The honeymoon is over and newlyweds NBAA and EBAA are even happier about their EBACE union than they were after last year’s inaugural European Business and Aviation Convention (now Conference) and Exhibition.
Although EBACE number two–held May 28 to 30 at the same Palexpo venue in Geneva, Switzerland, as EBACE 2001–did not entice exhibitors to make the really big announcements attendees at annual NBAA conventions and biennial Paris and Farnborough airshows have come to expect, it did gain respect for what many exhibitors called the “high quality of the EBACE visitors.” Translated, that euphemism means, “people who can afford to buy a multi-million-dollar aircraft.” Boeing Business Jets president Lee Monson said he even prefers EBACE to the NBAA convention, where most visitors to BBJ’s booth are pilots. “Which is fine,” he explained, “but here in Geneva we see more principals than anywhere else, people who have the ability to write a check.”
Significantly, Boeing Business Jets and Raytheon Aircraft have decided this year to favor EBACE over the Farnborough Air Show, although their respective corporate parents will exhibit at the biennial UK show this month. Cessna Aircraft has been giving Farnborough a pass since 1992. Bombardier gave EBACE 2001 a pass in favor of Paris last year (a decision some company insiders opposed to no avail), but showed up in full force at EBACE 2002. “Look at the EBACE ramp. It has all business jet models represented,” a Bombardier spokesman said enthusiastically. That was a slight exaggeration, especially since Bombardier’s own Global Express was not in attendance, but he made his point. (The Canadian OEM will also attend Farnborough this year.)
Quality EBACE visitors bought aircraft, perhaps not in record numbers, but enough to keep most OEM execs smiling and wanting to return. Like mom, when the OEMs are happy, everyone else is happy, too, especially NBAA and EBAA, which split the event’s profits fifty-fifty. (EBAA earned enough from EBACE 2001 to double its full-time staff from three to six, which has allowed it to become more effective in its lobbying activities.) Of course, aircraft sales announced at international airshows and conventions are notoriously fuzzy numbers and must be taken with a shaker of salt.
On one hand, OEMs and their suppliers like to announce orders “signed” at the event, often blurring the distinction between signed-on-the-bottom-line, deposit-backed orders with firm delivery dates and the more iffy options, memoranda of understanding and letters of intent. Even with real orders, all the grunt work is usually done before the show and the CEOs simply raise a glass of champagne together for the photo op. On the other hand, much legitimate business does take place at the shows: final negotiations go on behind closed doors, while on the exhibit floor or the static display ramp passers-by become prospects, prospects become probable customers and occasionally the proverbial man on the street walks up to a salesman and says, “I’ll take one of those. When can I have it?”
It’s this legitimate business that is fueling exhibitor enthusiasm for EBACE. Said Ken Lilley of Rolls-Royce, “EBACE, and preferably EBACE in Geneva, looks set to become the key business aviation show in Europe.” A straw poll by AIN asking “Did you like the show? Will you return? Are you happy with the locations?” elicited “ayes” to all three questions about 95 percent of the time. Larry Williams of restraint-systems specialist Amsafe Aviation, at EBACE for the second time, said, “Frankly, [after last year’s event] we had a meeting and decided this probably wasn’t worth coming back to. But when we found out later that some contact at the convention helped us win back a program we had lost, we came back this year. Also some of our competitors are here. Anything they do I’m going to do better.” Another long-time industry executive said privately, “From a personal standpoint, I hope EBACE continues to expand and earn its place on the permanent business aircraft schedule. Geneva is a great venue, with all sorts of advantages.”
Of course, not everyone was equally enthusiastic. Eurocopter executives were disappointed at the numbers and quality of visitors, although they admitted that, as a helicopter manufacturer, they might be suffering from the show’s strong fixed-wing bias. Among the financial community, the feelings were mixed. GMAC Business Aviation Finance, for example, closed some deals, as it did last year,
but was disappointed by the lack of customers this year. Peter Weber, general manager of Geneva-based finance house Bizjet SA, said he saw “many important figures here from the U.S., Germany, UK and Italy,” and would definitely be coming back next year.
So after just two events, EBACE has defined and established its niche as the European business aviation event. And although still small by NBAA standards, where recent conventions (excluding last year’s) have attracted about 30,000 visitors and 1,000 exhibitors, EBACE logged a respectable 33-percent increase in attendees over last year, from 3,620 to 4,824. The number of exhibitors increased from 190 to 219, a 15-percent increase. With 35 aircraft displayed, the static ramp was nearly maxed out; 31 aircraft graced the apron last year. Mentioned frequently by both attendees and exhibitors as one of the venue’s strong points, by the way, is the proximity of the static area to the exhibit hall, which is accessible via a footbridge over the airport fence. No current NBAA convention venue can provide such convenience.
