Economy and politics top the agenda at NBAA 2008
Ten days after the Dow dropped 787 points in a week, one month from the presidential election, five months before extension of the FAA’s funding expires again and 14 months until a scheduled game-changing UN meeting on the environment, the 61st NBAA Annual Meeting and Convention opened yesterday with the business aviation industry booming, but with attendees looking over their shoulders as they wait apprehensively for the boom to fall.
The news is not all bad, of course. Industry forecasts predict a record number of deliveries this year and maybe even next year, with a slight trough expected in 2010. But at the media breakfast before the Opening General Session, Pete Bunce, president and CEO of the General Aviation Manufacturers Association, said his members are concerned about the credit crunch and are taking a wait-and-see attitude. “Nobody knows quite yet what is happening and companies are now looking for solutions to protect themselves in the future,” he said.
Echoing this thought, NBAA president and CEO Ed Bolen, quoting Yogi Berra, added, “Prediction is very hard, especially about the future.”
Bolen outlined NBAA’s efforts in opposing aviation user fees, and reminded the audience that the fight is not yet over. Unable to come to an agreement on FAA reauthorization by the end of September, Congress approved an extension of the current authorization to the end of March.
“When the new Congress convenes,” Bolen said, “we’ll be starting from scratch. But in some ways we’re ahead of last time. Over the last two years our community has learned how to come together to fight user fees and we’ve found friends outside the industry who help us. We’ve also shifted to a more positive focus. Instead of responding only to the airlines’ strategy of vilifying business aviation, we’re working to make the Next Generation air transportation system a reality based on fuel taxes, not user fees.”
At the same media breakfast, Alan Klapmeier, GAMA chairman and president and CEO of Cirrus, while noting that the credit crunch is a problem for the general economy and for some aircraft sales, said that productivity is the key to turning the economy around and that adding productivity is what business aviation does. “Education is needed in the general media to dispel the myth that general aviation is a perk,” he said. “And personally, I think we should stop using the term ‘private jets.’ That sounds exclusive. We should be using ‘personal jets’ or ‘business jets.’”
Politics took center stage at the Opening General Session after Bolen introduced the nation’s most well-known political couple, Mary Matalin, Republican advisor, and her outspoken Democratic husband, James Carville.
“You better just take care of your industry yourself,” advised Matalin, when the two were asked which presidential candidate would be most beneficial for business aviation. “Whoever gets elected is going to spend the first six months trying to figure out what they’re going to do about the last six,” she said. “The notion that all of a sudden all the lobbyists are going to be gone and it’s all going to be reformed is wrong. It shouldn’t be like that anyway, because people want to be represented. Just keep doing what you’ve been doing. You’re going to have a presence on the Hill and that’s where you need to make your pitch. Maintain your studied neutrality.”
Carville added, “Not knowing the interests of your industry, the candidate that would be most likely to get the fuel prices down would probably be the most beneficial. And until and unless people start paying cash, as opposed to buying everything on credit, the candidate who can unfreeze these credit lines will allow people to start buying more airplanes. Off the top of my head, these are the two things that would help you most: cheap fuel and easy credit.”
Before Matalin and Carville spoke, ICAO president Roberto Kobeh Gonzalez acknowledged business aviation’s important place in the overall aviation industry, mentioning that more than 25,000 turbine-powered aircraft are operated by more than 17,000 companies worldwide and praising the International Business Aviation Council’s work with ICAO. “What might be done for business aviation to continue to grow?” he asked rhetorically, and outlined several “challenges” that ICAO and IBAC are confronting. All are well known–safety, security, airspace and access to airports and the environment.
The latter topic elicited a few sotto voce comments in the audience when Gonzales stated emphatically, “The impact of aviation on the environment is of vital concern to all of us. The fourth report of the Intergovernmental Panel on Climate Change confirms that the change is real and that most of the observed global rise in temperatures since the mid-20th century is very likely due to an increase in greenhouse gas concentration from human activity.” He said that while aircraft today are about 70 percent more fuel efficient than they were 30 years ago and that new models are even more efficient, the problem is growth. “Mid- to long-term projections are for an increase in traffic that would outpace our capacity for bringing down emissions,” he said.
“Our solution lies in the development of a combination of operations and market-based measures under the leadership of ICAO,” Gonzales continued. He said the organization formed a group in 2007 to make recommendations on an aggressive program of action regarding aviation and climate change. These recommendations will be reviewed at a high-level ICAO meeting early next year in time to be considered by the United Nation’s Framework on Climate Change meeting in December that same year.