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Friday, January 1, 2010

Business Climb-Out

After freefalling in 2009, the business aviation sector is faced with another difficult year before an expected recovery begins in 2011

Emily Feliz

Last year was one of the worst years in recent memory for business aviation, leaving suppliers and manufacturers hopeful the bottom has been reached. However, even the most optimistic of forecasts predicts a soft business aviation market in 2010 and beyond.

The symptoms of the global recession are evident throughout the business aviation sector; airframers, avionics manufacturers and other companies have experienced cancelled or delayed orders, shrinking backlogs, lower profits and layoffs. The National Business Aviation Association (NBAA) annual convention and exhibition in October in Orlando, Fla., was decidedly downbeat as splashy product announcements and elaborate displays were supplanted by empty booth space and lower foot traffic.

On the eve of NBAA, Honeywell released its bellwether business aviation forecast, which revealed what many in the sector already knew — business aviation is facing a steep climb back to the peak delivery levels of 2008. According to the forecast, the sector won’t begin to see recovery until 2011, and it will be 2017 before deliveries rebound to the 2008 benchmark.

Through the third quarter of 2009, business jet deliveries were down 25 percent from the previous year, representing a 24 percent decrease in constant 2009 dollars. Looking forward, Honeywell forecasts deliveries will continue to drop off in 2010 before climbing in 2011. Peak-to-trough decline (2008 to 2010) will be in the range of 40 percent or more, according to the forecast.

There is a bright side, according to Rob Wilson, president of Honeywell business and general aviation. The forecast points to stabilization in fleet utilization and used aircraft; net new jet orders are expected to be positive in 2010 and 2011; and 40 percent of survey respondents planned to buy a business jet in the next five years.

"It really isn’t all bleak," Wilson said. "There’s strong belief by the customer base that business aviation is something they’re going to continue invest in."

Also, demand outside of North America is forecast to be stronger, according to Honeywell.

"The relatively stronger levels and timing of international purchase plans suggests that pent-up demand will improve both order intake and new jet delivery rates by 2011-2012, similar to what the industry experienced in the last cycle," Wilson said. "Despite some program cancellations and delays, there is still a solid pipeline of new, high-value models supporting long-term growth and our survey indicates that international demand will remain significant."

Not all industry analysts are optimistic about a near-term recovery. Speaking Oct. 27 during an Aviation Today Webinar, "Business Jets: Separating the Reality From the Hype," Brian Foley, president of Brian Foley Associates, of Sparta, N.J., questioned the timing and strength of any recovery. (To hear an archived version of the discussion, visit www.aviationtoday.com/webinars.)

"In the next 10 years we don’t even see (business jet) deliveries coming back to 2008 levels," Foley said. "The business aviation industry is a fairly young industry.... We’ve been blessed that after every trough we hit a new peak, but is that sustainable?"

Business jet manufacturers were particularly hard hit in 2009, with customers walking away from deposits, backlogs shrinking and used aircraft inventories growing. The conditions forced Cessna to cancel its large-cabin Citation Columbus development, a jet that was to be equipped with the Rockwell Collins Pro Line Fusion avionics suite.

Jack Pelton, Cessna chairman, president and CEO, described 2009 as "brutal," but added "we think the worst is behind us. We’re seeing the tide turning slower than we would have liked," but "people are back flying again. Phones are starting to ring, which is good news for aircraft order intake."

Certification and customer deliveries are expected for some new airframes in 2010, including the Cessna Citation CJ4 with Rockwell Collins Pro Line 21 suite and large-cabin Embraer Legacy 650, equipped with Honeywell Primus Elite avionics, both in the second half of the year. Embraer provided some excitement at NBAA last October by revealing the Legacy 650, a longer range version of the super midsize Legacy 600 that first flew Sept. 23 in Brazil. The Gulfstream G650 is moving forward with its flight test program as well; the ultra-long-range aircraft achieved its first flight in November 2009.

For avionics OEMs the economic downturn provides an opportunity to invest in current products, adding new capabilities and new airframe applications.

"Successful companies are the ones that continue to be innovative despite the downturn," said Esterline CMC Electronics President Greg Yeldon. In recent months, CMC’s GPS product line was FAA-certified for stand-alone approach operations. Its PilotView electronic flight bag received European certification for the Dassault Falcon 7X business jet.

Among other avionics developments announced at NBAA:

  • Rockwell Collins announced five new updates to its Pro Line 21 avionics retrofit package for Dassault Falcon 50s, including expanded XM Satellite weather capabilities, three engine indicator monitors and Automatic Dependent Surveillance-Broadcast (ADS-B) Out capable transponders. Also, Rockwell Collins now offers a Pro Line 4 to Pro Line 21 display upgrade for Dassault Falcon 2000s.

