Corporate Jet Insider

Fly by Private Aircraft and Enjoy Taste of the Future

Stories of air rage continue to pop up in the media, including the recent and well-publicized battle between Alec Baldwin and American Airlines. Managers of commercial airports recognize that air travel is often unpleasant and stressful for consumers. In response, airports are scrambling to find new ways to provide better customer service, reduce frustrations and manage flight schedules at or near maximum capacity levels.

CAP Strategic Research, an aviation market research and consultancy firm, predicts several significant trends headed to airports around the world over the next 10 to 15 years.

Check-in is out

Say goodbye to check-in counters. Travelers in 20 years will check in to their flights exclusively from their homes, offices or mobile devices before arriving at the airport.

Unfortunately, as long check-in lines are eliminated, so is the sometimes necessary option of transporting extra or oversize bags. In the near future, whatever doesn’t fit into a single carry-on ships via special arrangement through a separate cargo carrier.

High-tech becomes a high priority

Advances in biometric technology, using facial, iris or palm scan, provide flyers with the option to fast-track through lines at security. For an extra fee, frequent business travelers apply in advance for “trusted traveler” status, allowing them to circumvent security checks completely.

Immigration and emigration processing is streamlined and automated as traveler data and security information is instantly shared through computerized systems around the world.

Finally, thanks to better airplane design, engines are quieter, allowing flights to depart in the middle of the night without disturbing the homes and neighborhoods situated close to the airport.

Why wait until 2025?

For many business travelers, the future has already arrived. Business travelers using private jets already enjoy perks that allow them to skip past security lines and follow minimal immigration/emigration processing.

Additionally, flying privately today allows for flexible departure schedules, open seating, and the convenience of toting extra luggage. Plus, once in the air, the private jet becomes either a flying boardroom or bedroom, where work or rest occurs without disruption or distraction.

Perhaps Alec Baldwin should consider these benefits before he steps on another commercial flight.

$100-Per-Flight Fee: Where Do You Stand?

Much has been made of the Obama administration’s plan to reorganize funding for air traffic control. General aviation has always paid for air traffic control through a fuel tax. Now, Obama plans to change that to a flat fee — $100 per flight.

This proposed fee, projected to raise $11 billion before 2022, was unveiled Sept.19, 2011. Every flight within controlled air space will be required to pay the fee, with the following exceptions:

  • Public aircraft
  • Military aircraft
  • Recreational piston aircraft
  • Air ambulances
  • Canada-to-Canada flights

Immediately after the proposed fee was announced, general aviation groups cried foul. The backlash comprises a few major arguments:

  • General aviation already pays for air traffic control with fuel tax.
  • Government should encourage general aviation as an economy-builder rather than adding fees.
  • More bureaucracy would be needed to collect the fee.

Some 9,000 individual opponents to the suggested $100-per-flight fee signed a petition demanding the White House  drop the proposal. They received their answer on Friday, Jan. 13, 2011, when the associate director of general governmental programs, Dana Hyde, repeated the White House opinion that the fee is necessary for air traffic control.

What do you think? Does the fee level the playing field or unfairly target business aviation? Does the current fuel-tax system work?

Successful Companies Understand Value of Private Aircraft

The media and general public may not understand the value of private aircraft, but successful businesses do. Private jets are not for show and comfort. Rather, they are an important — often indispensable — tool in the battle for business, especially as many companies are fighting their way out of recession.

Frequent business travelers say private aircraft offer several advantages.

  • Save time and money
  • Increase productivity
  • Provide more time to spend with family
  • Reach numerous destinations quickly
  • Eliminate common safety issues associated with commercial flights

Better efficiency, better business

Even beyond these practical advantages, private aircraft deliver measurable ROI for the businesses that use them. According to the study Business Aviation: An Enterprise Value Perspective — The S&P 500 from 2003-2009, private airplane users outperform non-users in revenue growth, profit growth and asset efficiency.

