UK GA manufacturers and traders focus on uncertainties

 - January 21, 2008, 10:34 AM

Almost half of the UK’s General Aviation Manufacturers & Traders Association (GAMTA) members have declared themselves to be less optimistic about business prospects than they were 12 months ago. In survey results published at the group’s annual conference on March 6, only 16 percent said they are now more optimistic than they were when the last survey was taken in March last year, six months after September 11.

According to GAMTA chief executive Graham Forbes, “The biggest single issue influencing GAMTA members’ outlook is the negative effect of the Iraq uncertainties.” But despite concerns over the war in Iraq, he said that the industry does not appear to be suffering from a long-term “endemic disease.”

The GAMTA survey showed that about 40 percent of corporate flight departments in the UK have reduced their flying activity over the past year. Just over 20 percent of operators have increased activity.

Almost half the executive charter firms surveyed said they flew fewer hours for hire over the past 12 months than in the period preceding last year’s survey. About 20 percent reported an improvement in hours flown. The number of movements reported by airports and FBOs was evenly split at just over 30 percent each among those who reported worse, better and the same traffic levels.

About 20 percent of aircraft management firms reported an improvement in their business and about 15 percent of them said demand had been reduced. By contrast, about 50 percent of air ambulance operators reported a drop in flying activity. Forty percent of respondents said that demand for fractional ownership has strengthened over the past 12 months.

The survey also showed that 30 percent of GAMTA members involved in aircraft sales reported reduced levels of orders and inquiries. Similarly, 45 percent of companies responding reported a decline in demand for spares, components and equipment installation. Aircraft maintenance providers generally seemed to have fared somewhat better, with almost a third reporting an improvement in activity, although almost the same percentage said business declined.

When asked how they view business prospects for the next 12 months, more than 45 percent checked the “moderate” option, while just over 20 percent said “good” and about 15 percent chose “poor.” About 40 percent of respondents said their profits for the past year have been below forecast levels and around 20 percent said their forecasts had been exceeded. Almost 30 percent of firms have cut their workforce in response to tough trading conditions, while around 25 percent have increased their staffing levels.

Commenting on current market conditions, Cessna’s sales director for Europe, Trevor Esling, predicted that this year will prove to be “no better” than last year, and
he hopes for an improvement next year. He said substantial capital tax allowances, like those recently introduced in the U.S., could serve as a significant spur for increased sales in Europe.