NEXA Capital’s Michael Dyment discusses business aircraft financing in a tough market.

Steve Santos, president of Avantair took delivery of three Piaggio Avantis at the show bringing his fleet to 55 aircraft. Avantair has bucked the fractional market trend by growing 80% in the last year.

It’s Thursday at NBAA 2009. I’m not going to lie. This is the slowest I’ve ever seen the floor in 15 years of coming to this show and attendance is reportedly down 22 percent as compared to last year. However, in spite of that, the mood continues to be somewhat upbeat. Exhibitors have said that business is happening and the attendees showing up at their booths are serious customers. Few aircraft orders have been announced, obviously, but business partnerships and alliances have been announced. The best news coming out of the show is that companies are focusing on creating strong customer support programs to service their existing customers as they weather the downturn.

For example, Cessna’s Mark Paolucci brought the most energy to the Cessna press conference Monday when he announced the Service Direct program saying, “I think this is the most important announcement that will be made at NBAA.” Judging by the lack of big news or any other news to come during the day today, I think he was right. The Service Direct program is designed to bring the service and support of Cessna to the customer’s own hangar. Appointments can be scheduled at their location. See video for Paolucci’s description of this “paradigm shift” in the thinking of product support.

Dassault Falcon introduced their e-Maintenance program and demonstrated this remarkable system at their annual breakfast yesterday morning. A technician here in Orlando was able to command the movement of the throttles of a 7X in a hangar in France as part of that troubleshooting demo. Dassault says this system will allow for better planning for parts and for assisting with troubleshooting.

Gulfstream’s Mark Burns talked about getting face-to-face with customers more. He also pointed to new parts warehouses in Madrid and Sao Paolo as an area they have focused on for improvement, as well as their 3200 product support employees, 11 company owned service centers, 20 approved service centers and 15 parts warehouses. “We continue to work the synergies” of their acquisition of Jet Aviation facilities across the world, he added.

Collaborations, alliances or whatever you want to call them were also a trend at this most unique NBAA. For example, JSSI announced a collaboration with Duncan Aviation. A similar agreement has been in place with StandardAero since the summer. See video of Lou Seno, president and CEO and George Cleros, vp technical services.

Hot products were also being announced. EMS Sky Connect announced their solution for receiving in-air email via smart phones, iPhones and BlackBerry’s through their Forte AirMail service using the Iridium network. Priced at $25,995 including WiFi interface, Iridium transceiver and antenna, Wiley Loughran said, “Providing affordable in-air e-mail is one more way we can help our customers succeed.” The system is ready to ship through their dealer network immediately.

Another hot topic across the board was the impact on aviation to the environment. A well-attended seminar called “European Union Emission Trading Scheme Principles, Compliance and Impact” filled a large meeting room to capacity and ran so long the next scheduled meeting had to find another available room. Cessna also introduced their GreenTrak Flight Planning software, a new flight planning program for current production Citation operators that optimizes a flight profile for time, cost and lowest carbon footprint as well. “Our system uses a principle similar to cost indexing programs used by many airlines, but is unique to general aviation operations,” Cessna’s Paolucci said. “GreenTrak is an immediate solution for lowering operating costs and emissions. We know our customers are counting on their aircraft to help them grow their business, to help the global economy rebound, and GreenTrak will support them across the operational spectrum,” he added. Jeppesen is celebrating their 75^th anniversary in the aviation industry. Steve Card and Rick Helibrock said they are emphasizing safety, efficiency and environment. One way they are trying to help the environment is by reducing the number of pages of paper they ship every year. They are down to one billion pieces of paper per year and working at further reductions.

NBAA also sponsored a seminar on the use of social media. This seminar was also well-attended with standing room only left in the room. Patrick Dunne, manager of communications for NBAA was among the panel members who also included Ryan Keough, manager of marketing and communications at Cutter Aviation and blogging queen Benet Wilson, Aviation Week’s online managing editor-business. NBAA has really embraced the social media realm in the last year hoping to use these media to help combat the negative image of corporate aviation after the Big Three Fiasco last year. Lots of great info and tips were exchanged in a truly interactive forum. Many companies are embracing these social media for their ability to reach wider and wider horizons. Dassault has e-forums that have interactive, live chat features, for example, in their product support portfolio.