The study demonstrates that, compared to non-users, private aircraft users

  • see 116 percent higher average annual revenue growth
  • realize 434 percent higher annual earnings growth
  • average 81 percent higher annual earnings before interest and taxes
  • see 496 percent higher market capitalization growth

Whether before, during or after the significant decline in the business aviation market in 2008, business jet users substantially outperform non-users in nearly every analyzed financial category.

Jet market continues to rebound

Business executives who understand these advantages continue to invest in private aircraft. The private jet industry has certainly experienced its share of turbulent weather during the recession and the slow, ongoing recovery. However, many experts believe the worst is behind it, according to a May 2011 New York Times report.

In the report, Richard Aboulafia, an aviation analyst at the Teal Group in Fairfax, Va., says, “The overall market has stopped falling, and 2011 deliveries are likely to be about level with last year. For next year, leading indicators are pointing to renewed growth, with the pool of available aircraft in the used jet market shrinking, although prices for used planes are still soft.”

The New York Times report also notes that typically, as recovery sets in, returning buyers first hunt for bargains on pre-owned planes and then start to look at new models. Experts at L&L suggest that if you will be in the market for a pre-owned jet soon, you might begin looking now.

Cliff’s Notes to 2012 Business Aviation Forecast

Several lengthy reports and laundry lists of expectations for the state of the business aviation market have been released over the past couple of months and weeks. Corporate Jet Insider took some time to compile the data into a quickly accessible, easy-to-digest format. Thanks to the good people at Conklin & deDecker and Aviation International News for doing the heavy lifting.

The forecast for 2012 is mixed: growth in some areas and decline in others. Overall, expect more growth, but slower than was anticipated in 2009.

Contributing Factors

  • Slowing growth in BRIC countries
  • Debt crisis in Europe
  • Sputtering growth of U.S. economy

Sales forecast by aircraft type

  • Large cabin jets — increase in sales (funded by the corporate profits)
  • Small and medium cabin jets — flat
  • Turboprop — flat
  • Piston market — last to recover
  • Helicopters — largely dependent on oil prices (which are expected to be stable)

Honeywell’s predictions

New jets: Expect 11 percent decline in new jet deliveries in 2012

Used jets: Prices still below 2008 levels, but uptick in demand through 2017

You can read the FAA Aerospace Forecasts FY 2011-2031 for more in-depth analysis for the coming decades.

All in all, a mixed bag for business aviation continues. It is still a buyer’s market, but as long as the U.S. economy s l o w l y improves, the aviation market will demonstrate very modest gains. The European debt situation may also significantly affect growth stateside.

iPads Approved for Use in Cockpits

That’s right. As of Dec. 15, 2011, the FAA approved pilots to use iPads to replace the paper-based flight bag on American Airlines. While some joke about the possibility of pilots playing Angry Birds or updating Facebook, nearly three weeks later, we haven’t heard of any dire consequences.

The iPad is replacing paper navigational charts and manuals for the operation of the aircraft. Weighing in at 38 pounds and 12,000 sheets of paper, the flight bag is a hefty item for pilots to tote around. However, the iPad only weighs 1.5 pounds. It seems like it would much easier to find answers in an intuitive iPad app rather than rifling through 12,000 sheets of paper.

American Airlines has additional plans in mind for the tablets. Flight attendants and pilots will also use the iPads in emergency situations to communicate with professionals on the ground through the InFlight911 Services.

Less paper, less weight, quicker access to manuals, better communication with the ground — iPads on planes seem like an obvious innovation. Perhaps the naysayers are just jealous that they still have to use their iPads in airplane mode during a flight?

The ONE Thing You Need to Keep Private Aircraft in the Air

Although some mechanics are qualified to work on only certain aircraft components, airframe and powerplant mechanics (A&Ps) are certified by the FAA to work on every part of a plane, except instrumentation.

