Skyfirst CEO slams bureaucracy ‘strangling bizav in Europe’
Skyfirst CEO Olivier Perdriel.
European business aviation is being strangled by a rising tide of unnecessary legislation, which threatens to endanger safety and bankrupt operators. That’s the warning from Olivier Perdriel, CEO and founder of business jet management and charter services company Skyfirst.
“We are staffed to handle these regulatory burdens and financially resilient to handle the economic impact, but that doesn’t mean everyone is,” says Perdriel.
Identifying the most recent threats as being the French solidarity tax and EU anti-tankering legislation, Perdriel is calling for an industry wide campaign to unshackle European business aviation from the increasing red tape.
The French solidarity tax applied to business aviation threatens to cost France more money than it earns through job losses and business failures, he told CJI. Perdriel cites a study from the accounting and consulting firm Deloitte that specifies the impacts. The tax is intended to reimburse French debt.
Jet charters
From March 1st, France intended to apply new duties on all passenger-carrying commercial business aircraft carrying up to 19 people. While the tax will not apply to private flight departures, it will be incurred on both turboprop and jet charters.
The rate of the new tax will vary depending on the distance travelled. Departures from France to domestic and European destinations on flights of up to 3,418 miles (5,500km) will be taxed at the rate of €420 (£350) per passenger on business aircraft powered by jet engines. Turboprop aircraft will incur about half that rate. Flights within France will be subject to an additional 10% Value Added Tax (VAT).
On longer flights of more than 3,418 miles, there will be a charge per passenger of €2,100 (£1,750). Operators will be responsible for collecting the fees, which will be reviewed each year. All flight distances will be measured on the length of journey from Paris Charles De Gaulle Airport irrespective of the actual point of departure.
Speaking In February, Paul Tiba, board member, European Business Aviation Association (EBAA) France described the new legislation as “a disaster tax”.
‘One of the most taxed industries’
Six months later, Perdriel sees no reason to disagree. “It’s going to force French operators out of business and could shut down smaller airports,” he said. “Aviation is probably one of the most taxed industries. We have a noise tax, we have a passenger tax, we have overflying tax, landing tax and so on.”
The Skyfirst CEO suspects a misunderstanding about who is paying the tax. “The objective of the French tax is to tax rich people. But in the end, it’s the operator who’s paying the tax,” he said.
Based on his experience running a charter business, Perdriel says the tax is “very complex to declare and to pay”. Also there has been no assessment of the impact of the new tax on local operators, he added. Some local French airports, which are already under attack from French environmentalists, might find the new tax the final blow that kills their businesses, Perdriel suggested.
It’s not just the viability of aviation businesses which are vulnerable to the new tax. Unnecessary legislation also endangers operational safely, he asserts. “We are already struggling with all the complexity that is going on over the past 15 years. The additional taxes are making our life harder and, at some point, could affect safety. Because if operators have less money in their accounts, they may train less. They’re going to hire fewer people or those with less experience because money is an issue.
“History has shown us that before shutting down, operators tend to do things that are not always in the safest way. And that’s a risk we need to avoid.”
Another example of unnecessary legislation threatening business aviation is the EU tankering legislation, says Perdriel. This is legislation designed to prevent fuel tankering or the process of carrying extra fuel on flights to avoid refuelling at destinations where fuel is more expensive or to take advantage of fuel price differences between airports.
‘We are not tankering because of money’
A key problem with the legislation is that many smaller regional and local airports do not have the fuel storage capabilities to store more fuel. “We’re not tankering because of money or because of CO2, we are tankering because of operational aspects,” said Perdriel. “Some airports are not capable of delivering the quantity of fuel that we are asking of them.”
Designed for airlines, the tankering legislation again showed policy makers’ lack of understanding of business aviation, he added. “Operating an aircraft is a complex job in which time costs money. They haven’t been looking into our needs and the complexity of business aviation.”
The remedy for Perdriel is greater partnership within business aviation to persuade policy makers to rationalise the laws governing the use and taxation of business jets in Europe. “What would be the solution? I think to work on a simplification of regulations, which involves sitting down with people from operators, from the industry, and start looking at the regulations, and maybe start by rewriting some chapters,” he said.
While he acknowledges businesses compete when it comes to charter management, Perdriel argues they should work together to improve the regulatory environment affecting business aviation – particularly safety and training matters. Business aviation should support organisations such as the European Business Aviation Association (EBAA) and other groups to better explain the complexities which affect safety and business viability.
‘Defending ourselves’
“We operators need to sit down together and as a group start defending ourselves,” he said. “If it were easier for people to follow the regulations, they would be able to focus more on the safety of their organisations,” said Perdriel. “Safety is not a paper you sign; it is a mentality.”
Do you think Perdriel is right to warn against the dangers of rising bureaucracy in Europe? Does more regulation really endanger safety and inevitably threaten business aviation on the continent? Please share your views here.
Meanwhile, read the EC’s response below.
The European Commission replies:
Responding to our request for information, Eva Hrncirova, spokesperson for the European Commission told CJI: “Safety remains the top priority in all aircraft fuelling operations. Within the EU, aircraft operators are required to comply with the Air Operations Regulation, ensuring they carry adequate fuel reserves based on specific flight and performance conditions, as outlined in Commission Regulation (EU) No 965/201.
“To align with these standards, ReFuelEU Aviation adheres strictly to these established guidelines. The Commission has invited business aviation operators to engage with them and the European Union Aviation Safety Agency (EASA), to assess whether and how the annual reporting obligations for aircraft operators may be streamlined, while ensuring that the sustainability objective of ReFuelEU Aviation is not compromised.”
Skyfirst – at glance
Based in Malta, Skyfirst offers charter and aircraft management services. Operating five long-range and ultra-long-range business jets, it was one of the first charter companies to obtain an aircraft operating certification (AOC) with Transport Malta. The company also provides aircraft management services, aircraft maintenance oversight, flight operations, flight planning, and charter services.
