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2006 BIZAV REVIEW

February 2007

Category: Corporate Aviation Company Profiles

Author: Dave Higdon

February 2007

The Year That Was
2006 was short on some expectations, but long on substance.


Back in 2005 a palpable murmur could be heard concerning 2006: “Will next year be the Year of the VLJ?” Well, in the end, “No,” was the answer; 2006 didn’t exactly turn out that way. However, 2006 was notable for some other reasons, VLJs swarming across the sky wasn’t one of them, as you’ll see below. So before the year just passed fades too far into our mental ROM banks, we thought it might be worth a look back on the high and low points of 2006. Hang on – it’s going to be a speedy ride!

JANUARY
The year started with more news on the VLJ front thanks to the first flight of the Spectrum 33. Other notable events in January included the first flights of Bombardier’s Challenger 605 mid-size jet, while certification came for Socata’s TBM 850 and Sikorsky’s S-76++.

FEBRUARY
We were off to a flying start on February 6th with the maiden flight of the first conformal prototype of the Adam A700 VLJ. And at Heli-Expo 2006, Bell introduced its latest turbine helicopter, the 417.

MARCH
Moving towards the end of the first quarter, March brought with it a flurry of developmental activity, starting with the certification of Ibis Aerospace’s Ae270 single-engine turboprop and certification of the Raytheon Aircraft Hawker 850XP; the first flight of Cessna’s Citation Encore+; and initial type approval of the Piaggio Avanti II.

APRIL
This month should go down in aviation history as the month another all-new jets for sale category approached reality with the first flight of Diamond Aircraft’s new D-JET, the first Personal Jet flying. As the year would pan out, the single-engine D-JET would soon have company in this new category.

MAY
With the year well underway, May brought yet another new entrant into the large-cabin business jet field when Brazil’s Embraer introduced the new Lineage 1000 at EBACE 2006.
Less than two weeks later another entrant in the Personal Jet field made its inaugural flight - the Excel Jet Sport-Jet.

JUNE
Bell Helicopter announced the first flight of the 417 model introduced four months earlier at Heli-Expo. On a less happy note, however, the Sport-Jet prototype Excel Jet first flew five weeks prior was destroyed in a flight-test crash.

JULY
Business aviation news in July focused on a decidedly general aviation event: the Experimental Aircraft Association’s massive AirVenture convention and fly-in. For it was at AirVenture that VLJ pioneer Eclipse Aviation received preliminary FAA approval for the Eclipse 500. Though full certification remained months out, the provisional type certificate gave the company bragging rights – temporarily – for being the first VLJ to win FAA approval.
Also at AirVenture, Honda displayed its HondaJet for the first time, a new design employing Honda’s own HF118 engines. The company confirmed plans to build the aircraft and announced a marketing partnership with Piper.
Finally, Diamond brought its D-JET to AirVenture for a few hours as its first public appearance, and winning rave reviews from no less than Marion Blakey, head of the FAA.
This same month brought an element of tragedy to the VLJ segment when Spectrum’s first prototype of the 33 crashed on take-off on what was supposed to be a routine test flight. The NTSB investigation found that the controls were misconnected.

AUGUST
We saw the first flight of the largest-yet BBJ with the maiden flight of the BBJ3, during August, signaling that BBJ partners Boeing and General Electric see continuing potential in the market for very large/very long-range business jets based on airliners.
This same month, Honda revealed more details of its aviation plans with the announcement of the formation of the subsidiary Honda Aircraft to manufacture its innovative little jet.
Meantime, Gulfstream’s first G150 entered service, and a NetJets Hawker 800XP survived a rare mid-air collision with a sailplane high over the mountains of Western Nevada. The sailplane pilot also survived after parachuting from his stricken aircraft.

SEPTEMBER
The news was good for Cessna during September, when the company received the full type certificate for the new Citation Mustang VLJ, just as promised when the program was launched at NBAA in Orlando, Florida, four years earlier. Late in the month Eclipse finally received full certification for the Eclipse 500 too, though some teething problems remained that delayed the start of customer deliveries.
The month also brought an unusually tragic story to business aviation when a U.S. registered Embraer Legacy 600 and a Boeing 737 operated by Brazilian carrier GOL collided high over the Amazon jungle. All 154 souls on board the 737 perished when the stricken airliner plunged into the jungle below, while, miraculously, the damaged Legacy with seven on board was able to make an emergency landing at a Brazilian military airfield about 100 miles away.
This tragic accident quickly took on political ramifications in Brazil as law enforcement authorities held the two pilots’ passports and refused to allow them to return home while pursuing a criminal investigation. Aviation groups around the world called for the release of the two American pilots and for an end to the criminal inquiry to allow the safety investigation to go forward.

