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US BUSINESS AVIATION SNAPSHOT
It only sounds like the same old song... business aviation growing despite challenges

Few indicators provide stronger evidence of the strength of the business aviation market than a recent Wichita news story- in which area aviation executives stressed their imminent need for more workers for their plants.

With the likes of Bombardier- Cessna- Raytheon and even Spirit AeroSystems – the year-old former Boeing Wichita – all citing increased demands for their products- local political and educational officials are working to establish a new- broader program for training workers for the aviation industry. Make that primarily for the manufacturing industry.

Other efforts and the needs they represent hint at the bigger picture – a picture also needing more mechanics- more pilots- more dispatchers- ramp workers- cabinet makers and even flight instructors.

While general aviation overall struggles to restore growth to the number of new student pilots entering aviation each year- the number of jobs available to fill continues to expand. Why? Take a look around the upcoming National Business Aviation Association meeting in Orlando- October 17-19. The association’s 59th annual convention and trade show is booked to the gills – because business aviation is booming.

Order backlogs are bulging; lines are humming at or near capacity – and about to grow in capacity; deliveries are up; and aircraft aren’t slipping off to retirement at anywhere near the rate that new business aircraft are coming off the assembly lines. Business is - to put it mildly - booming.

A bigger bang?
It’s possible that a bigger bang is about to round the corner. For the latest evidence- watch the stories that come out of the NBAA convention this month: Cessna is poised to launch the CJ4 and likely another model- as well. And it’s a rare NBAA when only one jetmaker launches a new model.

Cessna’s Mustang has celebrated it’s FAA approval- and some other in-development models that seem to perpetually be nearing certification could be celebrating theirs too come the Orlando convention. Already holding its provisional type certificate- the Eclipse 500 appears near to earning its unlimited papers- which will open the gates to the delivery of the first of nearly 2-500 Eclipse 500s the company claims on its order books.

Even Adam Aircraft seems to be making progress toward receiving its flying papers for the A700 VLJ while the calendar still says 2006. With a host of other VLJs in the pipeline and yet another category – the Personal Jet – beginning to take form- only two groups that come to mind are worried about business aviation growing too much or too fast.

First among the two groups worrying is the commercial airlines. They fret that all these new choices and the flexibility and economy they promise might make their own offerings far less attractive –particularly to their higher-dollar passengers. Throw in today’s security environment and they are right to worry.

The other group with its own concerns is the Federal Aviation Administration- where specialists earn their paychecks indulging in specialized worrying about where things are going- how to get us there and how to manage the entire aviation enchilada five- 10 and 20 years down the airways.

Interestingly – and dangerously for business aviation – is the unholy alliance formed between the airlines and the regulators to establish an entirely new funding stream that will handicap the carriers’ competition – private aviation.

The carriers have been feeling the heat of fractionals for some time. And- sure- maybe some of the bloom has come off the flower that was fractional ownership’s overall impact during the past decade. But that means only that more individual entities – people and corporations – are opting to go it alone as owners… even if they hire a management firm to staff and operate their investment.

And even with the unstoppable entry of the VLJ as a reality we don’t reach the end of the growth potential for business and general aviation. Yes- folks- the downsizing of the business jet continues- albeit not yet as visibly as the VLJ made such shrinkage a few years ago.

Already flying – and looking quite promising – is the first Personal Jet. And the line to fill that niche is already forming.

The Personal Jet
This marketing driven category name is the best we’ve heard yet to describe a new category of jets even smaller and lighter than the VLJs.

From what we know so far- the PJ may finally help realize the long-held dream of a single-engine jet- a jet devoid of characteristics that make even the diminutive VLJ an insurance and regulatory challenge.

The current ruler of the four-place piston market- Cirrus Design Corp.- is working on a Personal Jet. In fact- Alan Klapmeier- the company’s head- coined the 'Personal Jet' moniker about a year ago when he told reporters that Cirrus was unequivocally not working on a VLJ. He then paused- waited a beat- and dropped a lead-weighted hint of Cirrus’ ambitions to apply its technologically advanced airplane approach to a new Personal Jet.

The New Piper Aircraft Corp. is another company with its eye on a personal jet – something not directly competitive with the HondaJet VLJ the company recently agreed to support with its marketing and maintenance infrastructure.

And these two prospective contenders in the all-new PJ market already lag far behind Diamond Aircraft. With its new D-JET well into flight tests – and fresh off a crowd-stopping appearance at EAA AirVenture in Oshkosh this July – we can look to the D-JET for some hints to what will make a ‘personal jet’ personal.

