Estimates of a 4% growth rate for Latin American business aviation in the coming decade could prove too conservative, given the optimism expressed by airframers and operators preparing for this year's LABACE Latin American business aviation convention and exhibition in São Paulo, Brazil.
Much of the confidence comes from activity in Brazil, the locus of business aviation activity in a region that spans from Mexico in the north to Argentina and Chile to the south. Not only has Brazil's economy stayed fairly robust while the USA and others have tanked, it also has a development magnet in the 2014 soccer World Cup to help it develop a long-term aviation infrastructure that will be friendly to business jet travellers coming from across the globe.
"Today [Brazil] has more cash money than we used to have, even with the financial crisis," says Rui Aquino, president of ABAG, the Brazilian association of general aviation. "Unemployment has been low, and politically, it's very stable. Lots of people want to buy airplanes and helicopters."
Helping too is the favourable US dollar to Brazilian real exchange rate, which has soared 30% since March. "Everybody is aware that the used aircraft prices are so low, and the exchange rate is one of the best ever to purchase US products," says Aquino.
SALES OPTIMISM
OceanAir, a Bombardier distributor and air taxi operator based in São Paulo, measures the optimism in Bombardier Learjet sales. Along with its two fully owned and six managed Learjets, the five-year-old company imports nine-12 aircraft a year in new sales and handles all maintenance and product support for the Bombardier fleet in Brazil, says sales and marketing director Jose Eduardo Brandao.
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OceanAir has also sold three Learjet 85s in Brazil, the Canadian airframer's new all-composite and largest member of the Learjet family, which is set for first deliveries in 2013. One of the three orders is for the launch aircraft for the series, for which the private owner will move up from a Learjet 60, says Brandao.
According to Bombardier's 10-year forecast, Latin America was home to 1,160 business jets as of 2008, excluding Airbus Corporate Jets, Boeing Business Jets and very light jets. Brazil has about 360 of those jets and about 30% of those are Bombardier products, says Brandao.
Bombardier expects the total number of jets in Latin America to increase to 1,780 by 2018, a rate of 4.3% a year on average. That compares with an expected growth rate of 15.6% for China (the high), 10.2% for Europe and 4.1% for North America (the low).
Although about 70% of business jets in Brazil are owned and flown by private owners, Brandao says an increasing number of owners are beginning to share aircraft that are managed by third-party air taxi companies like OceanAir. There is no equivalent to the US or European rules allowing fractional aircraft to fly under special Part 91 rules. Instead, the aircraft must be operated under the equivalent of air taxi Part 135 rules.
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© Piaggio |
Not included in Bombardier's numbers are turbine helicopters used for business purposes, an increasingly important resource for companies in the crowded São Paulo area, where there are about 500 helicopters that can fly to around 230 heliports.
OceanAir, a distributor for AgustaWestland in Brazil, has seen its helicopter business increasing by 30-40% a year over the past two years and will sell in the region 25 new and five previously owned helicopters this year, says Brandao. The company is also a distributor for Pilatus aircraft, which produces five PC-12s a year for Brazil. Brandao says there are 16 PC-12s flying in Brazil and there will be 20 by the end of the year. "We sell whatever we can get from the manufacturer," he adds.
INTEREST FUELLED
The favourable factors in Brazil are fuelling interest in LABACE. ABAG's Aquino says there will be 100 exhibitors at the show, up from 70 last year and including all major business jet manufacturers. There will also be at least 60 aircraft on static display at Congonhas airport, up from 48 last year, he adds.
One of the exhibitors, Italy's Piaggio, will be making its first appearance at the annual show, first held in 2003, as part of a new marketing strategy for its P180 Avanti II twin-engined turboprop in Latin America. Along with gaining Brazilian certification for the Avanti, Piaggio is looking to appoint dealers throughout the region. John Bingham, Piaggio America executive vice-president marketing and sales, says Brazil represents a huge untapped opportunity for the Avanti that Piaggio has never explored.
Bingham says the Avanti is particularly well suited for flying in the Amazon, but it should be well received across the country by both the owner-flown community and corporations. Piaggio plans to use LABACE to look for agents for Argentina, Brazil, Chile, Colombia and Venezuela as well as for Central America - most likely Panama - all locations where the airframer has never had representation.
On the lighter side of business aviation. Italy's Vulcanair will bring its twin-engined P68s to LABACE for the first time. Representing business jet interests will be Bombardier, Cessna, Dassault, Embraer and Gulfstream.
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© Bombardier |
Gulfstream has grown its mid-cabin presence in the region by 450% and its large-cabin presence by 55% between 2004 and 2008 - up to 22 aircraft from four aircraft for the midsize models and up to 70 aircraft from 45 for the large cabins. The company earlier this year slashed production of its G150 and G200 models to 24 aircraft, down from 32 in 2008, and says it may have to cut further due to the "price point" of the models.
Dassault claims market leadership in the wide-cabin sector in Brazil, with 20 aircraft in operation there, a number it expects to double in the next five years. To better service the fleet, the company has applied to the US Federal Aviation Administration and the European Aviation Safety Agency for approval to work on US and European-registered Falcon aircraft at its new factory-owned service centre in São Paulo. The company earned Brazilian repair station certification for the facility in June.
Cessna chief executive Jack Pelton says Brazil is the manufacturer's third-largest market after Europe and the USA and continues to grow despite the global downturn. "It's not as hard hit as other markets," he says. The Citationjet and Caravan turboprop lines are selling well there, with the jets used for long-distance travel between cities and the Caravans accessing some of Brazil's unimproved airfields, particularly in the Amazon region. Pelton says overall sales in Latin America are up this year while nearly every other region is down.
Second to Cessna in terms of market share is Bombardier, with nearly 400 aircraft representing 27% of the market in the region, says Fabio Rebello, Bombardier regional vice-president for sales in Latin America. Although sales in Mexico have been hit by the financial crisis in the USA, given how the two are connected in commerce by the North American free trade agreement, Rebello says Brazil has largely avoided a credit crisis. Banks have continued to provide loans and sales have remained relatively strong with internal demand.
For Latin America in general, Rebello says he expects to see 2008-type growth numbers return in the 2012 timeframe.
Brazil-based Embraer is likely to shake up the market share figures with the recent service entry of the first of its new line of very light, light and midsize business jets. The company delivered its first six-seat Phenom 100 very light jet into Brazil at the end of June, seven months after US deliveries began. Of the more than 800 orders the company has secured for the Phenom 100 and the soon to be certificated Phenom 300 light jet, more than 100 are for Latin America and 70% of those are for Brazil.
Aquino is working to make Brazil's infrastructure more welcoming to those jets before the World Cup. In his opening LABACE speech, he will lobby for the construction of new airports. "We are working with the government, exerting pressure to bring new airports for business aviation," says Aquino.
Source: Flight International
