Business Aviation calls for the easing of access to EU funding for SMEs
The European Business Aviation Association (EBAA) enables responsible, sustainable growth for the business aviation sector across Europe. The sector connects distant and remote regions, spurs investment and business, and acts as an enabler for regional and national economic development. The numbers speak for themselves: Business Aviation accounts for almost 380,000 jobs (direct/indirect), EUR87 billion in output, significant time savings when compared to commercial aviation and provides critical connectivity across Europe’s cities and regions.
Given the European Union is in the midst of preparing the next Multiannual Financial Framework – an opportunity to ease access to EU funding for Small and Medium-sized Enterprises (SMEs) which represent over 99% of businesses in the EU – EBAA is calling for improved access by SMEs to future calls for proposals and EU funding grants in the area of investment and research & innovation.
Business Aviation operators are primarily SMEs, and as with SMEs in any other sector face significant difficulty in accessing the necessary finance to ensure continued growth.
Business Aviation is a vital part of the European aviation infrastructure, providing links between often remote communities not served by airlines, or any other direct means. With a fleet of 3,500 jets and turboprop aircraft – roughly equivalent in number to the European airline fleet – it allows the connection of around 100,000 airport-pairs, or three times more than low-cost and legacy carriers together.
EBAA would like to outline current challenges facing SMEs that wish to access EU funding and proposals for the dismantling of said obstacles. At present, obstacles within EU call processes and procedures include:
? Lack of accessibility: Given business aviation operators habitually employ 3-4 people who often handle multiple job responsibilities, overly complex and burdensome processes and procedures render it virtually impossible for staff to apply for EU funding/grants, as does the regular need for external experts. The current framework leads to an administrative burden which is disproportionate to the potential funding on offer. For example, all airline bids to the 2016/2017 CEF Transport SESAR were rejected.
? Restricted funding coverage: The current funding offers and mechanisms favour large commercial airlines operating a large fleet, while discouraging small operators from applying to EU funding mechanisms for the retrofit of 1-2 aircraft. Again, this disproportionately penalises SMEs with smaller fleets.
? Protracted process: It can take almost 12 months - from the launch of the call for proposals/tenders to the signature of the Grant Agreement and bid evaluation – for the entire
EU funding process to be concluded. The nimble and ‘small’ nature of business aviation means this is yet another obstacle for SME participation, due to the wide variety of aircraft types operated and the specialised preparation and certification required for aircraft conversion.
One size does not fit all, particularly when it comes to business aviation; SME access to EU funding mechanisms can be greatly facilitated through:
? Rebates: Offering SMEs a rebate to help offset cost to install new equipment on-board would provide clear and immediate benefits. The US Federal Aviation Authority (FAA) has put exactly this in place to incentivise operators of certain aircraft to upgrade equipment. The FAA distributes 20,000 rebates – one per aircraft owner – which are available on a first-come, first-served basis to ensure budget clarity for the rebate supplier.
? Differentiated charging scheme: The so-called Best Equipped, Best Served concept is a differentiated charging scheme based on a Cost Benefit Analysis (CBA) made for each type of airspace user. Airspace users with a negative CBA should be the primary target for any EU incentive process. Unfortunately, a number of companies with a positive CBA took precedence over the remainder. Moving forward, EBAA would stress the importance for the EU to ensure equitable EC funding processes (incentives or compensation), taking into account the real CBA of each user.
? Easing EU funding allocation: A specific entity could gather several tender proposals from SMEs to help attain critical mass and ease the administrative burden.
Simplifying EU funding mechanisms represents a significant opportunity to attract and include the business aviation sector, and its SMEs, to ensure the implementation of innovation projects.
EBAA looks forward to engaging in an open dialogue to improve the access of SMEs to EU funding mechanisms within the next Multiannual Financial Framework.