It was five years ago this week that the wheels came off the global economy. As we all vividly remember, the U.S. government bailout of AIG and the collapse of Lehman Brothers in September 2008 sent the Dow into a tailspin unlike anything we had seen in decades. The historic Great Recession was officially under way.
Technically the recession started in December 2007, but it wasn’t until September 2008 that the global economy was hit by a particularly sharp and long-lasting downturn. Before that time the heads of all the major aircraft manufacturers from Cessna to Bombardier to Dassault and Hawker Beech talked about a “soft landing” for business aviation. They simply couldn’t imagine that an industry in the midst of it’s best runup ever could transition from boom to bust overnight.
That’s exactly what happened. We now know how wrong those hopeful prognostications turned out to be. At the 2008 NBAA Convention in early October, aircraft sales representatives who talked of being “cautiously optimisitc” about prospects for business at the show were crestfallen by the time it was over. Not only had the order spigot turned swiftly to the full off position, the customers who showed up often did so with the intent of canceling aircraft orders.
The business jet manufacturing industry isn’t built to handle this sort of shock. Production is planned far in advance with a global supply chain that relies on a steady march of airplanes down the lines. The result was white tail airplanes cramming manufacturers’ ramps as shiny new jets emerged from production facilities without buyers.
I know it doesn’t seem like it to a lot of folks, but the economy is improving, and solidly so in many areas. Jet manufacturers are regaining some of their pre-recession swagger. Sure, BlackBerry made headlines this week by closing its flight department, but what you don’t often read about are all the new flight departments that are popping up as old companies return to health and new ones begin to prosper.
We’re also starting to see some big aircraft sales announcements, such as the massive King Air order a new company called Wheels Up placed recently. Avantair is gone, but fractional giant Flexjet has new owners and is preparing for growth. Across the globe, sales are slowly picking up. It’s still a mixed bag for the bizjet industry, but increasingly that bag is filled with good news instead of bad.
We’ll see how things shake out at the upcoming NBAA Convention in Las Vegas next month, but I’m more than cautiously optimistic that the show will yield mostly good news. Look for some intriguing new airplanes to make their debuts and even some bulk sales announcements. The worst of the storm is now behind us, and it’s time for business jet makers to start looking confidently toward the future.
For an industry that has weathered five years of hell, it’s about time.
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