Business Jet Demand Takes A Drubbing

Facing declines in demand brought on by the recession and persistent perceptions of excess, U.S. business jet traffic has posted significant year-over-year reductions, according to figures published last month by the Aviation Research Group/U.S.

Though ARG/US last month reported March traffic for business aircraft increased by nearly 8 percent compared with February 2009, the private jet market continues to experience severe year-over-year declines. ARG/US estimates that for the past 12 months flight activity has declined by 1.76 percent per month—"with total flight activity declining 20.45 percent year over year."

Michael Boyd, president of aviation consulting firm The Boyd Group, this month wrote, "It is true that the recession has contributed to the decline, but that's not all that's driving the plunge in business jet demand." Boyd noted that emissions cap-and-trade proposals and the ongoing perception of excess associated with business jets also are exacerbating the downward spiral of private jet demand.

"Congress and the administration have essentially declared business jets to be evil tools and enemies of the people," Boyd wrote. He noted, "Politically, buying a business jet is now about as acceptable as doing a coke deal in the corporate boardroom. Selling off business jets—or closing the entire corporate flight department, as the towers of jelly managing GM did—is the in-thing to show you're 'patriotic.' "

The Alliance for Aviation Across America, a coalition of airport operators, state and local officials, general aviation executives and industry groups, including the National Business Aviation Association, detailed the litany of bad news that has befallen general aviation in a call to overturn its image problems.

As part of AAAA, a coalition of 70 mayors, city council members and other local officials from more than a dozen states, including Arizona, Florida, Kansas, Kentucky, Iowa and Texas, last month sent a letter to President Obama in the hope of fostering notions that general aviation is a business tool that connects small communities and offers service to markets that have lost commercial operations amid capacity cuts enacted by commercial airlines in the past year.

"For our communities and those of many small and midsize towns across the Heartland who depend on general aviation, this is very troubling situation," read the letter dated April 22. "To make matters worse, nearly 100 cities and towns have lost scheduled airline service in the last several months. General aviation has become that much more important to the economic life of those communities the airlines won't serve."

The letter notes that while commercial airlines serve about 500 U.S. cities, "general aviation has access to 5,000 airports across the country. Further, nearly 85 percent of companies using these aircraft are small and midsized businesses; the very kinds of enterprises that create the bulk of new jobs, especially in an economic climate like the one we're currently facing."

In the letter, those officials painted the general aviation industry as one that provides jobs and builds communities, rather than one that shuttles automotive executives to Washington to seek government funds.

Calling his city the "Air Capital of the World," Wichita, Kan., Mayor Carl Brewer noted the impact in the home of manufacturers Cessna and Hawker Beechcraft. "Not only has general aviation manufacturing hit a new low in terms of sales, but since November, Wichita-based manufacturer Cessna has been forced to layoff nearly 4,000 workers in Wichita alone. General aviation manufacturer Bombardier has cut 800 jobs in the Wichita area, and Wichita-based Hawker Beechcraft has announced 2,000 in total layoffs."

The industry's troubles expand well beyond Wichita's borders, as AAAA claims 13,000 U.S. general aviation jobs have been lost in the past year, as sales of aircraft have declined 7 percent. Contributing to the decline in the industry, AAAA noted that very light jet provider Eclipse Aviation liquidated in February, while Piper Aircraft laid off 300 employees, about a third of its workforce and Gulfstream is in the midst of cutting 2,700 jobs.