Nor will LABACE, the Latin American Business Aviation Conference and Exhibition, which NBAA hopes will replicate (although not duplicate) the EBACE model in South America. Another joint venture, this time with the Brazilian business aviation association (Associacao Brasileira de Aviac Geral, or ABAG), LABACE is scheduled for January 16 to 18 next year in São Paulo, Brazil. There, as at NBAA conventions, the static area will be at a local airport while the exhibit hall and meeting rooms will be in a convention center. “It’s about five minutes by helicopter from the Trans-America Expo Center to Congonhas Airport, or about 30 minutes by car, depending on traffic,” NBAA president Jack Olcott told AIN. However, ground transportation in São Paulo has some EBACE exhibitors worried, as carjackings are, according to security reports, a common occurrence in the city. “You must hire a dependable driver,” said one exhibitor, who has been to São Paulo numerous times. Besides the security aspects, most EBACE exhibitors had their doubts about LABACE, questioning the need for the event (“not another air show”), its location (Portuguese-speaking Brazil, although centrally located, stands somewhat on its own in South America) and the timing (mid summer in the Southern Hemisphere). Many had not even heard of LABACE yet, which NBAA had announced just a month before EBACE, on April 25.
Olcott countered that “Brazil, as a single country, is second only to the U.S. in terms of the number of business aircraft.” He said, “As a whole, the European business aviation market is larger, but comprises many countries. We believe LABACE will be a good platform to reach out to the rest of South America.” Whether this is true or not is the question no one can yet answer. For the time being, it appears that the bigger bizav exhibitors are either planning “a limited presence” of some sort at LABACE or not attending at all, while the smaller ones are waiting to see what their competitors plan to do.
“The world has experienced huge changes since EBAA and NBAA convened the first EBACE here in Geneva last year,” said Brian Humphries, EBAA chairman, at the conference’s opening general session. “EBACE,” he continued, “was created to address the operational, regulatory and security considerations of business aircraft operations.” And so they were, at the opening general session and 13 informational sessions.
Representatives of Eurocontrol, the air transport directorate of the European Commission and the Joint Aviation Authorities all expressed recognition of the importance of business aviation and encouraged the community to continue to make its opinions known. Eurocontrol understands that the primary advantages of business aviation–flexibility and speed–depend on access to airports and airspace, said Victor Aguado, director general of the European ATC organization, “but access is a problem because of increasing congestion.” Capacity is about three years behind what Eurocontrol would like it to be, he said, adding that it should be managed from a pan-European standpoint. Therefore, he said, Eurocontrol supports the European Commission’s Single Sky initiative.
Alex Hendricks, head of Eurocontrol’s airspace management and navigation unit, said traffic forecasts show serious airspace congestion by 2010 in Europe. Single Sky, anticipated in 2012, is seen as the ultimate objective and solution. To reach it, new steps will be taken every two years, among them the implementation of free routes (the European equivalent of Free Flight in the U.S.).
Claude Probst, an advisor to the Air Transport Directorate of the EC, said “it is important for you as a group to get involved.” He briefly reviewed some current EC plans that will affect business aviation, including (again) Single Sky; Galileo (the European GPS network), which the EU Transport Council approved in March; revised slot rules, for which a discussion paper is expected by the end of this year; a new directive on noise rules, also approved in March; and the European Aviation Safety Agency. Also on the docket is a new regulation covering airport security, expected to be approved in September, but which will mainly affect commercial aviation. “An ad hoc security group,” he explained, “had agreed that business aviation should be subject to security regulations, but not exactly the same rules as commercial aviation.”
On security, Humphries and Olcott emphasized the inherently and uniquely secure nature of business aviation. “The passengers are known to the crew,” said Olcott, “therefore security regulations governing private and commercial transportation should be different.” Charter operators, however, carry both known and unknown passengers, which makes screening of charter passengers a particularly thorny problem.
For foreign operators needing to fly to the U.S. or for pilots wanting to undergo flight training for aircraft exceeding 12,500 lb, there was little good news. Most non-U.S. registered aircraft still need a waiver to gain entry into the country. Said Bob Blouin, NBAA senior v-p of operations, “I simply don’t know” when the restrictions will change. In the U.S., bizav still does not have access to Ronald Reagan Washington National Airport, and Boston and Chicago have imposed local restrictions requiring advance passenger manifests be sent to the destinations in these airports. Other security legislation requires that non-U.S. pilots going to the U.S. for flight training must apply for a security clearance 45 days in advance.
