The new Florida governor is keeping a promise to residents of Florida and is selling off the private jets owned by the state. The newly elected Rick Scott has directed his staff to liquidate the two business jets owned, a 2000 Beechcraft King Air 350, and a 2003 Cessna Bravo. This is seen as a political move that will obviously be seen as a way for the state to cut back on costs and will add to the difficulties faced by the business aviation industry to not be seen as a perk business for others. Florida’s governor stated:
“The privilege of using a state-owned aircraft is an unnecessary burden to taxpayers, especially when lower-cost travel options exist.”
An interesting understory to the issue is that the governor used his own private aircraft during the campaign trail to be elected to the governor’s spot. According to the Florida Aviation Trade Association executive director, Paula Raeburn, the governor knows about the benefits of using the business aircraft as a business tool as she stated:
“Scott used his own corporate aircraft extensively during his campaign, so he knows what a resource and business tool an aircraft is.”
The business aircraft will be sold at auction on February 9, and experts are believing that the bids on the aircraft will begin at about $2M. The average of the cost of the aircraft is about 2.75M according to reports. It will be interesting to note if the new governor will use his own aircraft and bill the state for its use or asked to be reimbursed for the use of his own aircraft.
Catching up on more of the news that came out of the NBAA show last week we hear news that Embraer has news that the new Legacy 650 has now had its certification and is able to begin handling passengers. The Legacy 650 is a large class jet with a a longer range than the current 600 model which is the previous type jet. The new jet has a capacity to fly up to 3900 nautical miles carrying 4 passengers and can accomplish this feat as a result of improvements to the landing gear fuel tanks and the wing system. The jet was launched last year during the down turn according to their representatives and the Legacy 650 is helping them during this downturn.
The Legacy 650 is helping Embraer as a result of the it being a new jet and not having any on the used market which has increased their sales in this area. We are seeing many companies not launching new jets as it is not the best timing during this economic downturn. Embraer representatives are arguing just the opposite. It will be interesting to see how well the Legacy 650 does on the open market in this down economy.
In Atlanta the news is coming out hot and heavy from the National Business Aviation Association and it is difficult to keep up but I wanted to make sure to report that Embraer inked a deal with NetJets. It was announced yesterday that the fractional provider NetJets has purchased 50 Phenom 300 light jets with an option to buy 75 more of the light jets. They are stating that this is a deal for more than $1 Billion in current economic numbers. The deal involves delivering the jets to NetJets beginning in 2013. The Embraer Phenom 300 is an 11 seat aircraft with a range of nearly 2000 nautical miles. NetJets already has a fleet of 13 business jets which will add the jets from Embraer.
As we begin to see more information come out of Atlanta from the National Business Aviation Association we will be reporting the news as we understand it. Congratulations to the folks at Embraer and at NetJets as they go into the new contract and of course also into the new business of climbing out of the economic slide. We look forward to 2013 and their implementation of the sale.
Bombardier is joining the announcements coming out of the National Business Aviation Association in Atlanta this week. Bombardier is introducing two new jets that are geared for long range. The Global 7000 and the Global 8000. The Global 7000 is the larger of the jets and has a 7300 nautical mile range. The Global 7000 is a four zoned cabin jet. The Global 8000 is the smaller of the two as a three zone cabin jet and has a range of 7900 nautical miles. “By extending this great family, we are once again offering a business jet travel experience that is unmatched and ahead of its time,” said Steve Ridolfi, president, Bombardier Business Aircraft.
The Global 7000 and the Global 8000 jets are not going to be a part of the fleets until 2016 and 2017 respectively. They both are coming with the same price tag at $65 Million as their 2010 price. it might be a different picture in the future however and I have not heard any numbers on current sales. It is nice to see some new lines coming out and as always it is fun to see the announcements each jet company has out there. We will continue to keep track of the announcements and let you know of them.
Don’t get too excited about a quick recovery as the recovery is not set for another year according to Honeywell, the avionics, equipment and engine manufacturer. The report that Honeywell is reporting on indicates that there should be one more year of an economic slide in store for the business aviation industry in 2011, with the rebound recovery and growth occurring in 2012. Rob Wilson the President for Business and General Aviation for Honeywell states:
“I think the downturn in 2009 demonstrated for all of us that nothing is really firm in an economic calamity as we saw, but that said, we are seeing a lot less volatility in that order book, a lot more stability and more of a sense of continuity.”
The report indicates that Honeywell predicts deliveries of between 675 and 700 new business jets for this year in 2010 which happens to the the lowest total since 2004. They predict that in 2011 another year of less than 700 deliveries will be the case.
AIN reported on some of the numbers of the report:
Based on the results of the survey, Honeywell sees a slow but steady change in aircraft category demand over the next five years. Through 2015, medium to large aircraft such as the Bombardier Challenger 605, Dassault Falcon 7X, Cessna’s Citation X and Embraer’s growing Legacy family will account for 32 percent of the projected purchases, while light and medium business jets including new designs like Bombardier’s Learjet 85, the Gulfstream G250, Embraer’s Phenom 300 and Cessna’s CJ4 will make up approximately 22 percent. Long-range and ultra-long range aircraft such as the new Gulfstream G650 and Bombardier’s Global family will garner 21 percent. Those longer-range aircraft will constitute nearly 50 percent of the delivery dollar value over that same period. Very light jets will constitute the remaining 25 percent of demand but equate to only five percent of the retail shipment value. While the personal jet segment is not a part of the survey, the forecast calls for deliveries over the next 10 years of 500 to 1,000 of the aircraft such as the still-developing PiperJet and the slowly developing Cirrus Vision.
