President Obama is trying to pull out all of the bag of tricks he can for the economic recovery and to that he is now proposing giving small businesses a new boost. He is proposing to make it possible for small businesses to purchase aircraft with the possibility of the tax incentive. Great news for some if the legislature would pass the deal. Business Jet traveler reports more fully:
President Obama has proposed giving small businesses a 100-percent bonus depreciation tax incentive for 2011 that would increase the currently proposed 50-percent bonus depreciation deduction, retroactive to September 8, 2010. This deduction would apply to purchases of business equipment such as vehicles, computers and, of course, business jets. Business aircraft manufacturers are hailing the proposal because it would give businesses added incentive to buy aircraft now. Congress still must pass the measure. Legislation currently pending in the Senate would reinstate the 50-percent depreciation bonus that was in effect in 2008 and 2009 through the end of 2010. Supporters are hopeful that the 100-percent bonus depreciation incentive can be added to this bill.
This is a great deal if it works and we will see if it moves the needle in the current economic crisis we are finding the business aviation industry. It is not yet clear how this might help jet sales.
As a company that buys corporate jets, sells corporate jets or overall is just interested in the business of corporate jets, it is not going to come to anyone’s surprise that we thing people should be taking a private jet on any trip or travel that they can. We wold love to see nothing more than to see a jet in every hangar (I wonder if that will ever be in a political speech?). For us to tell people why they would like to own a private or corporate jet carries with it the stigma that we have an ulterior motive. The way around that is to take a few reasons for traveling via corporate or private jet from the people that actually use that mode of transportation. Business Jet Traveler recently posted an article on why some travelers take private jets on trips. I think these are some great testimonials as to why business travel could be best served on a private or corporate jet.
I was especially warmed to the idea that Arnold Palmer wanted to use a private aircraft for family reasons:
“I couldn’t have done many of the things I did without a business airplane. It afforded me the opportunity to be home with my family and at the same time accomplish the things I had to do to make my business and career successful. Whether you fly your own or hire a crew, a business jet far outperforms any other mode of transportation.” ~ golf legend Arnold Palmer
Obviously, he had the ability to travel quite a bit in his career and being able to make your own schedule that allowed him to spend time with his family was a crucial reason for the investment. Not having to adhere to commercial schedules and their mandated times of departure and arrival was a big component of why it was a good way for Mr. Palmer to travel. Having just spend much of the month of October and last week in an airport, I would love to have made my own hours and made the schedule I needed that worked best for me.
I may have talked about this in a previous post but it bears repeating. Being someone that needs to be somewhere important at a specific date and time is crucial to success. F. Lee Bailey put it in better words when he said:
“The productivity of the people at the top determines how many jobs there are for people not at the top. And when a guy misses an important sales meeting because Delta Air Lines had a mechanical [problem] at Kennedy and it reverberated across the system and he winds up in Chicago in a fleabag hotel while the meeting’s going on in Tucson, the [corporate] airplane pays for itself.” ~ attorney F. Lee Bailey
Having been that guy in the fleabag hotel once while I should have been somewhere else I can assure you that is a helpless feeling and one that I never again want to experience.
Reading through some of the other reasons for travelers to take private aircraft in the article you can get a sense for the reasons why those that are using business aircraft to conduct business, are at the top of the game or well known experts and celebrities in their industries. They know when to cut corners and they know when spending a little extra on something that might seem extravagant makes them ahead of all of the competition.
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.
I was recently reading about the Citation X from Cessna and its future. It will be released at the end of next year and is scheduled to be in service full time in 2013. Cessna is not giving us all of the details as yet but as I understand it the new Citation X will be faster than its current version and will use less fuel on a standard trip. This is good news for the folks at Cessna since announcing that they would not bring to market the larger Citation Columbus. They are putting the Citation X at the top of the heap and are relying on it to carry them as its flagship jet.
The Citation X is looking to turn out to be the new technological wonder of Cessna as well as I have heard tell it is “iPhone like” in the Cabin Management System. It is also going to be enabled with the Aircell phone and Internet services domestically.
Mark Huber explained it best over at AIN:
The interactive touch-screen controller at each seat, about the size of an iPhone, has a built-in Internet browser (Internet service required) and controls digital audio and video (a Blu-ray player sits in the forward closet), lights, window shades, cabin temperature, interactive moving map and cabin diagnostics. Texts can be sent from seat to seat and the VIP controls can be designated to any seat in the cabin.
It appears you can update Twitter and your Facebook status all from the seat in the Cessna. I’m looking forward to seeing this come out next year and I think this will be seen as a must have jet for the future. Great job Cessna and Jack Pelton! You are giving us all something to think about from the Cessna family again.
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.
