AVwebFlash - Volume 12, Number 15b

October 23, 2013

AOPA Moves Into Commercial, Flying Club Insurance

AOPA Insurance Services has convinced some of its underwriters to allow flexible coverage for club and partnership aircraft. In an interview with AVweb at NBAA 2013, Bill Snead, the new president of the company, said there are myriad scenarios to aircraft ownership, including the potential for rental, that presented insurance challenges. He said AOPAIS has been talking to the underwriters about the issues and an announcement will be made next week. Meanwhile, the insurance arm of AOPA rolled out a new program to cover aviation businesses. 

In a news release, AOPAIS said it's moving into the commercial sector to offer its competitive rates to "fixed-base operators (FBOs), charter and agricultural aviation businesses, flight schools, repair stations and a variety of other aviation enterprises." The release said the expansion is part of its mission of "protecting the freedom to fly by offering insurance coverage to businesses that work at the heart of general aviation."

Podcast: Insurance for Flying Clubs

Next week, AOPA Insurance will announce new insurance products aimed at collective aircraft ownership.  AVweb's Russ Niles spoke with the new president of AOPA Insurance, Bill Snead.

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Flexjet Orders 30 More Lear 85s

Bombardier chalked up a $600 million aircraft order at NBAA on Monday but the customer was a familiar one. Flexjet, which until six weeks ago was owned by Bombardier, converted an option for 30 Learjet 85s to a firm order. The option was part of a huge order made by the new Flexjet LLC when its parent company, Directional Aviation Capital, purchased the fractional business from Bombardier on Sept. 5. In that order, Flexjet LLC placed firm orders for 115 aircraft and options for 150. In the deal announced Monday, Flexjet LLC also took another 20 options for Learjet 85s so its full order, if exercised, would be for 265 aircraft worth up to $5.6 billion. Flexjet LLC is the launch customer for the Learjet 85 and Directional Aviation Capital principal Kenn Ricci said the "curb appeal" of the mostly-composite mid-sized aircraft prompted the early option conversion. He told a news conference in Las Vegas Flexjet LLC has also created a new interior design for the aircraft that will be exclusive to Flexjet. 

Meanwhile, Bombardier has rolled out the first flight test aircraft in Wichita and is expecting the aircraft to fly before the end of the year. The smaller Learjet 75 got caught up in the U.S. government shutdown and is still awaiting final certification by the FAA. There are finished aircraft ready for delivery once the paperwork is complete.

Podcast: Flexjet Flies Solo

In September, Bombardier announced Flexjet, its fractional arm, had been sold to a group of investors.  The investors promptly ordered up to 245 airplanes (firm orders and options) and on Monday added another 20 aircraft options.  AVweb's Russ Niles spoke with Flexjet President Deanna White about how the flurry of transactions positions Flexjet for the future.

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New Winglet Design On BBJ

Boeing Business Jets brought an aircraft to NBAA in Las Vegas that looks a little unusual, but may become a common sight at airports everywhere. The aircraft is fitted with Split Scimitar Winglets from modification shop Aviation Partners. The winglets have an upswept section that has a curved pointy tip and another shorter section angled downward. Joe Clark, CEO of Aviation Partners, told a news conference in Las Vegas that the winglets give at least a 2.5 percent boost in range over conventional winglets in testing. That's an additional 200 miles on the BBJ. Clark said there have been 733 sales so far to airlines for retrofitting their newer Boeing 737s. 

Meanwhile, Boeing Business Jets President Capt. Steve Taylor says the company would like more business but it's happy with its position in the market. The company dominates the large business jet market and has sold 211 BBJs since 1996. By the end of the year, the company will deliver its first BBJ based on the 787-8 and it's now supervising the completion of four 747-8 business aircraft. Those airplanes offer 5,000 square feet of floor space on two floors with up to 14-foot ceilings in some sections of the aircraft. By 2018, BBJs based on the 737 MAX will be delivered.

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Gulfstream Continues Growth Pattern

Although many aviation companies are suffering from five years of depressed markets, Gulfstream is reporting solid financial results on the strength of some popular new designs. At a news conference at NBAA 2013 in Las Vegas, the company reported revenues of $3.83 billion in the first half of 2013 (up 19 percent over 2012) and earnings of $699 million (up 32 percent). The company has added 1,700 employees to its Savannah operations, opened a base in China and added service and parts facilities in the U.S. and Asia. Much of the recent success can be attributed to the entry to service of the G650 and G280. 

