Gama Aviation will explore the subject of consolidation at EBACE with a seminar in association with business aviation intelligence agency WingX Advance.

The presentation, called “Insights into a consolidating European aviation market,” will be presented by Managing Director Richard Koe at Gama’s BoothV045 at 3 p.m. Wednesday.

Koe will focus on why consolidation is a major topic in the current climate and present underlying data behind market changes.

“The global business aviation services market is undergoing a fundamental shift from the situation a decade ago when new entrants were able to carry out niche operations,” says Gama CEO Marwan Khalek. “Fleet and private owners now want their aircraft to be managed by a well-run, efficient and successful company [which], through economies of scale, can pass on huge cost savings.”

Khalek said he believes scale is becoming increasingly important in the global business aviation services market. Increasing costs as a result of additional regulation, training and maintenance requirements and the inability to negotiate large-scale fuel agreements are placing additional strain on smaller operators, he said.

Gama Aviation analysis reveals that there was a 9% decrease in business aircraft operators in the European Union between 2012-2013, with the largest drop in numbers occurring among companies operating fewer than 10 aircraft. The increasing cost burden on small operators played a major role in this decline, Gama believes. The number of operators with fleets of two to five aircraft fell from 347 to 343 in that period, while those with six to 10 aircraft fell from 90 to 58, and those with 11-15 aircraft from 22 to 17.

“Much of the European business aviation services market’s inadequacies stem from a highly fragmented supply side with no dominant providers, which leads to inefficiencies in operational logistics and service delivery,” Koe says. “In such a competitive and highly regulated marketplace, it is simply too inefficient for many smaller businesses to compete, so we expect to see a growing number of companies either merging or collaborating in an effort to reduce underlying costs to increase potential profit margins.”