The report from Honeywell in the past has not been the most accurate and in fact that have missed the numbers considerably over the last few years, but this is some good news forecast for our industry.
The company over at Bombardier has been working hard to stay competitive and the folks over at AIN have been keeping up with the story since they released the information about Bombardier talking about a competitor to the Gulfstream 650. Bombardier announced at the NBAA show that they are launching a new “Global Aircraft Family”. AIN reported:
…Bombardier this morning announced it will launch a “new Global aircraft family” on the eve of the business aviation show. “It was strategically necessary for Bombardier to announce the program as soon as possible,” business aviation analyst Brian Foley told AIN. “Doing so contains potential customer defections and gives the rest of the market a reason to wait and see before placing an order. Not doing so would have essentially conceded that segment to Gulfstream.” The Canadian aircraft manufacturer today said its board of directors gave an “official go-ahead to launch the expanded Global aircraft family.”
The new aircraft being launched by Bombardier will be announced on October 18 and it will be interesting to see what they have coming. AIN opined that perhaps Bombardier’s announcement:
…suggests that it will be a new clean-sheet design–the rumored M170 program–though a Global XRS derivative is possible, but apparently now remote. Potential powerplants for the so-called “Super Global” are said to include the Rolls-Royce BR725 and a GE Tech X-based engine. George Tsopeis, Zenith Jet’s vice president of aviation services, said an XRS derivative would cost $200 to $300 million to develop and could be in service in 2013, while a clean-sheet Global would cost more than $1 billion and wouldn’t enter service until at least 2016.
More to come on this announcement after it is made in the middle of the month.
The NBAA will be holding its annual convention and meeting in Atlanta, GA on October 19-21, 2010. The Georgia World Congress Center will be host to the vent for exhibitors, speakers and attendees, and there will be a static display of aircraft at the DeKalb Peachtree Airport. This is the 63rd Annual meeting for the conference and they hope to have 25,000 attendees in the business aviation industry attend the event, all looking for the newest and best in the world of business aviation. You can register for the event at the NBAA site. The description is stated:
NBAA2010 is the premier annual meeting place for the business aviation community. This event brings together business leaders, government officials, manufacturers, corporate aviation department personnel and all manner of people involved in nearly all aspects of business aviation.
This event should give us a good look at whether the industry as everyone is stating is making a comeback from an economic downturn. I expect that since we are seeing record numbers at other events for this event to be well attended and many professionals all looking to see the future of the business aviation industry. Let us know if you plan to attend the event and whether you too have the same outlook that 2010 marks the year of the comeback in corporate and business aviation.
I love playing golf and watching golf is almost as fun. This weekend is the U.S. Open at Pebble Beach. The airport that is going to be servicing the U.S. Open for many of the private jets used by companies, sponsors and players is the Monterey Peninsula Airport. The FAA has issued a statement concerning the traffic concerns that will be a result of the event.
James Babcock, the air traffic manager at Monterey Airport states:
“Starting the afternoon of June 13, 2010 and continuing through the morning of June 21, 2010, we anticipate that the amount of traffic arriving and departing Monterey will likely double.”
They are also like to see the airport fill up with a number of aircraft and they are finding ways to park the number of private jets and corporate jets that they will have at Monterey. They are asking that other airports be used during the event. Arrival and departure slots will not be required, but the NBAA recommends that operators contact their FBO’s in advance if operating in or out of MRY during this event.
It would be interesting top see all the different aircraft that is being used by corporations or private individuals that are coming in and out of the airport for the U.S Open. I for one would love to be there to see the event in California.
I was reading recently in NorthJersey.com about the Teterboro Trade Show held by the National Business Aviation Association and the optimism that was garnered from that gathering last week. A good deal of the optimism that was garnered had to do with the fact that the turnout was a record breaking affair. The event had more than 1,600 people which was larger than the previous event held in 2008 in White Plains, New York which had a total of 1300 attendees according to Ed Bolen, President and CEO of the NBAA. Bolen went on to state as provided in the article:
The trade show’s record turnout suggests how eager charter operators, manufacturers and private aviation service providers are for a real recovery, said Ed Bolen, president and chief executive officer of the business aviation trade group. “We have been hit very, very hard, but things are looking better if you squint,” he said.
Apparently not everyone was in the same optimistic mood when it came to the news of the record breaking show. The report goes on to quote vice president of Global Aircraft Interiors, Inc., who stated:
“I haven’t seen a rebound yet,” said Robert Roth, vice president of Global Aircraft Interiors Inc. of Ronkonkoma, N.Y. He said some aircraft owners are renovating rather than buying new but price competition is fierce, with six or seven companies often competing for the same job, he said.
It is all coming together for the rebound both in sales of new aircraft and used aircraft and apparently the strongest of the aircraft renovation companies are getting busy with their own proposals. 2010 is perhaps shaping up to be the year of the comeback in the business aviation industry.
