A panel of leading charter operators at the CEPA Expo in Prague recently agreed that the air charter market in the central European region is set to grow in coming years, but pondered whether cooperation between operators would help to increase efficiency.

London Executive Aviation's Patrick Margetson-Rushmore reported having already seen a 70 per cent increase in its business in CEE countries in recent years, and a 25 per cent increase in 2012 alone. LEA operates a Challenger 300 and a Legacy into the region. The most common destinations are Poland, Croatia, Montenegro and the Czech Republic, he says, and the direction of travel is east to west, rather than west to east.

Bernhard Fragner of GlobeAir pointed out that around two thirds of bookings come via brokers, and identified the routes attracting increasing traffic as Bucharest, Budapest and Croatia, rather than the most established destinations.

Indeed Jaroslav Malinsky of VR Jet, which is based in Bratislava, reported that his company is taking business from Vienna due to the lack of restrictions at Bratislava airport. Vienna is a very competitive location and operators not already based there would not attempt to enter the market, he believes.

VR Jet has found that passengers are currently down-grading the size of the aircraft required for aircraft charter, and that price seems to be the driving factor – with operators differentiating by providing good service and a good relationship between the passengers and crew. Seventy per cent of the company's services are corporate flights with the rest short-term bookings and ad-hoc.

The panel looked to the future to see how air charter operators might develop services to increase business. It was suggested that operator alliances could be formed in the region to help reduce costs, and that the standard of onboard catering should be one of the main focuses when considering passengers' quality requirements.

Margetson-Rushmore believes that in the next three years LEA will see further changes in attitude and approach from the CEE region's FBOs and handling businesses, and that the area will be fertile ground for manufacturers looking to sell new aircraft.

The view from all was that the market will increase with both passenger demand and aircraft numbers growing. Communications during the CEPA Expo were aided by 'Cepenger', a real-time messaging facility, and this is said to have been widely used. The technology, which has not been used before in the industry, allowed the delegates to make comments and ask questions without interrupting the speakers, the messages appearing on the screen above the stage. The chair of the panel then used the comments to add to the speeches and panels.

Other presentations during the three-day conference included a charter market forecast for 2013 by Magnus Henrikson of Avinode Business Intelligence. He observed that the CEE market is highly reliant on non-domestic travel; that it is and will continue to be affected by the wider European economy; and that the domestic CEE market is struggling and not contributing to growth.

Avinode has also identified central Europe as a price-sensitive market with a high utilisation of small aircraft, with short trips for more passengers indicating cautious buyers. It is a fragmented market, says Henrikson, and business jet charter in the south east of the CEE region is under-developed. "There is room for growth!" he says.

The future market potential was explored in more detail at a further panel session involving Ross Mitchell, sales director at Bombardier, Ammr Shaladi, md of Vibro-Air Flugservice, Nick Fitzpatrick, ceo of Atron.

It was noted that customers for aircraft in the CEE are coming from the ranks of high net-worth individuals (HNWI) as in the west and, although the numbers are smaller, they are growing year on year. HNWI are a growing class in the CEE with the younger client having the will to buy aircraft while the older are more reluctant and prefer charter and fractional ownership. Large industry is missing in the CEE as a customer base and that which does exist is largely government owned.

The panelists noted that smaller aircraft are more in demand than in the west, with Learjet models and Challenger 300 popular, as most travel takes place to other European countries and Russia. The VLJ market is reducing and customers are travelling commercial instead. The number of aircraft based in the CEE is more than some reports would have it, as some of the many based aircraft are not registered in the region.

All agreed that keeping costs down is key to operators, and that central and eastern European operators should work together to achieve more cost reductions.

Demand for business aviation is growing fast

Research from Hawker Beechcraft Corporation has revealed that demand for business aircraft in central Europe has increased dramatically over the last decade. When compared with the period 2002-2006, deliveries of business aircraft during 2007-2011 increased by 291 per cent across the region, compared to 31 per cent for the global market.

The research, conducted to coincide with the CEPA Expo, also reveals that nearly half of all business aircraft based in central Europe have been delivered in the last five years. Slovenia, the Slovak Republic and Bulgaria have been at the forefront of this surge in demand, with deliveries increasing by 700 per cent, 700 per cent and 350 per cent respectively between the periods.

"The business aviation market here has grown rapidly over the last five years, albeit from a low base, and we maintain our positive outlook on what we view as an important region in Europe, where upcoming economies will continue to present attractive opportunities for business aviation," says Scott Plumb, vp jet sales EMEA.