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Where do we go from here… Mckinsey?

This is a column that I regularly write for the business aviation magazine Blue Sky News called “View from the East”

We finally reached the 2013 and after surviving an apocalypse, suffering a bankruptcy in the industry and seeing the first celebrities book their seats for the Virgin Galactic adventure, we have to wonder: Where are we standing? On the fear preceded by a messy past or on the expectation for a brighter future. Well here’s a thought: How about the present?

During the last CEPA Expo one of the most notorious speakers, Magnus Henriksson from Avinode, made a remarkable opinion about the Central and Eastern European Business Aviation region, slightly unoptimistic but fairly remarked: The CEE is a region of untapped growth.

 

The untapped growth in existing markets.

 

The Central European countries represent an opportunity in the present, uncovering hidden opportunities for growth is what CEPA does and is reflected on the constantly growing membership.

 

But focusing on the people that make the numbers happen, Dagmar Grossmann conducted a research targeting the Ultra High Net-Worth Individuals in the Central European region. So we profiled the individuals who fulfilled the next requirements: A) Experienced in global business, B) Interested in travelling and aviation, C) international contacts and D) Backed up by a corporation

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Most of the people had charter experience; some of them even have an aircraft, but they haven’t make a deal on a second aircraft

What we did was to work with “Sinus Environments”, in Business psychology these are known as environments you predefine, create and see if the person fits in.

 

The sampled profiles in this case are:

 

  • Males between 42 and 55 years
  • 52 out of the 75 ultra-highs have the funds to purchase a G550 or Global 600
  • 10 of them don’t use a computer

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A typical CEE corporation has a strong vertical leadership and authority and consisting of Level 1, Level 2 and Level 3 Management. Level 1 is the ultrahigh. This is important for our research results later.

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Who is Level 1? The Ultra-high, the beneficial owner.

It’s wealth is mainly it is new money and 80% of these gentlemen have a middle education, but are trained by international institutions and are backed up by loads of Mckinsey’s-type of  consultants, so within the shortest time possible the knowledge of Level 1 is high, global and according to their culture, not visible at first sight. Level 2 and Level 3 will ask the questions at each and every meeting. Lunch invitations are ignored and the vertical strength will be displayed by extreme loyalty.

 

If ever a finance institution asks for a proper wealth report of Level 1, I assure you that they will not disclose it properly, and if they do, it probably won’t be accurate. The number they will get or the wealth distribution cipher will be far under the real wealth. Level 1 can never show the real number within his corporation, never ever. So add 5% to the number you will get.

I would like to share with you some of the answers that I found interesting:

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Does the East need the help of the west?

Yes and no. Adam Smith the economist who wrote “invisible hand” acknowledges that if corporations and individuals behave according to what is best for them, the market will regulate itself.

By analyzing the market we have to differentiate between the cycle and the individual, as the market is never going down, it is done by the people.

 

Steve Nash, a Nobel prize winner contributes to the theory of Adam Smith: “If every individual behaves in business what is best for him, and  what is good for the market every transaction can result in a net positive-sum outcome”

 

This, in our case means that Western Europe has to cooperate with Central and Eastern Europe as a part of the entire European market with the same conditions and common ground in terms of understanding and usage of the resources we all have at reach, hence reinstating the purpose of CEPA which is to represent a set of values held in common by the member States and act as a hub between east and west in private aviation, a fact  reflected year by year in the successful CEPA Expo, which is taking place by the end of November and this year promises even more by having the participation of the airlines in an added third day.

 

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