Scan the latest business aviation headlines and you’ll see why the industry is starting to feel positive. All indications are that bizav is growing around the world, which is exciting news for an industry that was hit hard by the recession. Let’s look at some of the headlines and articles that have industry insiders excited:
Business Aircraft Flying Back in the Black
AINOnline is reporting that business jet flying increased 1.8% last month over a year ago. That’s the third year-over-year increase in 2013. While turbo-prop numbers continue to decline, large-cabin jets led the industry with an 8.5% increase in activity over last year.
Huge Turnaround Brewing in Pre-Owned Business Jet Market
The values of pre-owned jets have been declining since 2008, but prior to the financial crisis, prices had been increasing at an unsustainable rate. This piece points out that airplanes don’t wear out like a car does, and they are portable assets that can be sold on a global market. Currently pre-owned jets are being “grossly undervalued,” making it the perfect time to buy if you’ve been considering the investment.
Giant Order for Bombardier Business Jets
Flexjet, a fractional ownership service provider, just placed a $5.2 billion order with the Canadian Bombardier. Not only does this indicate huge growth for Flexjet, it’s also exciting news for those working in the bizav industry as the company will be hiring pilots and flight crews to service the planes. The company is reporting a 96% year-over-year growth for the first six months of 2013.
JP Morgan Says Business Jet Market Is Improving
JP Morgan’s September 2013 report on the bizav industry suggests “subtle improvements” for the global market. They cite a 4.7% rise in U.S. flight operations in July, “the fourth consecutive month of year-on-year growth.” With U.S. operators flying more, indications are good for continued growth.
We hope to see more positive bizav headlines in the coming months and heading into 2014!
The 8th annual Jet Expo in Moscow wrapped up last weekend. This year’s show had more than 40 static aircraft displays and 100 exhibitor booths. The show took up 1.5 times the space of last year’s show, and Gulfstream, Bombardier, Cessna, and Boeing were just a few of the big names to show off their latest models of bizav aircraft.
Russian demand for business jets has grown exponentially in the last decade, which is keeping pace with their economic development as a BRIC country. A spokesperson for Gulfstream, one of the participants in this year’s Jet Expo, said they sold to their first Russian customer in 2002. Today, they have nearly 60 customer-operated Gulfstream jets in the country. The company continues to have a positive outlook for the future of business aviation in Russia, and they’ve stationed major inventory locations throughout Europe to better service their Russian customers.
Bombardier was also at this year’s show with three of their jets on display: the Challenger 300, Challenger 605, and the Global 6000. They hoped to capture some of the growing Russian market by highlighting the efficiency of their aircraft. They showed off the plush interior of their planes as a way to increase the productivity and comfort of the business traveler. Bombardier noted that they believe they have the diversity in aircraft to meet the needs of the Russian customer.
Universally, manufacturers are expecting Russia to continue to be a hot market for business jets. While Russia experienced a second quarter decline this year, it doesn’t seem to be affecting the business aviation industry. Russia lifted some of their hefty taxes and complicated import rules on small aircraft in 2012, further opening the market. These are all indications that next year’s Jet Expo will be even bigger and better.
The 10th Annual Latin America Business Aviation Conference & Exhibition (LABACE) just wrapped up in Sao Paulo, Brazil, on Aug. 16. Last year’s show had a 10% increase in attendance (even with entry fees going up!), making this bizav conference the largest of its kind in South America and the second largest in the world.
It’s the perfect opportunity for manufacturers to display their private jets in a country that’s well known as one of the biggest emerging markets in the world, along with Russia, India, and China.
Here are some highlights from LABACE 2013:
- Embraer increased its show space at this year’s LABACE, reserving enough room to show off its entire line of private jets. Embraer is one of the leading manufacturers of private jets in Latin America, claiming a strong 38% of the market.
- Gulfstream brought out its highly acclaimed G650, which was available for viewing by appointment only. The G280 was on display for the first time at LABACE as well, making the journey into Brazil from Puerto Rico at an average speed of Mach 0.81.
- Dassault’s Falcon 2000S made its LABACE debut. The company touts this aircraft as a solution to the unique situations pilots contend with in South American airspace, including challenging airports and the common long-distance flights.