Almost without exception, companies, their leaders and spokespeople said that it will take time for the market to recover. Will there ever be a boom time like we saw in the 2002-2008 time frame. Not likely. But if we look across the board at different sectors in the economy—the auto industry, housing, banking, aviation—we see that many things will have to improve before recovery will take hold and growth can happen. Smart companies talked about positioning themselves for the future recovery. As the Honeywell Forecast showed, three to five years out, the industry may begin to see order intake climbing. This is where patience comes in.

One minor incident will stay with me when I think of this year’s NBAA event. At one point I saw Cessna CEO Jack Pelton come out of a meeting room alone. He didn’t have his usual entourage with him. He looked left and he looked right. He started walking alone down a corridor. He was searching for something or someone. But after a time he turned and walked the other way. Without their usual massive booth to go to and no handlers to point him in the right direction, he looked lost. That moment will forever exemplify the 2009 NBAA Convention for me.

I arrived at the broad, empty parking lot of the Orange County Convention Center at 6:40 am on the opening day of the National Business Aircraft Association Convention yesterday.  It had been a short drive but I heard that tell-tale waffling sound of a bad tire and emerged to find, indeed, I had a flat.

I rolled my eyes. “This is not a good sign,” I thought as I reminded myself of roll with the punches.

I’d spent the day before sitting through an endless litany of press conferences where OEMs tried to put a brave face on the state of the industry but succeeded very quickly in setting the tone of the meeting.  The steady diet of diminished expectations was punctuated only once – by Embrear’s announcement of a new program, the Legacy 650 www.aviationtoday.com/nbaa09/35974.html. As the press corps perked up, asking excited questions, the conference, suddenly seemed to hold an echo of the old days and a hint of promise to come, however far in the future they may be. But, by the end of the day, the press had come to its own conclusion. “It’s so quiet,” one veteran aviation reporter whispered to me as I hammered out my copy.

Monday had been a “good news, bad news” kind of a day. To an OEM, we’d reached bottom and they were seeing green shoots. The record inventories of used aircraft, built as the industry shed capacity just as the airlines had done, were declining. But the used backlog, which had decimated new sales, had only declined by 200 from the 1,000+ parked units, reflecting the long road ahead.

Indeed, that was the bad news – we have a long way to go. In the meantime, the industry is concentrating on improving their products and streamlining the company and production, with an emphasis on product support. Two announced they would be the only manufacturer to take product support to the customer, dispatching AOG go teams of mechanics and parts to fix any problem, any time, any where. Clearly they were hoping on the up sell for revenues – getting customers to convert to these programs, just as the airlines are  rolling out fees to gain ancillary revenues.

While most OEMs paid obeisance to the “crisis,” one reflected how the industry has felt over the last year as the slings and arrows of outrageous fortunes were constantly lobbed over the fortifications. In the most creative and clever press conference, Hawker Beechcraft’s execs, clad in black military jumpsuits, cast this year’s very first conference as a military mission. CEO Bill Boisture was frank. “We are at war but is a war we are gonna win,” he said. The reaction of one reporter? That the industry and the company was incredibly defensive. Turns out, the reporter was from Asia and had likely not experienced the industry’s year-long sentence in the pillory.

As I walked through the eerily empty exhibit halls on my way to the opening press breakfast, I couldn’t help reflecting on the past 24 hours. “It’s so quiet,” I thought. The long walk as I traversed the hall made me realize just how symbolic both the flat tire and the quiet were.

General Aviation Manufacturers Association President Pete Bunce and National Business Aircraft Association President Ed Bolen seemed to agree with Hawker Beechcraft assessment of the last year as a war of attrition as the industry endured wave after wave of vicious attacks. It was a time when no aircraft owner or operator would be caught dead defending business aircraft.

