Business Aviation Gains At Airlines' Expense

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It's long been touted that business aviation traffic would soar as so-called "premium" passengers, those who insulated themselves from some of the discomfort of airline travel in the more hospitable front part of the plane, fled the shoe searches and surly service at the hubs. Apparently, it's all come true. A study by the Stanford Transportation Group says the number of passenger flights on private jets and turboprops now equals 41 percent of the number of people who fly first class, business class or full-fare economy. While the number of high-priced airline seats sold has stagnated around 41 million for several years, business aviation passenger trips have more than doubled in the last eight years to 16 million.

Stanford says the U.S. Department of Transportation now estimates that less than 10 percent of airline passengers are springing for the high-priced tickets and Stanford's Managing Director Gerald Bernstein says that's bad news for airlines. "It's tough for most of the carriers to make a decent profit with over 90 percent of passengers flying on discount fares," Bernstein said. "This erosion of Premium travel diminishes the one group where the airlines are able to make a profit." Bernstein said increased choice in business aviation travel options and lower prices for some of those products has fueled the trend.