Bizav CEOs Offer Their Perspectives for Economic Rebound

 - October 25, 2012, 9:03 AM
While many companies are beginning to see some encouraging signs of recovery in the U.S. and Europe, most are turning to emerging markets such as China and Brazil, above, to compensate for continued weak sales in what have traditionally been the regions with greatest demand for business aircraft.

The 65th Annual NBAA Meeting and Convention in Orlando, Fla., is taking place as the U.S. presidential election looms and with the state of the global economy very much on the minds of people worldwide. AIN recently took the opportunity to ask the leaders of several business aircraft manufacturers for their thoughts on the state of the economy and their forecasts for the business aviation industry.

Perhaps not surprisingly, responses were generally measured to the question, “Is your company seeing any light at the end of the tunnel as far as the overall economy is concerned and for the business aviation market in particular?” While many companies are beginning to see some encouraging signs of recovery in the U.S. and Europe, most are turning to emerging markets to compensate for continued weak sales in what have traditionally been the regions with greatest demand for business aircraft.

“Business aviation activity differs depending on the geographic area,” said John Rosanvallon, president and CEO of Dassault Falcon. “The BRIC countries of Brazil, Russia, India and China remain our backbone, but we’re seeing a slow increase of activity in the United States. Latin America, Australia and the rest of Asia are all active markets for Falcon business jets.”

That sentiment was echoed by Stéphane Mayer, president and CEO, Daher-Socata. “In terms of geography, while Europe is suffering from a very poor growth, the rest of the world is enjoying recovery,” he said. “In terms of aviation segments, commercial aviation is already in a significant climb, while business aircraft are just seeing the light and are preparing to take off.”

“While we have seen the global market for Piper business and training aircraft grow over the past year, we remain cautious about the state of the global economy,” said Simon Caldecott, president and CEO of Piper Aircraft. “As a corporation, we continue to reach out to more countries in the world and expand our presence to ensure that our business is not dependent on one particular region.”

The outlook appears more encouraging for manufacturers of the largest, longest range and most opulent business aircraft. Steve Taylor, president of Boeing Business Jets, noted his company has been “quite fortunate that the downturn hasn’t hit the high end of the market as much as the entry-level business jets. The market continues to be challenging for us, [but] we have a great backlog and this year alone we’ll deliver 12 airplanes into completion, including eight BBJ 747-8s, and we’ll also move 12 airplanes from completion into service.”

Taylor’s counterpart across the Atlantic, Airbus Corporate Jets vice president for worldwide sales François Chazelle, echoed that sentiment. “Airbus corporate jets continue to spark interest from companies, individuals and governments at the top end of the marketplace, despite the economic uncertainty that our industry faces,” he said.

Responses were mixed from manufacturers of light- to medium-sized business aircraft, reflecting a continuing downward trend of depressed deliveries in these segments. “The industry continues bumping along the bottom of a stubborn and difficult market,” said Hawker Beechcraft chairman Bill Boisture. “While the larger aircraft segment is experiencing a faster recovery, we are not seeing similar progress for the smaller aircraft segment. Despite this, however, our King Air order intake is on pace with the last two years and the special-mission market remains strong for Hawker Beechcraft.”

Ernest Edwards, president, Embraer Executive Jets, said his company “is seeing the first signs of recovery, especially in the U.S. market. Global demand for business jets appears to be further off, especially due to uncertainty in the European economy. China and Asia Pacific, on the other hand, are brighter spots where Embraer is well positioned for growth.”

“Cessna remains optimistic about our long-term strategies and success in the general aviation industry,” said Cessna Aircraft president and CEO Scott Ernest. “Our focus on developing and delivering high-quality, innovative products based on customer input, providing outstanding service and support and expanding our global presence in new and more mature markets will allow us to remain the global leader in general aviation for years to come.”

The state of the global economy has offered opportunities to manufacturers of efficient single-engine turboprops. Thomas Bosshard, president and CEO of Pilatus Business Aircraft, said he considers the economic climate “an excellent opportunity for Pilatus. The PC-12NG is an efficient and versatile aircraft that enables corporations and governments to accomplish more with limited resources.”

“We are seeing some positive signs in the marketplace, both domestically and outside the United States,” noted Dave Vander Griend, chairman and CEO of Quest Aircraft. “Barring another severe economic downturn, we are optimistic about our prospects in several geographic markets going into 2013.” Vander Griend added that his company has expanded its marketing efforts throughout Latin America, a region he termed “a bright spot” for Quest and other turboprop manufacturers.

By far the most encouraging sentiment came from Mason Holland, chairman and CEO of Eclipse Aerospace. Noting that even the most severe economic downturns have historically been cyclical in nature, Holland stated he is “very, very bullish on the economy. Manufacturing is coming back to the U.S. at a modest pace, after years of being dominated by the service industry over the production of goods. I believe, beyond a shadow of a doubt, that we’ll look back in 10 years and marvel that the Dow was only 13,000, because we’ll be at 30,000,” Holland concluded. “As the U.S. goes, so goes the world.”