They indicated public sentiment against the industry has abated and they had made progress both in the halls of Congress and in the White House that attacks on the industry directly resulted in the loss of jobs on Main Street. Not so fast I would learned later that night as a new volley arched its way toward Orlando.

Bunce, however, indicated something far more telling and ominous to the industry. When he met with White House staffers explaining political cheap shots taken by Washington – and the White House – meant the loss of hundreds of thousands of jobs, he said staffers where none too pleased with the industry’s criticisms of President Obama’s sentiments.

I thought this reaction to the industry’s message stunning. After all, the industry could easily respond, “likewise, I’m sure” and I hope it did.

Bolen and Bunce reported CEO’s and governors were suddenly coming out of the woodwork in defense of biz aircraft. Indeed, both Cessna and HBC press conferences stressed the role of biz av in the economy and corporate success. While in the Hawker Beechcraft briefing, Boisture pointed to the weapons in his arsenal as a wide range of aircraft, GAMA and NBAA pointed to a series of commercials with CEO’s linking business aircraft to corporate success set to air shortly in Washington.

They also pointed to the release of two recent studies – NEXA Advisors’ www.aviationtoday.com/nbaa09/35406.html confirmation that corporate aircraft users send far more money to the bottom line, to employees and to shareholders than non users. The second study, released by Harris Interactive recounts the specific economic value business aviation brings to the market on a state-by-state basis. www.aviationtoday.com/nbaa09/35504.html

Yesterday, the two associations added to their arsenal, unveiling a new E-valuation tool www.noplanenogain.org/Introduction.htm?m=60&s=450 for use by corporations in analyzing the impact of their flight operations on the bottom line. The tool helps quantify and communicate what business aviation is all about. E-valuation comes a week after Guardian Jet unveiled its own evaluation tool, called Guardian 20/20 www.aviationtoday.com/nbaa09/35916.html. Of course, No Plane, No Gain’s site, with its five tutorials on how to do it yourself is free. And that’s what the two associations want — for operators to do it themselves with every chamber of commerce and local newspaper in the country.

There seemed to be reason for cautious hope as I left the breakfast, at least on the industry image front. The tools were in place although they were long overdue and should have been developed long ago in response to the airline industry’s attack on business and general aviation. “Remember Aunt Edna,” asked Bunce at breakfast.

“Yeah,” I thought ruefully for the thousandth time since she appeared to develop the caricature that became the face of corporate aviation and offered up the launching pad for the industry attacks of the past year. “You guys should have had No Plane, No Gain before the airlines had their say years ago,” I thought again. And the associations would not disagree, according to user sentiments expressed here. That’s what gets me angry about most communications departments. They are largely reactionary rather than tactical except when they want something from Washington as in the case of Aunt Edna or Harry and Louise of the early ’90s health care debate.

Not that the airlines are any better, given the fact they have remained silent in the face of the customer service issues that have ground on for years. Business executives long ago drew their own conclusions about the impact of delays and cabins that treated passengers more like sardines, developing the unprecedented explosion in business aviation in the first place. Failure to prepare for such negative press whether it is commercial or business aviation just means you lose the battle and protract the war. Especially since the battle is still on with the airline-backed effort to discredit federal dollars to smaller airports such as the recent USA Today articles which Bunce said was orchestrated by the Air Transport Association.

Geico came to my rescue with the car, sending someone to change the tire leaving me free to make these pontifications. As I approached the car last night, I thought. “Yep, the industry is just like this car, riding along on a wonky, tiny tire that will do the job but is far from secure. Well, at least they have the wonky tire.”

As I settled in, however, to watch the news last night, I spotted biz jet b-roll on the lead in on CNN. I figured it would be about the convention. Afte all MSNBC had been doing an incredible job of explaining the rest of business aviation’s story which Aviaton Today’s microsite linked to yesterday in the news feed.

No such luck. Anderson Cooper was covering a new report on executive aviation which showed that perks, chiefly corporate aviation, replaced bonuses at the bailed-out banks.The top three transgressors hailed from GMAC, CIT Group and, of course, Bank of America, but the point he was making was that the overblown compensation they received included the use of corporate jets which accounted for the vast majority of their perks. The segment went on for more than 20 minutes with the words corporate or business jets being much of the focus.