- Bombardier brought an impressive line-up of its private jets, including a Learjet 45 XR and a Global 6000. Bombardier predicts that more than 2,300 private jets will be delivered to the Latin American market between 2013 and 2032. That indicates huge growth potential for the bizav market in the coming years in South America.
In total, more than 80 private jets were on display at Congonhas Airport, the location of this year’s show. There were an estimated $700 million worth of deals struck at last year’s show and those numbers are only expected to be higher for 2013. LABACE will remain at the Congonhas Airport in Sao Paulo for its 11th year in 2014.
There’s a lot going on in the world of general aviation right now. Let’s take a look at some of the major stories we’ve been following on the Web this week.
New Drug Warnings for Private Pilots
Twelve general aviation organizations have joined forces to warn private pilots about the dangerous side effects of certain medications. These medications, including over-the-counter drugs with antihistamines, could impair a pilot’s ability to fly. The group estimates that nearly 12% of accidents in the last decade were due in part to pilots who had taken banned medication.
House Acts to Energize Small Aircraft Manufacturing
On July 16, the U.S. House of Representatives voted to pass the Small Aircraft Revitalization Act. The act will “improve safety while cutting the cost of certification in half for light general aviation airplanes.” Manufacturers should be able to get innovative new aircraft designs to market sooner, and become more competitive in the world market. The Machinists union backed the act and predicted it will help spur growth and bring more new jobs to the industry.
Private Jet Reservations Go Mobile
More and more private jet companies are finding success in offering booking apps on mobile devices. PrivateFly, a charter jet company based in London, recently took a $500,000 booking from a family in the Middle East, shattering the prediction that customers would never use mobile apps for high-priced booking. Some companies, such as XOJet, don’t believe wealthy fliers will ever move solely to apps and have no plans to integrate mobiles apps into their business plan. Still, the apps are opening up the use of private jets to millions of new customers and could be a big boost to the industry.
No Open Season on Drones
The town of Deer Trail, Colo., is causing a stir in the ongoing protest against drone use in U.S. airspace. The town is considering a proposal to issue hunting permits for drones, which would include a $100 bounty for each downed drone. The move has prompted the FAA to issue a statement saying that “shooting an unmanned aircraft could result in criminal or civil liability” and warn that a drone that is shot down could collide with people or property. Deer Trail isn’t alone, though, as dozens of states and cities are proposing laws that would ban drones in their airspace.
NextGen Implementation Off Schedule
The FAA has been developing its NextGen system for providing “safer and more efficient air traffic management” since 2005 and gave a target date of 2025 of implementing the system. Congressional testimony this year brought to light that the agency may not be progressing as promised. There is great concern that the culture of the FAA is resistant to the change, and the innovation promised by NextGen isn’t really so innovative after all. There will be an audit to find the causes for the delay in NextGen’s development and implementation by the FAA.
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Tired of turning off your electronic devices at the beginning and end of a long flight? You might not have to for much longer. A government-industry group formed by the FAA is expected to recommend relaxing the ban.
Currently, flyers are asked to shut off their devices while the plane is below 10,000 feet for fear the devices will interfere with the plane’s instruments. The rule that forces eReaders, iPods, and laptops into off mode was actually written in 1966. At the time, there was concern about electromagnetic interference from devices. But no one could have predicted the proliferation of consumer electronics. So the FAA asked the panel to look into whether it is, in fact, okay to keep electronics on for the duration of a flight.
The panel found that today’s aircraft are much more resilient to interference than their 1966 predecessors. Today’s devices are less of a concern, too. They emit much weaker signals and stay in a tighter frequency range. That makes them less of a concern to the safety of the aircraft. The combination of hardier aircraft instruments and more sophisticated consumer electronics persuaded the panel to give electronics use a thumbs up.
The rules won’t change immediately, however. The final report won’t come out until the end of September, and the FAA won’t change standards until that happens. Commercial airlines are already looking to capitalize on the potential new rules. Consumer demand for in-flight WiFi on both commercial and corporate jets is huge. This opens up new revenue opportunities for commercial carriers.
One popular gadget hasn’t been granted amnesty on board, however. Cellphones use a much stronger radio frequency, so there is still concern that they could interfere with the plane’s instruments. The panel didn’t examine cellphone safety, so for now, taking calls in-flight will continue to be banned—much to the relief of fellow passengers.