Gulfstream is building G650s as fast as it can but the $65.5 million aircraft, which is backlogged to 2017, is a hefty part of the total backlog of $14.7 billion currently on the books. As AVweb reported earlier this week, the G650 is so popular that early deliveries are being resold for a 10 percent premium. A used G650 recently sold for about $7 million over the sticker price and a query about that deal drew some knowing smirks from the Gulfstream executives at the news conference. Scott Neal, head of Gulfstream sales, said that if the report is true the transaction "set a record for residual value in a business aircraft. It is very much in demand."

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Video: Pilatus PC-24 Business Jet Debut at NBAA

Pilatus Aircraft has seen great success with their PC-12 single-engine turboprop.  The manufacturer is now venturing into the jet market with the PC-24 twin jet -- a corporate comfort aircraft capable of flight in and out of unimproved airstrips.

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Video: Eclipse 550 First Delivery at NBAA 2013 in Las Vegas

Eclipse Aerospace president Mason Holland delivered the first Eclipse 550, boasting new upgrades to a customer at the National Business Aviation Association exhibition in Las Vegas, October 22, 2013.  The aircraft hosts avionics upgrades and enhanced and synthetic vision systems.

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Military Airshow Teams To Return For 2014

The Navy's Blue Angels and the Air Force Thunderbirds will return to a full airshow schedule for the 2014 season, military officials announced this week. "Community outreach is key to connecting Americans to the military," said Cmdr. Thomas Frosch, flight leader for the Blue Angels. "Our performances provide a unique opportunity to inspire millions to connect with and support our service members." The teams have been grounded since this spring, when federal spending cuts took effect, and many aviation events around the country were canceled when the teams and other military attractions were unable to appear. The Blue Angels' 2014 schedule (PDF) includes Sun 'n Fun, in Lakeland, Fla., in April. The Thunderbirds team, which canceled a visit to EAA AirVenture this year, has not yet released a 2014 schedule.

The Blue Angels will perform at 65 shows at 34 locations across the U.S. in 2014. The Navy's skydiving team, the Leap Frogs, also will return to a full schedule next year. Military flyovers, which in the past have numbered as many as 1,000 per year, will be reduced, said Wendy Varhegyi, of Air Force Public Affairs. "We're trying to be as fiscally responsible as we can be, which is what the American people want," Varhegyi told ABC News. "Our focus will remain with airshows primarily." Overall, the military will cut its number of public outreach events by nearly half, for a savings of $1 billion over the next decade.

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An Unusual Performance By Cessna's CEO

I think one of the defense mechanisms we in the aviation industry have developed is the ability to not take ourselves too seriously. By many normal standards, it can be a preposterous business where the leadership roles are populated with wide-eyed dreamers who almost invariably make their money in more mundane enterprises and promptly squander it on their passion. 

We tolerate it, sometimes even celebrate it, because it occasionally works spectacularly for the benefit of the whole industry. Where would the homebuilt industry be without Vans? What if the founders of Garmin had stuck to the far more profitable marine and consumer sectors? What if Bill Lear had settled for a piston twin?
 
And what would we do without Cessna? It's a question that entered the collective consciousness when Cessna's current CEO Scott Ernest stared down some aviation media reps and pretty much hung some of his executives out to dry in an uncomfortable exchange at NBAA in Las Vegas on Monday. 
 
We're the first to admit that aviation journalism is not generally a hardball affair. We're mostly here to relay the positive developments that companies announce and keep pilots and others in the industry abreast of the latest and greatest. We do have the ability and the responsibility to ask some tough questions at times and it's squarely in the CEO playbook to deal with those issues in a manner that best reflects their company.
 
In my opinion, Ernes gave petulant and peevish answers to legitimate questions about the future of the Skycatcher and Skylane diesel projects on Monday and these were as surprising as they were unsettling. It's no secret that the Skycatcher program has been in trouble since the first one got off the ground in 2006 but Ernest's snippy and dismissive "no future" comment was, in my view, both uncalled for and ill advised for a company that still has about 100 of the little airplanes left to sell. Those who have the responsibility to turn those airplanes into money must have been even more surprised than us.
 
