Monday, October 1, 2012
Editor's Note: Eyes on Orlando
The collective eyes of the business aviation industry will be laser-focused on Orlando, Fla., later this month for the National Business Aviation Association’s (NBAA) annual meeting and convention, hoping to take a pulse of the current market conditions and gain insight into the future.
You could make the case that the business aviation segment has been hit hardest by the economic downturn. (After all, the military will always gets its funding and the commercial airlines will always find ways to make an extra dollar, even in the harshest of economic recessions.) But for business aviation, operators can, and have very often in recent years, put off those cabin or cockpit upgrades or delayed the purchase of a new aircraft, which has collectively dampened the business aviation climate. Add to that the bad press business aviation suffered a few years ago and it’s been a rough few years for this segment of aviation.
However, industry insiders believe 2012 will finally be the year when the tide turns, with declines becoming increases, albeit very small ones. Business aviation airframe manufacturers and suppliers, more specifically avionics suppliers, seem to be slightly bullish on this industry heading into the industry’s bellweather event in Orlando. (The event will take place Oct. 30 to Nov. 1, and Honeywell will release its highly anticipated business aviation forecast on Oct. 28, the eve of the NBAA conference.) Last year, Honeywell’s forecast predicted some optimism in the coming years, reporting roughly 80 percent of planned purchases were timed for 2013 or after.
I’m not an economist, or a fortune-teller for that matter, but this year has cruised along without any catastrophic economic collapse or highly robust economic boost. I’ll leave the crystal ball gazing and tea-leaf analyzing to the experts; at least so far, it appears economists this year are expressing much of the same thoughts as they were 12 months ago.
Business aviation industry insiders believe 2012 will finally be the year when the tide turns, with declines becoming increases, albeit very small ones.
“While the business aviation market continues to recover, current market indicators are mixed. Market confidence needs to be fully restored for industry business jet deliveries to increase strongly and enable the industry to realize its full potential. Deliveries are expected to lag order intake as manufacturers strive to maintain acceptable backlog levels, and business jet industry deliveries for 2012 are expected to be comparable to 2011. Bombardier believes business jet industry deliveries will return to sustained growth starting in 2013, with the large aircraft category demonstrating the fastest growth,” Bombardier said in its annual report released in June.
But, at the same time, there are a number of new aircraft launches that have occurred this year, and many new aircraft that are expected to enter service in the coming years, providing some room for optimism and excitement. Among the notable product launches coming up: the launches of the Learjet 70 and 75 and Cessna’s long-range Citation Longitude and midsize Citation Latitude; the Gulfstream super-midsized G280, which will be delivered to the first customer by year’s end; the Gulfstream ultra-large-cabin, ultra-long-range G650 is closing in on FAA entry-into-service later this year; and on the small end of the business jet category, Eclipse 550 is returning to the field, following a bankruptcy and subsequent production stoppage. ( To hear from the Eclipse CEO on the new aircraft and the state of light-jet category, see our story on pg. 6.)
“It’s becoming clear that business jet manufacturers are increasingly competing on price, due to a long-term market down cycle,” said Richard Aboulafia, vice president of analysis at The Teal Group. “They also help speed new model introductions, which manufacturers need to stimulate demand.” (For more on business aviation avionics, see pg. 10.)
Stay tuned to Avionics Magazine and www.avionicstoday.com for all the news that will come out of NBAA. (And be sure to follow us on Twitter for real-time updates @AvionicsMag and @EmilyFeliz1.)