins than in the US which can be seen as a sign of higher efficiency and stronger competition.
Look at grocery stores, the margins in the US are about double compared to what we find in most European countries. Walmart operate a fleet of 17 aircraft I was told. Compare that to Aldi or Lidl, they probably operate 17 Opel Astra from 1995 and require all seats to be filled… In a market economy, efficiency wins in the long run and margins tend to go down to the lowest possible for investors to stay in the business. This is called the tendency of the rate of profit to fall (TRPF) and was discovered by Karl Marx but was known as early as Adam Smith.
So yes, a supplier of a well established product coming in a private jet is probably enjoying a margin that I as the customer have an interest in cutting. My first car as business owner (Merc 190D with 72hp) I had to park 2 streets away because it showed economic weakness. My second car (Audi A8 4.2 quattro) I had to park 2 streets away because it could be seen as a sign that I charge too much 
From personal experience I can say that private flying for business can be affordable, cost-competitive and fun. I am the principal consultant in our IT infrastructure consultancy. I currently have two major clients in Teltow (on the outskirts of Berlin) and In Offenburg (Strassbourg area). Just recently I was able to fly Moenchengladbach to Schoenhagen connecting at the airport to exciting new drive sharing company app2drive. I took one of our developers with me thus direct expenses were below scheduled refundable tickets. Having a rental car even at second tier airfields like Bonn or Schoenhagen almost makes my humble Cessna a flying car.
A few days before I was able to use the excellent Lahr airfield. Flying under four hours total saved me from driving close to ten hours that day which would have required an overnight stay. Using our 182 I was able to be back with the family before 8PM and my wife noted how well rested I was, something I can’t claim when I have to deal with extended road traffic. I later learned that my Autobahn was closed for hours due to a burning bus..
Ok, I admit that I was lucky with the weather.. In case of inclement weather I would have had to resort to alternatives. Since weather forecasts are now almost fully reliable 48h in advance I don’t mind sorting out a “plan b”