P.I.C. Oriented- Period
Diamond’s engineers approached the design of the D-JET with the individual pilot their main concern – based on their belief that the target market is the move-up pilot who wants a jet but faces hurdles in the form of a lack of turbine-aircraft experience- in a lack of multiengine time and a void in high-altitude qualifications. The D-JET avoids all of those issues.

For example- the D-JET employs a single FJ33 powerplant- putting it in the running to become the first single-engine jet to make it from drawing board to delivery. With only one engine- the D-JET obviates any multiengine experience requirements.

The service ceiling of 25-000 msl eliminates the need for a high-altitude endorsement and the required training for flight at higher altitudes. The ceiling also simplifies systems and improves survivability in the event of rapid decompression.

And the combination of the two means that only a high-performance endorsement is needed – though Diamond plans special training to indoctrinate its D-JET buyers into the considerations of flying with other jets and turboprops.

Lower direct operating costs and lower training and insurance rates are other benefits of Diamond’s approach. So an observer wouldn’t be risking much to expect similar traits out of the other Personal Jets in the offing.

If past is prologue- those new personal jets will start a new round of pilots moving up the chain to ever larger jets as their wants and needs evolve – from PJ to VLJ- VLJ to Light- Light to Mid-size- etc. And that movement should spur further sales in larger jets over the years.

Other indicators point to a ripe market
There’s more to come in the development of new jets. Remember the VisionAire Vantage? In the latter 1990s- the Vantage looked like it might become the first single-engine jet and if it had – coincidentally – it would have been the first VLJ- even without the name.

The Vantage failed under the weight of mistakes- misjudgments and underfunding – a not-uncommon outcome for many a new-aircraft program. But it’s back in the form of Eviation Jets’ redesigned Vantage. No longer a single- five-to-six seater- Eviation’s redesign made the little bird a twin with seating for up to 10 – but still a forward-swept wing and composite airframe. Certification work is underway in Brazil.

And then there’s the Epic- the Spectrum 33- Maverick’s Solo- Embraer’s Phenom 100- Excel-Jet’s Sport Jet- and who knows what else waiting in the wings. Even Honda- the Japanese engine/auto/motorcycle giant- chose EAA AirVenture to finally end years of speculation and confirm what many already believed: there’s a HondaJet in aviation’s future – and it’s a VLJ.

Higher up the flight chain: All’s well
In addition to its VLJ- Embraer has the Phenom 300 light jet in the pipeline- and a large-cabin variant of an airliner nearing approval as a business jet. Dassault’s 7X is rapidly approaching certification; Raytheon could yet see its unrestricted Type Certificate for the Hawker 4000 (nee 'Horizon') by year’s end.

With virtually every planemaker in business aviation predicting more production and deliveries in the coming three years- the biggest question on many observers’ minds is how the boom will top out: with a plateau or a dip?

Even forecasts of a dip – some four or five years away – show only a blip- so small a drop that this year’s deliveries will still be smaller after the dip hits. Clearly- business aviation is in the midst of boom times – with supersonic business aircraft- sans 'Boom!' the new frontier with at least three programs working along parallel tracks.

Personal security
Few aspects of modern life seem to influence us like our personal safety and five years after the worst terror attack in American history- business aviation is a prime beneficiary of the ongoing climate of fear and paranoia that permeates mass travel today – particularly mass air travel.

British authorities’ August discovery of an alleged mass-murder plot by terror extremists ignited a new round of security concerns and sensitivities – and- as has happened several other times- a boost in calls to on-demand air charter operators and aircraft dealers and brokers.
Flying commercial became even more difficult and the mentality that any unusual action or event could be the precursor to an attack resulted in a higher-than-average number of diversions- precautionary landings and delayed departures in search of bottles of water- toothpaste or mouthwash- or errant electronic devices.

What does it all mean?
More need for more everything is what all of this means. More FBO capacity is already starting to emerge- as savvy investors look ahead to the needs of all those new jets and their new operators. Investments are up in old FBOs- consolidation continues – albeit at a slower pace – and new shops continue to open. More FBOs mean more staff needs – from the accountants to the mechanics and everything in between.

As NBAA’s president Ed Bolen notes- 'There are excellent opportunities and great careers available in our community'.

The growth even bodes well for dealers and brokers- as they grapple with the job of finding new homes for older jets displaced when their owner opted for something new.

You can see first hand how all this plays out in an integrated fashion by coming to the 59th NBAA Convention- Oct. 17-19. If the action there doesn’t convince you- consider buying futures in buggy whips.


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