Despite recording its fourth straight year of increasing industry billings, the General Aviation Manufacturers Association says the coming year remains a question mark due to the "giant thunderstorm" caused by the deteriorating economic environment and public perception issues.
Worst hit last year in terms of volume was the piston aircraft market, where shipments declined more than 20%, although revenue increased 5% to $945 million.
Best performing was the turboprop niche, with 535 deliveries generating $1.9 billion in billings, increases of 17% and 23%, respectively, compared with 2007.
Business jet deliveries increased almost 16%, from 1,138 to 1,315, with an associated 13% increase in revenue to $21.9 billion. Last year also saw the continuation of a trend toward an increasing percentage of total deliveries going outside the USA, primarily fuelled by business jet sales, says GAMA chairman and Jeppesen president and chief executive Mark Van Tine.
In 2008, 26% of business jet deliveries went to Europe, 9% to Latin America, 6% to Middle East and Africa, and 5% to the Asia-Pacific region. The USA accounted for 54% of business jet deliveries.
Not surprisingly, manufacturers are expecting a difficult 2009 as order numbers have declined and employees have been laid off. For GAMA's 65 member companies as a whole, there was a 2.8% drop in employment in 2008. Job cuts in early 2009 have been more severe, with Bombardier, Cessna and Hawker Beechcraft planning to release as many as one-third of their production workers, in some cases by year's end.
Van Tine says that although companies have "skilfully" managed the record backlog gained in better economic climes of the past few years, "sustaining orders has become increasingly difficult for sales forces".
Working with other advocacy groups, GAMA is moving forward with initiatives to boost the potential for sales this year, buffering the likely continued decline of general aviation in light of expectations that the global economic growth in 2009 will be the lowest in 60 years.
Included is a bonus depreciation provision in the Obama administration's $800 billion economic stimulus bill signed on 17 February. The law will allows owners of new aircraft used for business purposes to write off 50% of the purchase price during the first year of ownership, a time-limited offer the US Congress had previously used to help with the post-2001 downturn.
Sales have also been hindered by a negative public perception of corporate aviation generated by a public and political backlash over US automaker chief executives flying to Washington in corporate jets to asked for federal bail-out money last year. In a marketing blitz called "No Plane, No Gain", GAMA and the National Business Aviation Association will attempt to re-introduce policy makers and the public to the virtues of business aviation as an economic engine, in part through web-based presentations called webinars. GAMA chief executive Peter Bunce says the general aviation industry accounts for 11 million jobs and represents 5.6% of the gross domestic product of the USA.
GAMA also continues to engage the US Transportation Security Administration over proposed new large aircraft security rules that Bunce says will further economically embattle operators of more than 10,000 aircraft in the USA. The TSA recently held five public meetings on the plan, with "not a single positive comment" emerging, says Bunce, adding that the one-size-fits-all approach the agency wants to apply to commercial and general aviation aircraft is not appropriate. "The difference is that we know who's on the aircraft," he says.
GAMA will also push lawmakers to boost aeronautics research dollars at NASA, in part to help with general aviation study alternative fuels and transition from leaded to unleaded gasoline for piston-powered aircraft, a switch the Environmental Protection Agency could mandate in the near future.
Bunce says GAMA officials will work across the Atlantic to ensure that emission trading schemes set to go live in 2012 will not be overly egregious to business aviation, an effort taking a high priority.
Source: Flight International