  • Honeywell unveiled its Certification Foxtrot upgrade to Gulfstream business jets equipped with the PlaneView flight deck. FAA approved Foxtrot, the sixth upgrade to PlaneView, in September.

    The Gulfstream Synthetic Vision-Primary Flight Display, based on Honeywell’s "SmartView" system, is upgraded to the 2.0 version. Other improvements include WAAS-LPV and Required Navigation Performance (RNP) 0.1 capability; FANS 1/A datalink and v7.1 flight management system.

    Honeywell also announced certification flight testing of the EASy Phase II cockpit with synthetic vision on the Dassault Falcon 900EX. The upgraded suite includes SmartView, WAAS-LPV navigation, ADS-B Out transponder, Automatic Descent Mode and paperless charts.

    Honeywell is flight testing an improvement to its Primus Epic suite that merges SmartView with an infrared camera input to provide a head-down view of the environment outside the aircraft.

  • Innovative Solutions & Support, of Exton, Pa., said it is seeing strong aircraft OEM support of its Vantage Cockpit/IP system. In October, Cessna was awarded a supplemental type certificate for the system, called "AdViz" in Cessna aircraft, for retrofit on legacy Citation jets.

    Dassault Falcon Jet, meanwhile, selected IS&S to provide flat-panel displays as part of a Falcon 2000 upgrade.

  • Emteq, New Berlin, Wis., announced the selection of its SkyPro Cabin Management System for the new HondaJet. The system includes touchscreen monitors, audio/video on demand, moving map, exterior camera and cabin control.

  • Garmin introduced the G3000, an integrated avionics suite designed for Part 23 light turbine aircraft. The suite will feature 5.7-inch, touchscreen LCD displays, part of the GTC 570 vehicle management system. The console-mounted GTC 570 allows for radio management, audio management, flight management, weather systems management, synoptics, and other systems, Garmin said. Piper Aircraft is the launch customer.

Connectivity Focus

Despite the lagging economy, outfitting business aircraft for in-flight voice and data capabilities is a welcome growth area. Customers continue to demand these capabilities and are willing to spend money to install the equipment, suppliers say.

Communications system providers including ICG, EMS SkyConnect and Panasonic Avionics announced new Inmarsat and/or Iridium satcom systems at NBAA. And Aircell, of Broomfield, Colo., signed an agreement with fractional ownership company Flight Options, of Cleveland, to install its High Speed Internet system on the majority of the company’s fleet of 110 business aircraft, including new Embraer Phenom 300 light jets.

John Wade, Aircell senior vice president and general manager of Business Aviation Services, said connectivity has "changed the way people spend their time in the air." Wade said he sees the growth rate and adoption rate of these technologies increasing in 2010. This is just the beginning of broadband expansion in the industry, he added.

"The economy is probably slowing it down a bit, but connectivity is the counter story in this down economy," Wade said. Aircell is "shipping units as fast as we can make them.... If this is what a down economy looks like, we’ve got some exciting times ahead."

Panasonic Avionics, of Lake Forest, Calif., is entering the high end of business aviation by installing its Global Communications Suite (GCS) on a Boeing Business Jet. The company in October said it had agreements with three customers for 14 aircraft.

David Bruner, vice president of Global Communications Services, said the company was in discussions with other potential customers who operate aircraft including the Airbus Corporate Jet, Embraer 135 and Boeing 747 and 777.

"Office-in-the-sky has never really achieved its promise," Bruner said. "The importance of this system is that it delivers that type of [desired] bandwidth."

EMS SkyConnect, of Takoma Park, Md., a division of EMS Technologies, introduced the Forte AirMail Communication System, which uses the Iridium satellite network to provide e-mail service for WiFi-enabled smartphones, iPhones and BlackBerries. The system is priced at $25,995, including WiFi interface, Iridium transceiver and antenna.

Wiley Loughran, EMS SkyConnect vice president of sales, said Forte AirMail is the first system of its kind in the marketplace. "We’ve had up to 10 users sending and receiving e-mails using the Iridium system and it was almost in real-time," he told Avionics Magazine.

ICG, of Newport News, Va., unveiled "Sora," for the Japanese word to fly, a system combining its own ICS 220A Iridium satcom system with the Cobham SDU 7320 SwiftBroadband terminal and IGA 5001 intermediate-gain antenna. The systems are linked by ICG’s NxtMail server. Sora provides global voice and data capabilities, weighs less than 39 pounds and comes with a suggested retail price of $164,500.

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