Ditto his dismissal of questions surrounding the off-airport landing of the diesel last month. There are a lot of people watching and hoping that a name like Cessna can create a new heavy fuel aircraft that works in the real world,  just like its entry into the LSA market helped legitimize that part of the industry. Part of that means addressing the bumps and bruises of aircraft development with honesty and, frankly, a little dignity.
 
And that was part of the problem with his performance Monday. CEOs come to NBAA, in part, to put their companies in the best light. Ernest, in my estimation, did just the opposite. He clearly likes the fast and flashy stuff his company produces but his attitude toward some pretty benign questions about the Skycatcher and Skylane suggested contempt and derision for at least some parts of his company and his staff. It was an embarrassing public episode that should get the attention of the Textron board, in my view.
 
But because it was Cessna, that attitude reflected not just on the company but on the industry as a whole and that was the other part of the problem. Like it or not, when someone takes over the biggest little airplane company in the world, his responsibilities extend far beyond his own shop floor. Cessna is an industry leader and should behave like one.
 
Ernest knows that because he told me so. Two years ago when he was newly installed in his job I interviewed him at NBAA and commented that it was important for us to get to know him because "as Cessna goes, so does GA." He agreed enthusiastically and said: "That's absolutely right; as Cessna goes, so does GA."
 
Which brings us to the fact that Ernest is not a pilot and based on his post-press conference exchange with one of the reporters who challenged him during the news conference, appears to have little interest in becoming one (even though he has said in the past that he intended to learn to fly). Now, it's quite possible that Textron chose Ernest to replace Jack Pelton  specifically because he is not a pilot and the board wanted someone whose judgment wouldn't be clouded by passions or perceived alliances that might not be productive to the Textron bottom line.
 
Fair enough, but the pilots before Ernest who led Cessna to its current position did so in part by using that passion and those alliances to their company's advantage. When they made the inevitable tough decisions necessary in any business, they did so with the respectful understanding that their actions would be felt throughout the industry. As pilots, they were part of the world that could be shaken by an announcement like the death of the Skycatcher.
 
Even so, it's probably not absolutely necessary for the leader of Cessna to be a pilot. He or she should, however, at least be polite.
 
Join the conversation.  Read others' comments and add your own.

Video: AVweb's China Tour

This week, AVweb is attending the China International General Aviation Conference (CIGAC) and the annual Aviation Training Congress China (ATCC).  We'll have coverage all week of our visits to Beijing and Xi'an.

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Video: China Looks to the EU for Airport Design Help

As China struggles to expand its aviation infrastructure at a breakneck pace, it's seeking help from every corner of the globe, and the European Union is stepping up expertise in airport design.  AVweb's Tim Cole interviews Norbert Gronak of Aviare Consult GmbH about China's airport design needs.

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Video: Mooney's Fortunes Tied to China

A Chinese-based company recently bought Mooney and pledges to restart production, keeping the company at its Kerrville, Texas headquarters.  In this exclusive interview from AVweb's CIGAC/ATCC coverage of Chinese aviation, Jerry Chen reveals new details about where Mooney will be headed.

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Video: Autogyros at China's Xi'an Aviation Trade Show

In Europe, autogyros are a mainstay in the recreational aviation market, and the same trend may develop in China.  In this exclusive video report from the China International General Aviation Conference in Xi'an, AVweb's Tim Cole reports that autogyros may be uniquely suited to China's developing GA market.

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Video: Xi'an Is China's Wichita

Geographically, technologically, and spiritually, Xi'an is poised to be the heart of general aviation in China's emerging GA market — much as Wichita, Kansas is to the U.S. GA scene.  Perhaps that's why Wichita is opening a bureau in Xi'an.  AVweb spoke with Cessna's William J. Schultz and Wichita mayor Carl Brewer at the China International General Aviation Conference 2013.

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Video: China Flightline Sampler

China is building new, modern, and capable airports at a blistering pace, and many of these will eventually serve the developing general aviation market.  AVweb's Tim Cole visited Peucheng Airport in east central China and filed this video sampler of what's on the flightline there.

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