Monday, July 21, 2008
Business jets are all the rage among the aviation cognoscenti. The most sanguine analysts predict that the next 20 years will witness demand for 23,000 new corporate jet aircraft, from Very Light Jets (VLJs) through business jetliners. At Farnborough, Cessna announced that it expects its European Citation fleet to surpass 1,000, although its VLJ Mustang is just approaching its 100th delivery. (See related story in this issue.) There are now more than 900 Citations on the Continent. At a press conference, Cessna chief Jack Pelton said he expects his company to add 100-125 Citations each year for the next two or three years.
At the same time, Eclipse Aviation let it be known at the show that the European regulatory body EASA is easing up its pressure on the Eclipse 500 VLJ. Indeed, there’s every indication that EASA will give the aircraft its certification by the end of 2008.
Maintaining a high profile at the show is Japan’s Mitsubishi Heavy Industries and its 70- to 90-seat regional jet, the MRJ. Likewise, Honda is shining a spotlight on its HondaJet, an aircraft it’s targeting toward the growing VLJ market, which the company estimates now encompasses 1,000 aircraft. Honda will produce 100 HondaJets a year starting in 2012.
However, someone influential begs to differ with the conventional cheerleading over business jets. At the show, I spoke with Richard Aboulafia, vice president of analysis at Teal Group, an aviation consultancy in Fairfax, Virginia.
Aboulafia forecast deliveries by 2018 of 3,365 VLJs, with 1,385 Cessna Citation Mustangs, 925 Embraer Phenom 100s, and 1,055 spread among other makes and models, such as the Eclipse 500. He noted that Eclipse may be selling aircraft, but its “burning cash”. He says Eclipse isn’t alone and labeled a lot of pro-VLJ rhetoric as “quixotic”. He also noted that, while Embraer is now successful, the company was a “cash devouring horror” for 30 years before it righted itself.
Bruce Maxwell, president, Luma Technologies, maker of aircraft illumination products, such as LED annunciators and anti-collision lights, casts a positive spin on the bizjet market, saying the air congestion and certification concerns will soon fall by the wayside. He also noted that while the aviation industry is in crisis for some players, for others conditions are favorable.
“There will be a huge crisis for the OEMs, because of recession and high oil prices,” he told me. “I mean, just huge. However, look at it another way. More and more, people will recognize that they can’t afford a new aircraft and instead they will update and refurbish what they have. So, for me, the crisis will be that I can’t keep up with demand.”