According to Rudy Toering, managing director of European sales for FlightSafety International, U.S. training companies are losing millions of dollars in business because of the onerous restrictions. Currently, training is permissible in aircraft weighing less than 12,500 lb, but in larger aircraft it is restricted to those who are already qualified on an aircraft of that weight, or to military pilots who are part of a U.S. contract or pursuant to exports authorization. Familiarization training through a manufacturer is authorized, but does not allow type training.
George Rebender, operations director of the Joint Aviation Authorities, confirmed that the new JAR OPS 2 operating requirements for business aviation are expected to be released as a formal proposal by the end of the year. In what could be a feather in the cap for the International Business Aviation Council (IBAC), the JAA has already signaled that it may be ready to accept the council’s just released International Standards for Business Aircraft Operators (IS-BAO) accreditation for JAR OPS 2 compliance.
Said Don Spruston, IBAC director general, “JAA has recognized this as a way of getting away from the prescriptive regulations you see in JAR OPS 1,” which encompasses commercial airplanes. JAR OPS 2 will therefore be similar to FAR Part 91, for which there is no JAA equivalent. The main purpose of IS-BAO is to promote the harmonization of quality operating practices for bizav operators on the international level. It provides a baseline which operators should apply in structuring and staffing their flight departments and in planning and conducting their operations.
Less encouraging are noise and environmental issues. “You may think that business aviation does not need to be involved with environmental regulations right now, but in a few years you will have to be involved, especially here in Europe,” said Leonie Dobbie, director of aviation environment for the International Air Transportation Association, at a session on the subject. On almost every level–from the United Nations to regional and local authorities– new environmental regulations are being proposed, debated and adopted, said Guy Visele, a legal advisor to EBACE, who is also chairing the Environmental Issues Working Group for IBAC. “The environment is perceived to be the major challenge for aviation in the coming years,” he said, “and we can expect major impacts on air transportation and the industry.”
JAA recently released its long-awaited Notice of Proposed Amendment that would approve IMC operations of commercial single-turbine airplanes in Europe, but Pilatus Aircraft, builder of the PC-12 turboprop single, expressed its frustration at the delays. “At a time when the aviation industry is hurting, it needs help and understanding from its regulators,” Pilatus said in a written statement read at a press conference. “Instead of that, the JAA continues to debate and to waste large sums of taxpayers’ money. With major aviation nations like the U.S., Canada and Australia having approved commercial single-engine IFR operations, there would appear to be no logical reason for continued prohibition of such operations in Europe. The restriction is damaging the aircraft industry and preventing European operators from offering the benefits of lower cost to their customers.” Not surprisingly, a Pilatus salesman said the company has written confirmations from 10 European operators saying that they would buy PC-12s as soon as commercial single-engine IFR operations are allowed.
The Aircraft Manufacturers
Brazil’s Embraer brought its fully finished Legacy to EBACE 2002 for its European debut, touting the $20.4 million regional-airliner derivative as “the business jet for the new economy.” It now holds Brazilian certification in its VIP form, and FAA and JAA approvals are expected imminently. In Geneva, the company signed its 74th commitment for the Legacy, with Spanish real estate developer Fadesa. When delivered in September, the airplane will replace Fadesa’s Hawker 700. The first European customer Legacy is scheduled to be delivered to an unnamed buyer next month. It will be based in Zurich and managed by charter operator G5 Executive.
Gulfstream announced that it expects JAA certification of the GV “within a few months,” more than five years after the FAA certified the super-long-range jet. But lack of JAA approval has not stopped Gulfstream from selling GVs in Europe. G5 Executive, for example, has put 5,000 hr on its GV in four years. Being considered for Europe is Gulfstream’s new airborne product supports service using a G100 and just introduced in the U.S. (AIN, May, page 10). That service guarantees to get parts and technicians if needed to warranty-covered Gulfstream aircraft if normal commercial transportation methods cannot be used. Signed at EBACE was an agreement naming Jet Aviation centers in Hanover, Germany, and Singapore as authorized service centers for the G100 and G200 and in Geneva for the G200.
