Business aviation increases enterprise value of Canadian corporations

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A new study examining Canada’s TSX 60 corporations shows that corporate business aviation users on average, outperformed non-users by 43% on top-line revenue growth.

The North American-wide findings were release in a report produced by NEXA Advisors, which tracked enterprise value at both U.S. S&P 500 and Canadian TSX 60 companies, using several standard financial metrics, including EBITDA, Return on Equity (ROE) and Return on Assets (ROA).

CBAA president and CEO, Rudy Toering, commented that “The report proves what we had known all along: Companies that use business aviation have a huge advantage - and better financial results - than those that don’t. Business aviation is embedded in the DNA of success.”

As well as finding that Canadian BA users outperformed non-users by 43% on top-line revenue growth, the NEXA study also found that business aviation users could expect to improve EBITDA at a rate of 50% higher than non-users. As well, business aviation users are almost three times more efficient as non-users at both using equity capital to generate income (ROE) and increasing productivity of assets (ROA).

The study also found that on average, almost 95% of companies which appear in the 'Top Performing' lists - whether it be for innovation, ranking the most admired or trustworthy companies or recognizing outstanding corporate citizens, use business aviation. The findings in the NEXA report complement the CBAA’s recently released 2017 Economic Impact Study that shows business aviation generates a total (direct, indirect and induced) of $12.8bn and 47,000 jobs annually in Canada.

“These two reports allow us to paint a 360-degree picture of the impact of business aviation in Canada. We can show its direct contributions: for example, that jobs in business aviation pay two-thirds more than the average Canadian salary. And we can also show its catalytic impacts: how using business aviation contributes to higher investor returns, including pension plans.” Toering said. “So, Canada’s middle class and current and future pensioners are beneficiaries of business aviation, even if they never fly in a business aircraft. Our job now to make sure that political leaders understand this.”

CBAA is using the reports to connect with leaders and influencers across Canada to increase their awareness of the value of business aviation to Canadians and to ensure regulations and policies do not damage this important aviation sector.

BlueSky Business Aviation News | 2nd November 2017 | Issue #437

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