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We all remember it. Fortune 500 company CEOs sitting before the US Congress and being beaten up for planning or purchasing new business jets. Jetting the world in a private jet used to be “cool”. It was a thing to which many aspired. Then almost overnight a private jet became a symbol of wretched excess, capitalism run amok. Jets used to be seen as time savers, technology which brought efficiency and synergy to business. Now, suddenly, a private jet is a thing to be decried as contributing to global warming, the failure of our economy and possibly capitalism itself. Wow!
So, is the business jet dead, a relic of a more prosperous and selfish time? Absolutely NOT. A recent article in Aviation Business explains that business jet inventories are back to their lowest levels since 2008. Businesses and individuals are buying up pre-owned jets and taking advantage of lower prices to upgrade their fleets. Although prices of some models have begun to rebound there are still outstanding deals to be had on older business jets and some newer models are poised for a rebound in prices. One sign of possible price recovery is that dealers are beginning to use their own cash on speculative deals.
A growing concern over economic conditions in Europe may still undo some market improvements gained over the past 18 months. As Europe has been buying aircraft steadily over the past few years, a severe downturn would pose a threat of still more aircraft being dumped onto the market.
Still, the downside risk has been minimized when you consider that the business jet market that has already seen prices drop 50 percent and depending on model type/value, many prices are 10 to 20 percent below that. Short of a global crisis which would make aircraft ownership completely out of the picture, it’s unlikely to see another price drop of 30 to 50 percent.
Beyond the pure economics of the thing, the aviation community is not sitting still and taking it on the chin as in the past. Since that dark day in November 2008 when three top auto industry executives sat before Congress and were chastised for flying to Washington to ask for a bail out, business aviation leaders have been fighting back. The stereotype of private aviation as expensive, wasteful and elitist had to be addressed.
Within months, pilots, aircraft owners and plane manufacturers had organized around a new leader at a top trade group with an extensive government background and a new congressional caucus. Two other trade groups published a new business aviation survey, showing that most business flights ferried technical, sales or service staff or middle managers with only 22% of business aircraft passengers being top management. The survey also found most companies operating business aircraft have less than 500 employees and that 80% of flights are to airports with inadequate or no airline service.
Industry advocates knew they had work to do to make a positive impression in Washington, but they also knew they had plenty of allies in both parties. Organizing a General Aviation Caucus in both the House and the Senate brought together the strongest elected voices supporting business aviation.
Rep. Allen Boyd, D-Fla., helped found the House caucus last year and wants to be sure the government keeps private flying safe and accessible. “As a pilot myself, I know that I appreciate easy access to general aviation airports,” he said.
Craig Fuller, who became president of the largest aviation group in the world, the Aircraft Owners and Pilots Association, in January 2009, brings decades of public policy experience to the task of advocating for general aviation. Fuller, who has been flying since he was 16 and served in the first Bush administration, had this to say in an interview with Forbes. “We want the government to continue to allow us the freedom to fly. That means, not over regulating or over taxing to the point when people can’t afford to do it.”
The business jet is down, but not dead and like many of the freedoms Americans have been able to take for granted in the past, business travel and private aircraft ownership are in for a fight.
Filed under: Business Aviation |