Sino Swearingen Aircraft quietly admitted that FAA certification of the SJ30-2 entry-level jet has been deferred to late next year, from its previously announced estimate of late this year. A shift in plans regarding the manufacture of the fuselage and wings caused the delay. The company had contracted with Gamesa of Spain to produce these items, but abandoned this plan due to a dispute over quality. The good news is the company’s consortium of Taiwanese financial backers remains committed, according to a spokesman, and that production of the first customer aircraft (expected delivery early 2004) has begun at the company’s facility in Martinsburg, W. Va.–now staffed by 85 employees. Sino Swearingen reported holding firm orders backed by $75,000 nonrefundable deposits for 154 SJ30-2s, representing production well into 2005.
Another entry-level jet made its European “premier” as a certified aircraft and attracted much attention in the EBACE static display. A first-timer at EBACE himself, Raytheon Aircraft chairman and CEO Jim Schuster told AIN, “I was just on the ramp and of all the aircraft on display, the Premier I is the only one with a line of people to get in to see it.” Regardless of cabin size (except perhaps BBJ) “one person or group at a time” generally is the etiquette. While in Geneva, Raytheon hailed the first flight, on May 10, of the second Hawker Horizon prototype, but it was for two Hawker 800XPs that the company solidified “handshake” purchase agreements with two separate buyers, according to Brad Hatt, v-p of sales and marketing. And proving again that turboprops are not dead yet, the Wichita OEM displayed a 16-passenger executive-configured Beech 1900D registered in Germany. What made the airplane unusual was the Spectrum Aeromed Systems medical equipment installed in the aft cabin area.
French manufacturer Dassault reported its in-flight-test Falcon 2000EX had logged 180 flight hours and that 380 people from 18 companies are working on the design of its developing Falcon 7X at the company’s headquarters in Saint-Cloud, France. Said chairman and CEO Charles Edelstenne, “the slowdown we experienced in late 2001 and early 2002 is over,” adding that the company plans to deliver 73 Falcons this year from its two-year backlog. John Rosanvallon, president of Teterboro, N.J.-based Dassault Falcon Jet, said at an EBACE press conference, “we have sold roughly the first 30 Falcon 2000EX.” Edelstenne said the company is “in the process of turning our 41 letters of intent for the Falcon 7X into firm orders.”
Cessna Aircraft gave EBACE visitors their first look at the company’s upgraded Citation X, with the more powerful Rolls-Royce AE3007C-1 engines (6,764 lb thrust, up from the 6,442 lb thrust of the AE3007Cs). The power boost allowed Cessna to increase the Mach 0.92 speedster’s mtow by 400 lb, to 36,100 lb. Runway performance at lower weights is improved, but the NBAA IFR range and cruise speeds remain unchanged. The upgrade and $200,000 higher price tag ($18.995 million) applies to all Citation Xs delivered after January 1 this year, but it also includes a substantially enhanced standard equipment list. Also at EBACE, the company reported selling six 208B Caravan turboprops and one Citation Sovereign. Cessna has seen its order backlog decline from $6 billion of 18 months ago to its current level of about $4 billion, and v-p of marketing Phil Michel said he expects the backlog to decline to about $3.5 billion by year-end, before rebounding with the economy.
Three Boeing Business Jets found their way to Geneva. BBJ brought one in NetJets livery (including a “QS”-suffixed N-number), but it was not a fractional airplane. As BBJ chief pilot Mike Hewett explained, “Last year, a lot of customers were looking to buy whole aircraft, not just shares. So this airplane was pulled out of the NetJets order book. But after September 11, despite a huge amount of interest in the BBJ, there has been a lot of hesitation to close the deal.” The airplane had about 130 flight hours and an asking price of about $50 million. Joining it nose-to-nose on the ramp was a pure-white BBJ with only 70 hr and just out of a 15-month completion by Jet Aviation in Basel. Owned by FlightCenter, it was for sale, too–for $54 million. Soundproofing material accounts for 2,000 lb of its 18,000-lb interior, making it, according to Brad Wallen of FlightCenter, “probably the quietest 737 in operation.” The third BBJ was a real NetJets airplane; it carried NetJets CEO Richard Santulli and entourage to and from Geneva. BBJ CEO Monson said 50 BBJs are now in service and that the fleet has logged more than 31,400 hr on 13,800 flights and achieved a 99.9-percent dispatch reliability. Total sales number 83 aircraft.