This is all good news for future commercial flights. Passengers will be happy to stay connected to what’s happening on the ground. Of course, it will also be nice to watch your favorite TV show while waiting for take off.
Wouldn’t it be cool to build a jet from parts you produced in your hangar? 3D printing just might make that dream a reality.
3D printing technology has been around for nearly 30 years, with the first 3D printers developed in 1984. The technology has only improved. The printers use materials like plastic to print instead of ink, and they were originally adopted by manufacturers to efficiently create prototypes. Later, the medical community began printing pieces to repair organs. Scientists even “printed” a working, miniature kidney. 3D printing is becoming more affordable, too, and more 3D printers are becoming available to consumers for at-home use.
Opportunities for aviation
This has the potential of having a big impact on bizav. 3D printing is capable of creating large pieces needed for the manufacturing of aircraft, and the pieces meet the strict manufacturing requirements of aircraft parts. They also have advantages over traditionally manufactured pieces, including being lighter and stronger. One such piece created through 3D printing technology was a 3-meter wing span. The piece will be used in manufacturing a passenger plane in 2014 and enter commercial service in 2016.
GE is working to increase 3D printing speeds, and is hoping to use the technology to speed up the production rates for their LEAP fuel nozzles and jet engine components. The fuel nozzles created on a 3D printer are lighter and more efficient than their manufactured counterparts. These advances could lead to quicker turnaround time for finished corporate jets, and increase their safety and performance.
Future applications
Where is 3D printing technology headed? NASA is sending a 3D printer to the International Space Station. Over 30% of the ISS’ parts can be made by a 3D printer, which means astronauts will be able to manufacture tools and parts they need. They won’t have to wait for something to be launched from Earth.
The potential for inexpensive, reliable manufacturing with 3D printers is exciting. It will be interesting to see how larger manufacturers begin integrating 3D printed pieces into corporate jets and how that affects the industry. With quicker production times and stronger, more efficient pieces being produced, it definitely seems like a win for both manufacturers and buyers.
The annual European Business Aviation Conference and Exhibition (EBACE) has ended its three day run in Geneva, Switzerland. The event encompasses exhibits by a variety of vendors, a display of aircraft, and sessions on education, maintenance, and operations related to corporate jets. It’s the biggest event in the aviation industry in Europe. By all accounts, the show was a success again this year and has energized the industry with some exciting announcements.
Let’s take a look at the numbers:
- There were 12,353 attendees through the doors during the 3-day event
- 460 exhibitors, which was the 3rd highest number in EBACE history
- 52 aircraft were on display at the Static Display of Aircraft
- There were over 400 reporters in attendance, covering over 30 press conferences during the event
- Four companies received the Safety of Flight Award, in recognition of their commitment to safe operations.
One of the items introduced during EBACE2013 was the new Challenger 350 from Bombardier. Forbes is predicting the Challenger 350 will be a “winner in the resurging business aviation market.” The 350 has many improvements over its predecessor, the 300, including better performance and amenities. Bombardier will continue to offer the 300, and deliveries on the Challenger 350 will begin early next year.
Representatives from Cessna spoke during the conference and said that despite the financial trouble the EU has experienced over the last few years, they are confident that the market is set to rebound. If that’s true, it could point to growth in the aviation market. Cessna said they are still on target to start delivering their new Citation X by the end of the year.
EBACE remains one of the most important events in the European private jet industry. It’s a terrific opportunity for buyers and sellers to connect with the European market. The conference will return to Geneva, May 20-22, 2014 for its 14th year.
