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
- 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
- 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.
Most people don’t think twice about taking a breath — but breathing is nothing to take for granted on an aircraft.
Too close for breathing comfort
The close quarters of a private jet — with limited breathing room — can increase the risk of catching an infection. In addition, pollutants such as engine fumes leaking into the cabin may pose a threat to the health of crew and passengers alike.
An aircraft cabin exposes occupants to outside and recirculated air, just like a home or office. On an aircraft, however, people are much closer together. Also, occupants can’t leave at will, and the aircraft interior must be pressurized.
Without ozone converters, elevated concentrations of ozone occur on aircraft, causing airway irritation and reduced lung function.
Technologies are available to address the issue of infections, contaminants and pollutants. AirManager, an air-sanitizing system adapted from one used in hospitals and nursing homes, can eliminate bacteria, viruses and other biohazards. It also destroys chemical pollutants and removes unpleasant smells.
Pressure rises
Pressure is also a breathing issue on aircraft. At 8,000 feet, a passenger’s oxygen intake is reduced by about 4 percent — not enough to cause harm, but enough to make passengers feel fatigue. Small children and people with cardio or pulmonary ailments may experience serious health effects.
But some aircraft manufacturers are working to combat the effects of pressurization. Some 2012 Gulfstream models, for example, will include technology that keeps cabin pressure equivalent to 2,800 feet, even when the aircraft is cruising at 41,000 feet.
If you require specific equipment or accommodations in your private aircraft, you can breathe easier with the help of a private jet broker. A professional broker can quickly locate the aircraft with just the features you need.
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?
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.
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.
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.
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?
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.
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!
If the need for a private jet in the day-to-day operations of your business is obvious, the next step is determining whether you should buy one outright or invest in fractional ownership.
Your course of action ought to depend upon how frequently you would use the aircraft, your corporate budget and the available aircraft.
Full jet ownership
Many think that full jet ownership is the only possibility when it comes to using and depending on private air travel. Obviously, if you or your company has full jet ownership, then it is yours, much like a car or house. Full responsibility for all aspects of the jet is yours, but you also enjoy having a private jet at your disposal anytime.
Fractional jet ownership
A condominium time-share agreement is fairly similar to fractional jet ownership. With this system, an individual or company pays a set amount and is then guaranteed a certain number of hours of use over a year or five years. In order to use the jet, fractional owners must confer with the other owners to be sure it is available.
Unlike owning a jet, having access to a private plane through fractional ownership doesn’t mean you can go anywhere in the world; not all programs offer international service beyond the Caribbean and Mexico. And if they do, some programs are so cost prohibitive that travelers often opt to fly overseas commercially in first class and then work with a charter if they want to fly to their final destinations.
Despite these limitations, the National Business Aviation Association reports that nation’s fractional aircraft market has made a turn toward what appears to be a period of sustained growth.
Several factors contribute to the increased interest in fractional ownership:
- Commercial airlines are offering fewer flights to smaller markets.
- Businesspeople consider the time savings of a private jet a great value.
- Companies that offer fractional ownership are sweetening the deal with perks like rollover hours.
- Creative membership programs increase availability to new parties.
Professional guide
A jet broker can walk you through the advantages and disadvantages of full or partial ownership of a private jet. Experienced private jet brokers can provide you with information regarding all of your options, as well as provide information about available aircraft, specifications and maintenance costs to help you make the best decision for your lifestyle or company.
Average jet prices are down and planes are on the market for shorter periods, so it may be a difficult time to find the right plane and the best price. A broker is in constant contact with the market and will be able to get the deal you need.
It’s always fun to think about the innovations and advances that will happen in the aviation industry. Especially in the design of corporate jets.
In November, Jeff Burger wrote a compelling commentary that practically begs for a reinvention of the corporate jet. He was opining about how the creativity and vision of the late Steve Jobs at Apple could do wonders for the jet industry. Instead of asking frequent travelers and industry insiders what they want, perhaps airplane designers should be proactive and show business travelers what they have been missing.
So much is made about the incredibly luxurious, world-class flying castles. Transparent floors, in-flight concerts, spiral staircases and fern-lined walls are simply not typical (or feasible) for the vast majority of private and corporate aircraft.
Instead of concentrating on over-the-top interiors that only a handful of billionaires will enjoy, remember how the simple things are often better. Steve Jobs planned his airplane to the most minute detail — famously replacing separate open and close buttons with a single toggle switch. It’s that attention to detail on the typical corporate jets that will be truly innovative.
