November has been an important month in business aviation. Growing markets in the BRIC countries (Brazil, Russia, India and China) as well as changes to U.S. appropriations affect the industry significantly. Also, the private jet community pays homage to an incredible leader, Teddy Forstmann.
New Association to Support Growth in Chinese Private Aircraft Market
The National Chinese Business Aviation Association (NCBAA) launched its website Nov. 28, 2011. China is a fast-growing market for private aircraft, and the newly formed NCBAA plans to offer a powerful association to support the burgeoning growth. The two main objectives of NCBAA are to provide an informational platform for all players in the industry and to promote the growth of business aviation in China.
Former CEO of Gulfstream, Teddy Forstmann, Died Nov. 20, 2011
Teddy Forstmann was known for many things, especially his incredible philanthropy and love of sports. To the aviation world, Forstmann will be remembered for his leadership of Gulfstream from 1990-1999. During his tenure, research and development were well funded, and Gulfstream became a great innovator of aircraft.
Congress Adjusts the BARR
Since the August changes to the Block Aircraft Registration Request (BARR) program, the National Business Aviation Association (NBAA) has worked diligently to reverse course. From 2000 until Aug. 2, 2011, BARR protected the privacy of aircraft’s flight plans, until the August change required operators to prove a security concern in order to be blocked from public, online tracking databases. However, Nov. 22, 2011, saw the passage of an appropriations bill in Congress that keeps the FAA from continuing with its changes to the BARR program that were initiated three months ago.
I have been following closely the “Occupy Wall Street” protests going on around the country to see if their protests have reached us here in the area of business aviation. To date, I have yet to see any specific attacks on the industry in spite of the fact that private and corporate jets and a major industry that is used by the 1% that is under scrutiny. It is true that the 1% that is being held up as part of the elite that is the target of the people that are protesting are a major contributor to the business aviation industry by way of purchasing and leasing private jets. It is also important to understand that the world of business aviation is a major contributor to well paying jobs and contributes to manufacturing and jobs that President Obama is trying desperately to bring back and make a part of his jobs bill.
In a letter and statement to President Obama, the National Business Aviation Association expressed their displeasure in what has been an underlying attack on the industry by statements made by the President, and in part I thought I would restate what the NBAA stated that may be pertinent:
Business aviation represents one of the great American industries. It generates highly skilled and well-paying jobs, including the kind of manufacturing jobs you have said are a priority for your administration. It brings economic development to thousands of communities with little or no scheduled airline service. It helps U.S. companies be efficient and flexible – important traits for businesses trying to compete in a global marketplace. And, business aviation helps our country care for its most vulnerable, whether responding to earthquakes and floods, transporting organs for patients, or taking cancer victims to treatment.
To date, the protests have not targeted our industry as an elite only industry, but I assume as they get better organized they will begin to hold out companies that cater to the 1%. I hope that the NBAA is working on a strategy to combat those claims and that they look at the overall industry instead of making disparaging remarks or making it appear that the industry is to blame for the current economic crisis.
For a copy of the NBAA June 30, 2011 advocacy letter to President Obama, it can be downloaded from their site.
It is day 2 of the 64th Annual National Business Aviation Association’s event in Las Vegas and it is at a fever pitch and is at its peak. Senator Joe Manchin (D-WV) was one of the speakers at the event and he talked about the benefits of business aviation and how it helps our country. He stated “Every state benefits from general aviation.” He went on to state that 1.2 million service and manufacturing jobs are derived from the industry.
On safety, Federal Aviation Administrator Randy Babbitt, cited the industry’s critical role: “We have the safest aviation system in the world, bar none,” he said. “The business aviation community, and NBAA in particular, plays a very important role in helping us achieve that fantastic safety record and success.” National Transportation Safety Board Chairman Deborah Hersman agreed, citing the number of corporate fatal accidents in the last year: “zero.”
Many other leaders in the world of business and in aviation also took the stage at the event in Las Vegas yesterday morning and others are on stage today. We will be consuming many more bits of information and sharing with you the information we get from the event.
We continue to hear about how the business aviation industry is turning around or is in a rebound cycle and that all of the nations that participate in the industry on on an upturn. The good news is that this is the beginning of something good for the business aviation industry as a whole. The bad news as indicated is that Europe is not rebounding as quickly as its peers in the world of business aviation. Worst yet, it appears that they are not on the faster track of recovery as others either, according to Brian Foley of Brian Foley Associates. There are many factors according to Foley including, high fuel prices, user fees, carbon taxes, airspace issues, new regulations and airport slot restrictions. Foley stated “When you factor in sustained economic weakness, a near-term robust market outlook just isn’t a reasonable expectation.”
This seems contrary to the numbers that indicate that Europe will account for approximately 20% of worldwide deliveries over the next 10 years. Foley goes on to state that he believes first-time aircraft buyers will be generated in Eastern Europe, while Western Europeans will be purchasing replacement aircraft. Foley stated that many will be buying on a budget instead of springing for more jet than they can afford. We hope that this is not the case but we also know that any recovery at this point is better than the downturn of the past.
We have heard the old saying that perception is reality and it appears that the perceptions of the public are what is being touted as the next need for change in the business aviation industry. In opening remarks at the EBACE event in Geneva Switzerland it was stated by Brian Humphries the EBAA chairman, “Recognition of our industry’s value is evident at the European level but not in the 27 member states.”