“Nope,” I thought. “The industry’s tire is still flat but at least it has its arsenal ready so that it can roll out and install that wonky tire.” And, oh, by the way, remind yourselves to roll with the punches.

As I listen to some attendees at NBAA this year assert their faith that the business aviation market will improve “in the long run,” I’m reminded of an infamous quote from the economist John Maynard Keynes: “The long run is a misleading guide to current affairs. In the long run we are all dead.”

Make no mistake about it, this year’s show in Orlando is slower and gloomier than those in recent years. From my conversations with attendees at the Orange County Convention Center, a common denominator emerged: anxiety.

“This NBAA is the slowest I’ve ever seen for this show, and I’ve been coming to it since 1984,” said Clifton Stroud, principal, Aviation Marketing Communications, based in The Plains, Virginia. “But I think we’ve bottomed out. Used business aircraft inventory has stabilized, as have prices. Also, flight hours in business aviation are up — they’re higher right now than they were a year ago during this period. So, business aviation is improving over the long run, but it will be a slow climb.”

Ron Jackson, president, The Jackson Group, aviation consultants in Lindale, Texas, was less upbeat. “Sure, this show is slow, but I think 2010 will be even worse, frankly. We haven’t hit bottom yet. That said, layoffs have positioned the industry for recovery. You should keep some perspective. Conditions were even worse during the recession of 1973-74 and the 1979 oil embargo. I remember all of those aviation engineers getting thrown out of work during the early Seventies.”

Honeywell’s 2009 Outlook for Business Jet Deliveries is the “gold standard” of prognostication at this show. This time around, the Outlook was gloomy about the short term and optimistic about (you guessed it)…the long run. Honeywell’s crystal ball predicts that business jet deliveries will fall off a cliff in coming months but gradually return to the peak levels achieved last year.

Bob Trevelyan, vice president, sales and marketing at ATP, a maker of aviation software solutions in Brisbane, California, said that concerns about safety trumped economic woes at the show.

“(There is) a spotlight on the need for a holistic view of safety in business aviation,” he said. “What I’m seeing at NBAA is that a lot of people are confused about Safety Management Systems, or SMS, and how to properly implement them. We’re trying to teach people here that safety is not a one-size-fits-all solution that’s simply grafted wholesale onto an organization. It must be tailored to the particular needs of that group.”

Trevelyan noted that accurate, timely and relevant documentation is key in this regard. “Just as aircraft technical specifications must precisely reflect the actual configuration of the aircraft to be effective for troubleshooting problems and identifying opportunities for enhancing performance, an air carrier’s manuals must represent the real world processes performed by the air carrier,” he said.

Aviation Today recently produced a webinar on this topic, called: “Part 135 Operations: How to Handle the New Pressures,” which aired live on September 29. The event was recorded and archived and is available for registration by clicking here. The webinar delved into SMS and the various challenges that Part 135 operators now face.

Richard Aboulafia, vice president of analysis at Teal Group, an aviation consultancy in Fairfax, Virginia, also played the role of Cassandra. Teal’s most recent annual 10-year forecast for global business aircraft illustrates the severity and swiftness of the slump. The forecast predicts deliveries of 12,678 business aircraft, valued at $195.7 billion, in the decade through 2018. A year ago, Teal predicted deliveries of 18,401 aircraft, valued at $270.6 billion, in the decade to 2017.

Excluding turboprop planes, Teal sees 9,875 business and private jet deliveries in the 10-year period, down from 14,289 a year earlier. Aboulafia foresees “continued challenges for business aviation” through 2012, before growth returns.

Aviation Today is producing a webinar focused on the bizjet sector, called: “Business Jets: Separating the Reality from the Hype,” scheduled for October 27. Register here.

Among those at NBAA attempting to gauge the economic health of the business aviation sector, uncertainty and pessimism reign. Small wonder that economics is known as the “dismal science.”