An A&P performs regular and routine inspection of the aircraft and keeps accurate records and documentation, ensuring compliance with FAA regulations. A&Ps are trained to diagnose and repair issues efficiently — but always with an emphasis on safety — to ensure the aircraft can be flown when needed.

To become FAA-certified, A&Ps must first receive practical experience or training by one of the following methods:

  • Successful completion of a 12- to 24-month training program through an FAA-certified school
  • Completing at least 30 months of aircraft repair and maintenance under the supervision of an FAA-certified mechanic
  • Military service, usually augmented with additional study and/or work experience in a civilian environment

After satisfactory completion of the classroom or on-the-job training, A&Ps are then eligible to sit for a series of oral, written and practical exams administered by the FAA.

Specialized skills

As aircraft system design becomes increasingly sophisticated, A&Ps must be exceptionally computer-savvy. Mechanics use computerized diagnostic equipment to test and monitor all aircraft components, including the engine, propellers, powerplant and hydraulics. It’s also essential that mechanics keep abreast of the latest technological advances with continuing education and training.

Hiring a dedicated A&P (as opposed to using a repair service center) allows the technician to become familiar with the maintenance and repair history of your aircraft. Also, the A&P who works directly for the aircraft owner is apt to be invested in providing consistent, high-quality service. That knowledge and commitment translates to more accurate assessment of the jet’s overall health, better communication with the pilot and speedier repair times.

Hiring a qualified, professional A&P is critical, so request recommendations from other jet owners, check references and request proof of FAA certification. The extra effort you make to find the right mechanic will result in peace of mind down the road.

Good Things Come From Private Aircraft

In 2011, owners and operators of private aircraft participated in many charitable activities and organizations. Find some inspiration for 2012 from these accounts of philanthropy.

In Chandler, Ariz., John and Diana Walkup of Chandler Air Service hosted their 20th Annual Toys for Tots Hangar Party. At the Dec. 9 party, more than 1,500 toys were collected to distribute among local families in need.

Chris Boes relies on Wings of Mercy for free flights to see his doctor. For the past two years, Boes has traveled by air from his home in Muskegon, Mich., to the Duke University Medical Center in Durham, N.C. Boes and his family are grateful for the volunteer pilots who fly them to the cancer facility every two to four months so that Boes can receive his life-saving treatments as he battles an aggressive brain tumor.

In April 2011, Corporate Jet Insider featured an article about the long-term philanthropic activities of two organizations, Wings of Hope and Aerobridge. Both of these groups provide transportation so that medical and emergency professionals can respond to global emergencies like the devastating hurricane in Haiti in 2010.

The number of Americans with private pilot licenses has been dwindling for the last several years, and in 2010, the number dropped to 1966 levels. In order to inspire interest in flying, volunteer pilots like Butch Bejna fly children aged 8 to 17 for free. Bejna has flown more than 1,700 children over the past 15 years; 10 of them have become pilots.

An Exclusive Jet Broker Speeds Private Aircraft Transactions

When it’s time to sell your aircraft, reaching out to and working with several agents means more promotional opportunities for your jet, which results in more prospects, and a faster sale — right?

Not necessarily. Although it may seem counterintuitive, listing your aircraft with multiple brokers doesn’t speed up the sales cycle, and in fact, there are potential risks involved in doing so.

Why less is more

The best brokers in the industry have the most experience and the most valuable contacts. They also rarely participate in multi-broker listings. It just doesn’t make sense to invest time and energy into a sale without the guarantee of a commission.

When you enter into an exclusive arrangement with a single, well-established broker, the agent then becomes committed to the sales process and will devote the marketing resources needed to ensure the aircraft finds a buyer quickly. A good agent has a reputation to maintain and relies heavily on repeat business and positive word-of-mouth in the close-knit aviation community.

