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2009 Outlook:
The sky is not falling.

Here’s an important message we’d like to put across at this early stage in this New Year: The sky is not falling for 2009- but the ceiling will drop down somewhat. None of the economic news indicates a recovery starting any earlier than mid- to late-2009.

Remember the ads that said ‘buy now- pay later’? Well- ‘later’ is now- and I think it will take a bit of time- and pain- to get out of this mess. Right now there is a lot of uncertainty. Conservative financial decision-making is suggesting a wait-and-see on a lot of projects for many people and companies.

Regarding business aviation- the used aircraft market is very quiet. New aircraft sales are slow across all the market segments. However- that means there are some incredible deals out there. If you are selling and you get a qualified offer- you can either accept it and get the cash- or plan on waiting another six months to get the same or a lower offer.

If you are buying- act now. Good aircraft for sale are available now and while prices may drop some more- don't expect to see the selection change much more. There are folks who are thinking of selling- but unless it is a forced sale- they are waiting for the market to improve. I see the supply of used models increasing- but in small increments.

If you are looking to buy- be sure to work with someone who knows the industry and knows the aircraft you need. A good price does not alleviate the need for you to do your homework.

Unfortunately- flying activity among those who are keeping their aircraft is likely to remain flat or decline in 2009. That means less revenue for FBOs- reduced maintenance for MROs- and less need to charter to supplement a busy flying schedule.

Traditional not-for-hire flight departments will still be in the gun sites of some in the press. GM and Ford ‘surrendering’ their aircraft may have been the low point- but look for more articles about ‘royal barges’. Now is the time to get out and sell the benefits of business aviation- harder than ever. If you are flying less than about 250 hours per year per aircraft- your flight department is on the cusp of being on the chopping block.

How about fuel prices? Who thought they would drop so much- so fast? Until the economy improves- fuel prices will stay low relative to early 2008 prices. They will go up again- maybe around the time the economy picks up. (See below for our latest check on full service fuel prices- comparing November and December).

Cash flow will be critical in 2009. You need to track and understand your aircraft costs in order to effectively manage and control them. We look forward to helping you weather the storm in 2009.

As part of our monthly e-newsletter- we look up full service fuel prices at about 30 major general aviation airports in the US. In order to secure the most current prices- we contact at least one FBO at each of those airports by telephone. Our list was selected with common business destinations in mind.

For December 2008- prices were:
Jet A = $5.11 per gallon
100LL = $5.52 per gallon

For November- 2008- prices were:
Jet A = $5.50 per gallon
100LL =$5.97 per gallon

David Wyndham is an owner of Conklin & de Decker. The mission of Conklin & de Decker is to furnish the general aviation industry with objective and impartial information in the form of professionally developed and supported products and services- enabling its clients to make more informed decisions when dealing with the purchase and operation of aircraft. With over 1-800 clients in 90 countries around the world- Conklin & de Decker combines aviation experience with proven business practices.

More information from www.conklindd.com; Tel: +1 508 255 5975

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