Business Aviation in Hard Times

Business Aviation Headlines.Bombardier Aerospace said business jet cancellations and a difficult economic environment continue to take their toll as the manufacturer reported its second quarter results. The decrease is mainly due to a decrease in manufacturing revenues due to lower deliveries and selling prices for business aircraft. Cancellations for business jets outnumbered new orders, with 80 cancellations and 27 new orders. Increased prices for commercial aircraft partially offset the fall off in the business jet sector. Commercial aircraft deliveries in the quarter increased and in Bombardier’s own particular case, the CSeries aircraft is a cause for optimism longer term, bringing the company up against Boeing and Airbus.Business aviation sees necessity as the mother of invention.Historically, every time the aviation industry has had a downturn, had difficult times, it’s re-invented itself. In the 1960s it was the introduction of the business jet. There were managed aircraft in the 1970s when we had downturns…instead of everybody having their own individual flight department, they went to aircraft management companies. You saw that evolve. In the downturns in the 1990s, you saw fractional ownership come out of that. What will the next invention be? Aviation is an inventive industry, and the goal will always be how to make the product more accessible and more affordable as the world changes.Jet cards have been one of those successful inventions in recent years, which has altered the air charter market once again.People who a year ago would have gone with fractional now want the flexibility or don’t want the capital commitment and the five-year contract and the risk of residual value. Those are the people who today are buying jet cards. A year or two ago, the people who were buying jet cards were new entrants who were frequent charter customers. Small business aviation operators are experiencing an expense spiral, particularly when required to comply with all the regulatory requirements and come up with a profitable venture, a profitable business.The air charter world needs to change. There will continue to be a demand for high-quality business aviation transportation. The airlines are making life more miserable every day, and business needs will continue to require people to be in hard-to-reach destinations where they just can’t get any other way than through business aviation. The best way to access business aviation is via charter, and right now there are plenty of charter airplanes available, and as long as there is a wide variety of good quality aircraft in the market, people are going to continue to charter because they don’t have to make big capital commitments. Charter will be the first part of our overall market to bounce back.After that, the market will gravitate towards first class operators who can demonstrate a real value proposition in providing a higher standard of safety and service quality, multiple locations and worldwide authority, and have systems and procedures in place that add value for the client. An operator with 25 or more aircraft can best cater for a clientele who will want and who will appreciate that highly personalized service that’s delivered with quality and consistency.