Airbus displayed two ACJs–one operated by Aero Services Executive of Paris, and the other by the UK’s Twinjet Aircraft. Total sales of the ACJ now stand at more than 30, said Airbus. Fourteen have been delivered to date and 12 are in service. The governments of France, Italy and Venezuela and Qatar Airways are among the known operators. Corporate owner DaimlerChrysler, operating four weekly transatlantic roundtrips with its ACJ, has so far achieved a dispatch reliability of 100 percent. With more than 20 people on board, the cost per passenger is below that of an airline business class ticket, according to Airbus. The company said it is targeting this December for ETOPS 180 certification of the ACJ. The aircraft is already certified for ETOPS 120 operations.
Switzerland’s primary airframer, Pilatus, had “an excellent year and a disappointing year,” according to Oscar Schwenk, CEO. Excellent, because earnings of $38.5 million (before interest and taxes) were the highest ever and because its total sales of $283 million were surpassed only by year 2000 sales. However, demand in North America–the main market for the PC-12–decreased sharply in the second half of the year, and total new orders dropped 54 percent compared to 2000. In the early months of this year, Pilatus struggled with a declining order backlog and few new sales, but its marketing team on both sides of the Atlantic sees business picking up. “If a significant number of demo flights lead to sales, 2002 could be a good year for us,” said Ralph Bodenehr of Pilatus subsidiary Transairco.
Another European turboprop builder announced an order on the first day of the show. Piaggio Aero Industries of Italy said an unnamed UK operator had taken a contract for one aircraft and options for four more, with the first airplane scheduled for delivery this year. Later during the show Piaggio logged its first Avanti sale in the Netherlands, to Rotterdam-based real estate group TCN Property Projects. Piaggio also announced the appointment of Sloane Aviation as its exclusive distributor for the UK and Ireland. A total of 50 P.180 Avantis are in service–29 in Europe and 21 in North America. At EBACE, Massimo Isidori, Piaggio v-p of aircraft sales for Europe and the Middle East, told AIN, “The Avanti is optimized as a turboprop, and the potential small increase in speed of a jet-powered version could certainly be outweighed by the increase in fuel consumption and reductions in range and performance. These along with the price, of course, are specific areas where the existing Avanti is successfully competing with the jets, so why would we want to introduce an internal headwind for Avanti sales?” Other design configurations are being considered, however, and Piaggio may be in a position to make an announcement about one of them at September’s NBAA Convention in Orlando.
Canada’s Bombardier announced that its long-legged Global Express had received type approval from the Japan Civil Aviation Authority, clearing the airplane’s way for both basing in Japan and special-mission applications. The JCAB plans to use a Global for flight inspection and airways calibration within Japan and had awarded a contract for two aircraft in 1999. The Global was granted type approval by the JAA in 1999 and has been approved in 33 countries, 24 of which are in Europe. After giving EBACE a by last year, Bombardier showed up with a Learjet 31A, Learjet 45, Learjet 60 and Challenger 604. Shawn Vick, v-p of international sales, told AIN that Europe is now Bombardier’s largest single target market and that the company has almost doubled its market share in Europe over the last five years, selling about 125 aircraft in that period. In Vick’s view, Bombardier’s recently relaunched Flexjet Europe block charter program will be a productive marketing vehicle for the company’s products. At EBACE, Bombardier’s pre-owned aircraft division sold two used Learjet 31As to Danish company Foxeco Jet. The airplanes will be based in Milan and operated by AirMach.
Start-up OEM Eclipse of Albuquerque, N.M., did not exhibit at EBACE, but CEO Vern Raburn arrived with an order for 112 of the super-light Eclipse 500s from another start-up, Zurich-based Aviace, which plans to establish “jet clubs” throughout Europe. According to CEO Hilmar Hilmarrsson, Aviace, formed only in January, will own the airplanes and establish agreements with current business aircraft operators to fly the airplanes with their pilots, but under the Aviace brand. Each jet club member would pay a membership fee based on flight time desired, a monthly management fee and an hourly cost. Hilmarrsson said he already has guarantees from more than 15 operators in eight countries. Meanwhile, Raburn said the first Eclipse 500 would roll out on July 13 and make its first flight before the end of the summer.
French manufacturer EADS Socata sold its first TBM 700 turboprop in South Africa, to Dafin Asset Finance in Johannesburg, which also ordered two TB20 Trinidad GT piston singles. Philippe Debrun, Socata CEO, also announced another TBM order from an undisclosed UK customer, and Jetfly Aviation of Luxembourg took delivery in Geneva of its sixth TBM 700 for its fractional program. Socata plans to produce 42 to 44 TBM 700s next year, said Debrun.