Controlling the flow of information

Working with multiple brokers can also create overexposure for the aircraft, possibly diluting its perceived value in the market. In addition, when multiple brokers become involved in the sale of the aircraft, the information and details about the plane can become distorted or just plain inaccurate, creating uncertainty and confusion in the minds of interested buyers.

An individual broker will provide consistently reliable information to potential buyers, reducing the possibility for unanticipated concerns or objections that may rise late in the sales process.

An experienced broker also has well-grounded knowledge of current selling conditions, including product demand, available inventory and price fluctuations. This expertise translates into a deep understanding of the overall value of your aircraft that can be communicated to the market.

Seller beware

Because there are no industry regulations or licensing requirements for the sellers of aircraft, virtually anyone can establish himself as an agent. Because of this, it’s extremely important to review the broker’s website and ask for specifics about how the sale of your aircraft will be handled. Be sure to also request references and speak directly with the firm’s previous clients.

The right broker will have an established client base, a global marketing reach, and the experience necessary to ensure the sale of your pre-owned aircraft goes as quickly and smoothly as possible.

Ease Business Travel During Holidays With Private Jet

The year-end holidays are often a busy and hectic time. Whereas many people have the luxury of taking vacation or simply cutting back on work hours at the end of the year, most executives must continue to see to the demands of running their businesses while trying to carve out precious hours for family and friends.

Add to this mix the pressures of commuting by air during one of the busiest times of the year, and you’ve got a recipe for a holiday season that feels anything but peaceful or festive.

Security! Bah!

For travelers within easy driving distance of a major airport, private air travel eliminates the most common headaches at large airports during the holidays. They no longer have to suffer through long security lines and cancelled, delayed or overbooked flights.

For those who face a lengthy commute by car or shuttle to or from a major hub, private air travel supplies the alternative option of flying from a nearby regional airport which can recover several hours per trip. And, in most cases, private plane passengers need only be at the terminal 15 minutes before the flight’s scheduled departure.

Lifestyles of the relaxed and productive

Private business aviation is not about lavish private planes that cater to rock stars, professional athletes and other celebrities. Traveling by corporate jet is infinitely more practical, with simple luxuries like working without interruption from a fully equipped, portable office.

Securing a private jet also provides control and flexibility around the flight’s departure times. Do you need to book a last-minute flight during the holidays? Instead of being forced to choose among limited seats on commercial flights (and paying a steep last-minute fare), you can book a private flight that works around your schedule. Did your late-day meeting run longer than expected? No problem — your private aircraft doesn’t leave until you arrive at the terminal.

Best of all, by eliminating the wasted hours and stress that comes with traditional airline travel, private planes can deliver you safely on the ground with more energy to devote to the people you care about most. And isn’t that something we can all put on our wish list this holiday season?

Business Jet Market Expected to Grow in 2012

The slow and bumpy market recovery for business aircraft is expected to continue into the next decade, according to a report from Forecast International, a Connecticut market research firm. Sputtering U.S. and European economies have forced demand for business jets lower than the rising demand for private aircraft in the Middle East, Brazil, Russia, India and China.

Here are some highlights from Forecast International’s study.

  • The most substantial build growth rates won’t be seen until 2013.
  • Long-range, large-cabin jets see the most demand.
  • Between 2011 and 2020, 10,907 jets will be produced, worth an estimated $230.3 billion

Several new designs are in the works, and industry analysts expect them to both enjoy high sales in the improving economy and to stimulate the aircraft industry. Click the links below to see pictures of the exciting new designs.

  • Cessna Citation M2

Speaking of Bombardier and the improving bizjet market, the Canadian aircraft company reported its 2011 third quarter earnings on Dec. 1, 2011. The news is generally good, with Bombardier posting revenues of $2.3 billion in the third quarter, up from $1.8 billion from the same period last year.

While the business jet market certainly isn’t skyrocketing or experiencing the levels of 2008, the increase in orders and demand seen recently demonstrates a sustainable pattern of growth that those in the business jet industry should be excited about. Happy New Year!