The NBAA was also represented by Ed Bolen, President of the organization when he stated, “It is incumbent on our industry to be aggressive in talking about how we operate.”
This seems to be the stance that is going to be taken by the industry going forward. First the economy was a major factor in the downturn and now that the industry has weathered the storm it appears that is must go on the offensive and show that as an industry we need to polish the image and be advocates and evangelists of the industry. Finally, Britain’s Lord Hesketh wanted to impart that without business aviation economies would not make it. “Companies that do not have the ability to move key personnel are going to fall behind.” He further said, “We do have to get the perception issue right.”
This is a new tact that may gather steam if we continue to hear reports of the economy recovering in the industry. It sees that by being aggressive in the perception of if the industry it will bound to help gather the steam in the right direction.
We continue to get good news from the industry and this is a trend at the EBACE event in Geneva, Switzerland. The latest in good news comes from VistaJet a Swiss business jet operator. The company announced today at the event that they have an order for 18 Bombardier business jets, which will bring its fleet to more than 50 aircraft.
It is reported that the order, valued at $383 million, includes 12 Globals and Challengers and six Learjet 60 XRs. Deliveries of the order should begin in 2012. The founder, owner and the chairman of VistaJet, Thomas Flohr, in a statement said his company’s current order backlog is valued at $1.3 billion. It is also reported that the company has on order currently, 10 Global 6000s, six Challenger 605s, 11 Learjet 85s and six Learjet 60 XRs. VistaJet operates a Bombardier-only fleet. Flohr stated out that 75% of the operator’s flights now originate from or go to “fast-growth markets,” such as Brazil, Russia, India, Nigeria, China and the Middle East. This shows in increase of 50% over this period four years previous.
Flohr stats that 2011 is “off to a good start,” he reported that 20101 saw a 25% increase in revenues over the previous year. Flohr revealed that approximately 20,000 passengers traveled aboard VistaJet aircraft last year. Flohr stated the company is “centered on [the passengers] actual requirements, rather than a perceived desire for abstract ownership.”
Embraer joins in the news at EBACE when it received an order today and announced at the event that Comlux has placed an order for three of the Embraer Lageacy 650’s with the possibility of increasing the order for 4 more of the aircraft. This marks the very first order for the Legacy 650’s from Embraer from this company. The company only has on hand at present aircraft from Airbus and from Bombardier. Embraer will deliver the first aircraft in December, with the remaining two Legacys to be handed over early next year.
Comlux Kazakhstan currently has four aircraft in its fleet which includes two Bombardier Challenger 605s and two Challenger 805s. The company’s COO, Irina Pay, reported that Comlux is located in a perfect place between Russia and China, which makes it a the best place for a charter operator of its kind. Comlux Kazakhstan also provides aircraft dispatch, ground handling and flight operations services.
May 17 through 19 marks the 11th annual EBACE event in Geneva, Switzerland. We are looking forward to hearing many of the exhibitors and others give us an idea how the industry is performing. This time last year we were hearing all about how the economy was putting a damper on jet sales or orders in the industry and this year we are hoping to get the good news that those companies that are in the game continue to be optimistic.
At Geneva PALEXPO, EBACE showcases nearly 300 exhibiting companies from around the world and covers more than 36,000 square meters. At nearby Geneva International Airport, more than 60 aircraft, including nearly every major business aircraft design in current production, will be on display in a special 18,000-square-meter Static Display area.
As the information on the expo becomes available, we will be updating the blog here with that information. If you are at the EBACE event please let us know we would love to showcase you here in the blog posts and also would love to hear of your experiences with the event.
I just returned from our nation’s capital in Washington DC. I was recently attending the Points of Light Institutes’s Tribute for President George HW Bush and landing at Dulles I noticed the lack of many corporate jets. It seems that the economy makes it difficult to find the leaders of the country using private business aircraft. It may be the location that I landed or it may be that they are all traveling in other places or it could be that corporate jets are not welcome in that part of the world.
We all of course remember the tongue lashing the leadership of the car makers received when they took their private business aircraft to the capital when they were asking for the bailouts they received when the economy headed down. It may be that corporate jets are still a black mark or not well received. The National Business Aviation Association continues to combat these types of thoughts. It would be interesting to see if the trend continues or if we will see more private jets at airports in and around our nation’s capital.
There did seem to be no shortage of private helicopters flying in and around the city. I think it may be related to the way the traffic patterns are in the DC. I for one would have loved not to be caught in traffic on the highways and in the city.
It has been reported that Representative Jerry Costello, (D-Ill.) is once again championing the issue for business aviation on use fees to be charged. Representative Costello serves on the House Transportation and Infrastructure Committee, and he has issued a statement on Friday urging President Obama not to include general aviation user fees in the upcoming budget. He put forth in the statement:
“We want to reiterate that a user-fee proposal would be a step backward,” he wrote. “This is an issue that we have had bipartisan agreement on in recent years and there is no reason to reconsider it. I will not support a budget or an FAA reauthorization bill that includes user fees.”
Representative Costello is rallying support across congress to support his measures. Another that has noticed and is also rallying behind Representative Costello is National Business Aviation Association president Ed Bolen. President Bolen is applauding Costello’s efforts and joins in his position on usage fees in business aviation. Currently the business aviation industry supports funding of the FAA through the use of a fuel tax and that seems to be the tried and tested way of funding and not any as yet untested use fees. It appears that it would be a tough road to have usage fees change the way we fund the industry association through this source.
