There's no question the financial crisis has hammered business aviation in the last 36 months as the economic downturn and an associated undercurrent of negative public scrutiny have combined to plunge the industry into the worst decline in its 65-year history. Still, while it’s tempting to draw colorful conclusions from piles of raw data that on their own might seem to suggest a broken industry — “the next Detroit,” as some are heard whispering about Wichita — dig deeper into the numbers and a parallel story emerges. Rooted in an unassailable maxim of modern commerce, it predicts the following: America, spread across a vast continent and acting as a prominent force in global business, cannot claw its way back to prosperity — or anything like it — without successful companies and entrepreneurs relying on large numbers of fast and efficient business jets to whisk them to the site of the next make-or-break business meeting.
At its heart, a corporate flight department consists of a group of qualified professionals and associated manuals and management procedures that exist to support the safe, efficient and legal operation of business aircraft. Beyond the duties associated with transporting company personnel, the flight department’s roles can include aircraft scheduling, crew management, maintenance and repair, and flight planning, or these tasks can be farmed out to third parties. In its simplest form, a “flight department” can consist of one pilot who flies a single airplane and runs the entire operation. At the other end of the spectrum, a company can choose to build its own private flight terminal, hangar, and fueling and maintenance facilities, staffed by a group of employees that includes a director of aviation, chief pilot, chief of maintenance and crew members flying multiple corporate jets, turboprops and helicopters.
Diving into the numbers, the facts and figures about business aviation’s current dire straits that usually garner the most attention revolve around the number of layoffs in business jet manufacturing — more than 20,000 and counting — and sharp declines in aircraft deliveries that have cut the production rate almost in half.
But again, drill further down and the still-frame picture that some see of a stagnating industry begins to be shaped in a broader context. For instance, despite a steep rise in layoffs after the economic crisis began in 2008, the business aviation industry as a whole continues to employ more than 1.2 million and contributes $150 billion annually to U.S. economic output. Before the downturn, there were about 13,000 corporate flight departments and individual owners operating more than 17,000 business jets and turboprops in the United States, according to the National Business Aviation Association. Today, both of those figures are rising, not falling.
The rate of growth has slowed, but flight departments have not disbanded en masse as you might have guessed. Just as encouraging, far fewer of them are putting airplanes up for sale. Some have even begun placing aircraft orders again.
A key indicator of the health of business aviation is the delivery rate of new airplanes. The tally dropped this year to its lowest point since 2003 — put in historical context, 2003 was a very good year, but it was still well off the industry highs of 2007 and 2008 and far below where it should be to support the current manufacturing supply chain. Looking at recent data, business jet shipments totaled 261 in the first six months of 2011, a 26.5 percent decline compared with the 355 delivered in the first six months of 2010. Billings for general aviation airplanes totaled $7.3 billion, down 22.3 percent from 2010.
So the numbers aren’t great. But on the bright side, shipments of large-cabin business jets in this time period actually rose by about 1.2 percent, while the rate of decline for piston-powered airplanes and turboprops appears to be slowing. Meanwhile, order books for several new business jet models, including the Gulfstream G650 and G280, Bombardier Global 7000 and 8000, Embraer Legacy 450 and 500 and Honda Aircraft HondaJet, are quite healthy.