By Joe Sharkey
October18, 2010
– THE business jet industry has been clobbered in the last two years by the dismal economy and public revulsion at some reported excesses of executives and their corporate jets. But there was Ed Bolen, the head of the group that represents the business aviation industry, making a bold assertion about the industry’s outlook.
“We are out of our defensive crouch,” he said, as 25,000 industry representatives began wandering into the convention center here on Monday for the opening on Tuesday of the annual convention and trade show for the group, the National Business Aviation Association.
His comments seemed even bolder, considering that the annual industry outlook released here Sunday by Honeywell Aerospace still showed a grim landscape. This year, the report says, 675 to 700 new business jets will be delivered to customers worldwide, down from 849 last year. Next year, it says, deliveries will remain below 700 jets. When you compare those figures with the 1,313 jets delivered in 2008, a year that capped a record five-year run of good times, it still seems that a defensive game may be in order.
But, Mr. Bolen argued, “things have stabilized.”
Of course, the captain of the Titanic might accurately have said the same once the ship settled on the ocean floor. But the fact is, there are indications that the business aviation industry is poised for a comeback. Honeywell’s forecast, for one, says that the deliveries of new jets, after bottoming out in 2011,will begin rising again in 2012, starting “another period of expansion.”
“We’ll be bouncing on the bottom till 2012,” Rob Wilson, the president for business and general aviation at Honeywell, said, “but then we’re seeing an overall recovery.” Honeywell bases its forecasts on historical data and on interviews with business jet owners and prospective owners about their plans to replace or buy jets in the next five years.
Zenith Jet, a business aircraft sales company and consultant, predicted in its recent10-year forecast that the “trough” in deliveries would occur this year, rather than next, and that 2011 would “be a transitional year” leading to a sustained period of 9 percent compounded annual growth in the industry.
And Mr. Bolen said that flight hours, a basic measure of overall business jet activity, are up about 13 percent over last year.
In the last two years, I have sometimes gotten on the nerves of people in the industry because I keep pressing them to evaluate the “optics” – that is, how the public perceives chief executives riding on corporate planes when they themselves are languishing in a commercial airport.
Of course, industry executives point out correctly that the economy was the main cause of the setbacks in recent years in business aviation. But adverse public reaction was, and is, a big problem for the industry, at least in the
It is one reason many companies sold corporate planes, contributing to a glut of used jets (which has now shrunk, industry experts say). As the midterm elections approach, woe betide any politician running for office who is discovered taking rides on someone’s private jet.
Even some who continue to use corporate jets regularly try to stay off the public perception radar screen. Last spring, the online investigative journalism site Pro Publica reported an upsurge in use of a previously little-known government program that allows private jet owners, citing security reasons, to block their flight operations from routine public view on aviation-tracking sites like Flight Aware.
Public revulsion about perceived wretched excess caused “a terrible blow to business aviation,” said F. Lee Bailey, the lawyer and a longtime user of private jets. Mr. Bailey, like other proponents of business aviation, argues that abuses are few and that most company plane flights, whether in jets, propeller-driven planes or even helicopters, make good business sense.
Mr. Bolen of the business aviation group said that the argument for business aviation as a tool for better productivity was stronger than ever. Commercial airlines have been cutting not only overall seating capacity, but also entire routes, especially in small and midsize cities where revenue is soft. Business aviation increasingly fills a void for companies that need to send employees on the road in an efficient manner, he said, adding:
“Just over the course of this recession, over 100 communities have lost all, or substantially all, of their commercial airline service.”
http://www.nytimes.com/2010/10/19/business/19road.html?_r=1&ref=business&pagewanted=print