Burgeoning economies and international trade links boost business-aircraft prospects.
Graham Warwick/Santiago
MOST AEROSPACE ANALYSTS focus their efforts on understanding the US, European and Asian markets, while largely ignoring Latin American potential. When considering business-aircraft sales prospects, that could prove to be a mistake.
For business-aircraft manufacturers, Latin America has the hallmarks of a major market in the making, with growing economies, unlike in Europe, generating demand for corporate transport; and no cultural or structural barriers, unlike in Asia, to the use of corporate aircraft.
There are many business aircraft already in use in Latin America, principally in Mexico and Brazil, but also in Argentina, Chile and elsewhere. Traditionally, it is a good market for used, predominantly short-range, aircraft - but that is changing as growing corporations begin to flex their muscles across borders and continents.
Cessna is taking its Citation X high-speed business-jet on a tour through Latin America, having demonstrated its ability to fly from the US Mid-West to Chile, with one stop. The Citation X was displayed at Chile's FIDAE '96 show. Also on display was a Gulfstream IV, and Gulfstream is believed to have sold its first long-range GV into South America.
THE RIGHT RANGE
AlliedSignal exhibited a Dassault Falcon 20 re-engined with its TFE531-5BR turbofans and sees six to eight candidates in the region for the $3.6 million conversion, which effectively doubles the range of the aircraft to 4,500km (2,450nm) - "just about right for the South American market", the company believes.
Range is increasingly important to South American operators, as countries in the area do more business with each other and with North America. One Argentine power company is now Chilean-owned, for example, and a Brazilian company is working with Canada's Bombardier on building a high-speed-rail system in Florida.
Chile, which has Latin America's strongest economy, is being courted to join the existing Mercosur economic alliance of "southern cone" countries, principally Brazil and Argentina. At the same time, Canada wants to use its close ties with Chile to bring the country into the North American Free Trade Agreement, which already includes Mexico.
Combine this increasing economic interdependency with an air-transport system which essentially runs north-south, with more Latin American connections through Miami than via any South American airport, and it becomes easier to regard the region as a potentially large market for business aircraft.
Cessna sees the Latin American market as being similar in size to that of Western Europe, dominated by Brazil with 60% of the aircraft now in service in the region. The Citation is the dominant type in the Brazilian market, the company says, and a major presentation of the Citation X is planned in Sao Paulo.
The mid-sized X is the biggest Citation yet and, with the ability to cover longer ranges at higher speeds than any other Citation (and most other mid-sized business jets), is seen as having appeal in Latin America. The key to selling the $15.5 million aircraft, Cessna says, is to demonstrate its time saving ability on actual corporate routes.
The flight from Wichita to Santiago via Guayaqil, with a 5.3h first leg and 4.2h second leg, was used by Cessna to illustrate the Mach 0.92 Citation X's ability to cover long distances, fast. That ability to reach North America is also at the heart of Bombardier's bid to sell business aircraft into the region.
Previously, the company admits, the Challenger was of little interest in the region as it lacked the ability to reach the USA. The new 7,400km-range Challenger 604 changes that, the company believes, bringing the ability to fly from Santiago to Florida, for example, or to Mexico City, Bermuda or Cape Town, South Africa.
The Challenger Special Edition, with the longer cabin of the Canadair Regional Jet, will reach Puerto Rico from Santiago, enabling operators to pass through US customs controls then reach most of North America on the second hop. For operators with requirements for even longer reach, the 12,000km-range Bombardier Global Express will reach London, Vancouver or Hawaii from Santiago, the company calculates.
Bombardier views large business-jets as a growth market in Latin America, provided that operators can be educated on their capabilities. The market for short-range aircraft is well established, it says, noting that most of the existing South American aircraft are operated within the "population triangle" of Sao Paulo-Buenos Aires-Santiago and are flown on 2-3h trips.
LONGER RANGE IN DEMAND
Burgeoning economies and increasing industrial links with North America and Asia are generating demand for longer-range business aircraft, believes Bombardier, which is "encouraged" by interest in the Challenger 604 and Global Express. The latter aircraft, can reach most of the USA non-stop at high speed (Mach 0.88) and much of Asia, with one stop at M0.8.
Latin America is not like Asia, which has enormous potential for long-range business jets, but faces cultural barriers to the ownership of corporate aircraft and airport-access problems, which limit their usefulness. Latin America is accustomed to the use of business aircraft and airport access is not seen as a problem in the region.
Even expensive aircraft, such as the $35 million Global Express and GV are now seen as being within the means of some of the region's wealthier corporations. Brazil is a "great prospect", believes Bombardier, with several financially strong companies and a growing economy which has the banks again willing to lend money to buy aircraft.
Above all, Latin America is viewed as a "rational market" for business aircraft, lacking some of the factors which come into play when selling into other regions. Decisions are made based on factors such as size, speed and range, manufacturers say. Price is also important, and used aircraft are likely to continue to play a important role in the region.
Source: Flight International