We’re nearly halfway through 2013, so this is a great time to take the pulse of the aviation market. The numbers are mixed, but generally positive. The high-end, large-jet market and twin turboprop deliveries were the main cause of positive growth within the industry. The light jet market is showing negative growth, with Cessna and Learjet deliveries at a crawl and the manufacturers slowing production lines. Overall, however, the industry continues to make gains:
- Worldwide, there was a 4% increase in deliveries of corporate jets
- Q1 of 2013 saw a total of $4.6 billion in billings for all general aviation airplanes—a 31.7% increase over the same period last year
- The General Aviation Manufacturers Association (GAMA) said there was a nearly 10% growth in aircraft shipments in the Q1 of 2013 compared to the same period last year
- The twin turboprop market showed an 80% increase, due in part to demand from the agriculture industry
Gulfstream and Bombardier led the industry in positive growth:
- Gulfstream increased its year-over-year output of jet deliveries by more than 50%
- Bombardier saw a 34% increase in their jet deliveries compared to last year
- Bombardier also shipped 13 more business jets in Q1 than they did in Q1 2012
We wrote about predictions for the 2013 jet market last December. Honeywell’s prediction about slow but steady growth holds true, and may have even been a little conservative. While we haven’t seen wild gains, we have seen a steady increase in deliveries over the last year especially within large-cabin jets. That’s better than the flat or slight growth predicted for 2013. The fuel cost roller coaster and unease in foreign markets continue to cloud the ability to predict how 2013 will wrap up. However, if the demand for high-end-large corporate jets and twin turboprops continue, we should all have reasons to celebrate by year end.
Some scholars, journalists, and educators have written many and varied articles about how the emergence and rapid adoption of the Internet and World Wide Web has led to unprecedented globalization. Certainly it is much easier to get in touch with people all over the world, and corporations can source their products and materials from a wide variety of locations. Globalization has also had a palpable impact on the private jet market.
But the increased globalization of the private jet market has less to do with Internet technologies and more to do with the frustratingly stagnant economy in the U.S. and Europe. Whereas most private aircraft were sold to companies and individuals in the Western world, now aircraft manufacturers have turned their eyes to emerging markets in Asia and Africa.
On Feb. 25, United Press International (UPI) reported that Embraer wants to “expand its share of an international executive market, which is seeing more players than a decade earlier.”
And the General Aviation Manufacturers Association’s (GAMA) 2012 General Aviation Statistical Databook and Industry Outlook clearly demonstrates the growth in demand for business jets throughout the world.
- Deliveries to Asia-Pacific rose from 4.2% of total deliveries in 2007 to 11.8% in 2012.
- Deliveries to Latin America rose from 7.5% of total deliveries in 2007 to 11.6% in 2012.
- Deliveries to Middle East and Africa rose from 5.2% of total deliveries in 2007 to 6.1% in 2012.
While Asia-Pacific demand has more than doubled the region’s share of business jets, the market in Africa has experienced more fluctuations. However, earlier this year, Cessna and Bombardier both showed a keen interest in African markets.
As the private and business jet market segments continue to slowly grow, look beyond the U.S. and Europe for opportunities. It only makes sense that jets, a vehicle that can cross timelines in mere hours, would be truly global commodities.
What are you thinking about in the aviation world this week? Looking at the news this week, my thoughts have gone from the bizjet market to pack-n-go bikes to amazingly fast cars. And of course, sequestration. Raise your hand if you’re over it!
FAA and Automatic Budget Cuts
There is a lot of talk about how the FAA will handle the potential automatic budget cuts set to take effect March 1. (Tomorrow!!) Furloughs, delays, and cuts, oh my!
Bombardier’s Order Book Is Full
Everybody likes some good news every once in a while, and the bizjet market could certainly use a little sunshine. Bombardier is really rocking right now, with a 43% increase in jet orders in 2012 over 2011. There is an underbelly though: Bombardier reported lower earnings in the 4th quarter of 2012, causing stocks to slide. And the Learjet 85 has been delayed about six months, but the huge number of orders for Challengers should help turn things around.
Jet Setter’s Dream Bike
If you like traveling but can’t live without your bicycle, then this new handmade two-wheeler from Holland Cycles is just for you. It packs up compactly to fit into a standard S&S travel case. Called the Holland Jet, the bike relies on the Ritchey Break-Away travel bike design.
Beechcraft Looks to Unload Hawker Jet Business
Hawker Jet Business is for sale! Now the question is who will buy it? A deal with China’s Superior Aviation Beijing Co. broke down last fall, but the assets have been broken up. Beechcraft is only selling off the jet part of the corporation. Apparently five companies have expressed interest. Who will be the new owner?
New Superfast Supercar
Feel the need for speed? The McLaren P1 will scratch that itch. Go 60 mph in less than 3 seconds. But you’re going to have to hurry — McLaren is only making 375 of them. You’ll need to snatch yours up right away.
That’s quite a shopping list: fold-up bike, McLaren P1, Learjet 85, and Hawker Jet Business!