OCTOBER
The largest gathering ever of the National Business Aviation Association Convention convened during October in Orlando, Florida. In fact, the NBAA Convention set new records at virtually every level – for the number of exhibitors, for the amount of display space used, as well as for attendance.
The NBAA meeting also brought a surge of developmental news, including the unveiling of Piper’s PiperJet, Cirrus Aircraft’s CirrusJet (yet another Personal Jet), Raytheon Aircraft’s launch of its Hawker 750 and Hawker 900 derivatives, the so-called Next Generation Pilatus PC-12 with Honeywell’s Apex panel, and the launch of Spectrum Aircraft’s S-40 Freedom light jet.
Honda also brought its new jet to NBAA for the first time and left with more than 100 orders for its first entry into the aviation field – after nearly 20 years of work. While the company says first deliveries will come in 2010, it has yet to name a manufacturing site.

NOVEMBER
The long-awaited certification of the Hawker 4000 – more than 10 years after the program’s launch was announced at the 1996 NBAA convention as the Hawker Horizon – took place in November. At about $20 million, the Hawker 4000 faces the Challenger 300 as its closest competitor in size and price. Meantime, the company holds orders for 74 Hawker 4000s, 50 of them with NetJets alone. What’s next for the Hawker line? That depends on the outcome of a December story we’ll get to below. This was also the month in which Cessna delivered its first new Citation Mustang to a California customer – who, in turn, handed the Mustang back to Cessna under a lease-back agreement that put the little jet to work as a sales demonstrator. And speaking of first deliveries, Sino-Swearingen delivered its first SJ30 in November – a full year after receiving FAA certification.
Arguably the biggest news of the month came not from the realm of aviation, but from the world of politics when the November 7th mid-term elections saw the balance of power shift in Congress to Democrats from the Republicans. This shift in power gave rise to cautious optimism that general and business aviation interests have a better chance of prevailing in their opposition to airline-supported user fees for funding the FAA.

DECEMBER
Year-end brought a string of important stories, with the top one being the $3.3 billion sale of Raytheon Aircraft Co. to a group made up of Canada’s Onex Partners and Goldman Sachs of the U.S. The deal includes the Raytheon FBO chain and completion center in Little Rock, Arkansas, but not the company’s fractional program, Flight Options, or Raytheon Airline Aviation Services.
The resulting company will be called Hawker Beechcraft when completed, a date which is expected in mid-2007. Unlike Onex Partners’ purchase of the assets of Boeing Wichita two years ago, this deal is for the entire company, lock, stock, employees and product line. Reaction to the news in Wichita, Raytheon Aircraft’s home town, has been largely positive on the expectation that the new owners will work to cut costs, and bring to market new and innovative general aviation designs.
At the start of the month, Boeing Business Jets announced the delivery of the 100th BBJ and a backlog of 18 still on order. With three variants now in the line-up, the BBJ concept seems destined to continue long-term.
Late in the month Brazilian authorities – ignoring international pressure and precedent – charged the two American Legacy pilots flying during the GOL mid-air crash, but then released them to return home December 9th after receiving assurances that the two aviators will return for trail.
Finally, on the afternoon of New Year’s Eve, Eclipse Aviation handed over the first customer Eclipse 500, fulfilling a long-ago promise to begin deliveries before the end of 2006. The jet remained in Albuquerque, New Mexico, into the New Year, however, so the company could hold a formal, celebratory delivery ceremony with its employees after the holiday weekend.

SO WHAT’S NEXT?
While it may be hard to imagine, 2007 holds the potential to be as momentous as 2006, albeit with a different mix of stories, events and products. 2007 may be the year in which the term “VLJ” takes on a decidedly real-world meaning beyond the abstract projections of the past years of development. More deliveries, more models.
The realm of the Personal Jet will also gain traction with the progress expected from the programs already in existence – and the distinct possibility of additions. Word on where Honda will make its manufacturing home is expected, and expect to see more on how the new Hawker Beechcraft fares after that transaction closes near mid-year. NBAA’s annual convention returns to Atlanta, Georgia, for the first time in years, with many observers wondering whether anything can top the 2006 show. Rest assured, though, there will be plenty of new aircraft development news to come in 2007.
But the story most likely to dominate business aviation minds won’t be about airframes, engines or avionics, but about how Congress handles reauthorization of the Federal Aviation Administration and funding the agency’s operations and developmental needs.
With the FAA hierarchy seemingly in lockstep with airlines and their Air Transport Association in their bare-knuckles pursuit of a new user fee driven funding scheme, business and general aviation interests need to continue their unanimity in support of continuing the current system of excise taxes – and participants in aviation from pilots to mechanics to owners and operators should get off the sidelines and into the game if they want to protect the aviation world as we know it today.
The names of the game are “power” and “economics.” The airlines want more power over the ATC system and the FAA, and they want to offload some $2 billion of the costs their passengers carry for buying airline tickets to general aviation users. This is the one story that will be with us until Congress settles the argument and makes a decision – hopefully no later than September 31, when the FAA’s current funding authority expires. Then we can all enjoy a fall break – hopefully comfortable in the knowledge that we won’t be paying a fee for every phone call, flight plan and flight segment.
We hope you’re having a happy 2007! It’s going to be a busy year!

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