Market Sluggish, Volcano Might Help

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The European Business Aviation Convention and Exhibition (EBACE) opened Tuesday in Geneva and manufacturers are trying to sound optimistic and realistic at the same time as they face the inevitable questions about their market. In a speech at EBACE, Cessna CEO Jack Pelton said the European market is showing signs of improvement and he's hoping emerging markets in Eastern Europe will be part of Cessna's future growth in the region as a whole. "Before the economic downturn, for example, Eastern Europe was a very strong region for us and we are beginning to see signs including Citation sales of that business coming back," he said. Pelton also said the recovery will be a long one, sentiments echoed by Hawker Beechcraft CEO Bill Boisture in an interview with The New York Times. "I think it's premature to call 2010 a recovery year," he said. "The market still feels the way it did at the end of 2009." Gulfstream CEO Joe Lombardo told a news conference the industry is maturing and globalization is an increasingly important factor. Meanwhile, the industry got an unexpected boost from the volcanic eruption that paralyzed much of Europe's aviation industry last month.

The airspace closures shut down airlines because there was no way to maintain their schedules even though it was safe to fly at least some of the time. Business aircraft operations were also affected but with some creative flight planning it was possible to get around Europe in a private aircraft. "The good news for us is that flexibility has value," David MacDonald of charter broker Air Partner told the Times. "In the wake of the volcanic ash situation, we have had requests for urgent travel from Spain to the United States and the Middle East to Southern France, as executives needed to get to meetings which could not be reached on scheduled airlines." The Teal Group's Richard Aboulafia said anything that highlights the advantages of business aviation will help an industry that has suffered from an image problem during the downturn. "Business aircraft have been hit harder by the economic crisis than any other aerospace market," Aboulafia said.