Eighteen months ago, the business aviation industry was happily floating in a sea of black ink. Now, a year-and-a-half later, it’s drowning in red ink. And it’s debatable whether the end of the economic recession is in sight or whether it’s a good idea to hang onto the life preservers just a little longer.
The August 13 to 15 Latin American Business Aviation Conference & Exhibition (Labace) featured 110 exhibitors, 22 more than in 2008, and more than 60 aircraft in the static display, compared with 48 the previous year, underscoring evidence that the economies in Latin America, and Brazil’s in particular, appear stable and even growing.
Aircraft manufacturers last year were struggling to build their service networks and capabilities to help a growing number of operators worldwide keep their aircraft flying safely and efficiently. Order backlogs were at record highs and manufacturing and product support resources were stretching thin.
Jet Aviation president Peter Edwards said it’s still too early “to call the market bottom,” but he pointed to positive signs emanating from nearly all corners of the industry as an indicator that perhaps the worst of the economic downturn is over.
Hawker Beechcraft this morning reported $537.6 million in net sales in the first quarter, a decrease of $38.9 million from the year-ago time frame, but net after-tax income increased to $66.9 million, compared with a net after-tax loss of $31.3 million in the first three months of last year.
Is the light at the end of the tunnel of our economic crisis a reality, or merely the triumph of wishful thinking over reality?
Even as Congress haggles over the details of an $800 billion economic stimulus plan there are some signs of movement in a positive direction within the business aviation industry.
Despite Hawker Beechcraft announcement earlier this month that it is to lay off 5 percent of its workforce in the face of the global economic slowdown, executives with the U.S. manufacturer here at the MEBA show say the Middle East remains one of the few remaining bright spots for airplane sales. This is why it recently opened a new sales office in Dubai.
Over the past few years executive charter brokers complained that there were not enough suitable aircraft available in the Middle East to meet the spiraling demand for private flying. But with each passing month, more new jets are flocking to this part of the world, boosting the fleets of local operators and correcting the supply/demand imbalance.
The latest fleet data from UK-based consultancy Ascend clearly charts the impressive growth in Middle Eastern business aviation over the past few years. The number of business jets registered in Middle East countries has increased by almost 71 percent in the 10 years since October 1998, rising from 120 to 205 (see Fleet Growth chart below).