Companies all over are trying to position themselves to stay competitive in the current economic troubles. They are looking for any competitive advantage they can find including seeking incentives from the federal government or any extra help available. Apparently, Hawker Beechcraft is also looking for these advantages and it is creating a stir in the State of Kansas and with the machinist union workers at their current facility.
It is reported that Hawker Beechcraft has been offered some incentives from the Federal Government to move their operations from their current home in Wichita, Kansas to Baton Rouge, Louisiana. This is being offered to the Hawker Beechcraft company to allow for growth and recovery of the gulf coast following Hurricane Katrina.
The problem is that with the assistance of the gulf coast it hurts those families and others in the State of Kansas. It is reported that the Governor of Kansas is trying to recover and keep those jobs in Kansas. It is also hurting the current negotiations with the current contract at Hawker Beechcraft and the machinist union workers. This is a struggle that many companies face but is hitting home here in the business aviation industry. We will continue to review the situation with some of the business aviation industry leaders like the Hawker Beechcraft company and the events as the unfold with workers and the State of Kansas.
It seems that airport safety is getting better and has been for several years. The FAA reported today that there were fewer incidents on runways this year by 50% year over year. The FAA statement indicates:
U.S. Transportation Secretary Ray LaHood and Federal Aviation Administration (FAA) Administrator Randy Babbitt announced today that the number of serious runway incursions at the nation’s airports dropped 50 percent from 2009, the second consecutive year that the number of serious incursions was cut in half.
“We continue to make terrific progress in the area of runway safety and the credit should go to the entire aviation community,” LaHood said. “I’m thrilled that we’ve further reduced serious incursions, and I look forward to additional improvements in the years ahead.”
“The goal we are working towards is zero runway incursions,” Babbitt said during a press conference at Boston’s Logan Airport where he highlighted runway safety technology. “I’m confident that the right combination of education and technology will help us get there.”
The number of serious runway incursions at the nation’s airports dropped from 12 in fiscal year 2009 to six in fiscal year 2010, which ended on Sept. 30. Today’s announcement reflects a steady, significant improvement in runway safety over the last decade. In fiscal year 2000 there were 67 serious runway incursions. Of the six incursions this fiscal year, three involved commercial aircraft.
Several years ago the FAA launched an intensive effort to improve runway safety. That effort included the expedited installation of new technology at airports, expanded requirements for improved signage and markings at airports, and improved pilot training on runway conflict scenarios. Since then, the FAA and pilot groups also have conducted extensive outreach and training for general aviation pilots.
During the press conference, Babbitt announced that the Runway Status Lights system at Boston’s Logan Airport has completed a successful testing period. The runway safety system gives direct warnings to pilots of potential runway incursions or collisions through a network of red lights that are embedded in the airfield pavement. The lights warn pilots when it is unsafe for a pilot to enter, cross or proceed down a runway. Pilots must stop when the red lights are illuminated and may not continue without clearance from air traffic control.
The new technology, which is also being used at Dallas/Ft. Worth, San Diego and Los Angeles, was successfully tested for 90 days at Boston. The FAA partnered with the Massachusetts Port Authority (Massport) to install the system. The FAA funded the design and development of the system, as well as the equipment. Massport paid for the installation of the airfield lighting equipment.
Runway Status Lights systems are scheduled to be installed at 23 airports across the country beginning next year.
Technology it seems is making our lives easier to handle and it seems it is also making our lives much safer as well.
I am a big advocate of the technology world. I run in circles that believe that technology and specifically applications and software are what will fuel our next economy. When I see things that talk about applications and technology I tend to pay attention. Something that is a hot item in the world of mobile phones is Plane Finder. AIN recently reported that the application that costs the user $2.99 from a UK based company is all the rage. It was reported:
[the application] displays aircraft transmitting ADS-B Out signals–and only ADS-B–in a user’s geo-referenced area, whereas Pinkfroot’s planefinder.net Web site shows ADS-B-equipped aircraft across the world moving atop various map backgrounds, including Google Earth. In the iPhone and Android apps, touching an aircraft brings up its ID, type, operator’s name, altitude, groundspeed, heading, route and its manufacturer serial number, in addition to clickable pages of other information. While this is pretty straightforward database information, the clever twist is augmented reality, where pointing the mobile device’s camera at a visible overflying aircraft integrates the smartphone’s GPS position with the aircraft’s altitude and its ADS-B’s GPS position to display its bearing and distance, as well as the same full data block. Spotters are thrilled; not surprisingly, homeland security officials aren’t.
I would say that homeland security might be very interested in the use for this application to say the least. I would also think that those paparazzi that are tracking celebs might also find a use for the aircraft finder for their own “research”. Finally, I would be interested if this application might also be used by corporate espionage to find out what planes are flying to what places and landing at what times times to determine when meetings are held, where executives are going and when. All information that could be assisted with the pointing of your iPhone at over head aircraft.
