NBAA 2000: A Multibillion-Dollar Baby
SPECIAL REPORT. Now that the 53rd NBAA Annual Meeting and Convention is in the history books, it's time to sit down and tote up the dollars exchanged and the forecasts presented and to take a closer look at the industry snapshot that this year's event presented. Highlights include news from the world of fractionals, more on New Piper's Meridian; a supersonic bizjet, whether Japan Inc. will become involved with general aviation and updates to several development programs.
Remember the late Illinois Senator Everett Dirksen's classic line about money? "A billion here, a billion there, and pretty soon you're talking about real money?" Well, no matter your perspective, real money was in ample attendance at the 53rd annual convention of the National Business Aviation Association, which wound up its October 10-12 run of the Crescent City with the annual awards banquet and entertainment gala Thursday evening.
The tab, before vocalist Natalie Cole brought down the banquet curtain, ran into serious money an convention-day average exceeding $700 million in announced sales, more than $2.2 billion according to some accounts. Maybe delegates and exhibitors couldn't say, "Let the good times roll" in the Cajun vernacular, but they did know it when they saw it. And they saw, heard and read plenty of good times during their days in the Big Easy.
Between new models, new variants of existing models, new equipment for older models and new services that span the spectrum, NBAA 2000 was, indeed, a busy place to work and play. In fact, so vast and so crowded was this convention that by closing day, more vendors than in recent memory seemed genuinely interested in seeing future NBAA conventions grow by at least a day not an inexpensive prospect for the hundreds of companies who collectively spent hundreds of millions of dollars just to meet their market for three days of face-to-face contact, feedback and outreach. NBAA President Jack Olcott conceded that his association would think about the suggestion. Given that so many members come early and stay late to attend various workshops, it may make less difference to the membership than to the exhibitors and vendors.
Since we only skimmed the cream for Thursday's report, let's jump right into one of the best deals in aviation: our wrap-up of NBAA convention number 53.
Z-Z-Z-Z-Zoom: Superheated Sales Reflect The Hot Times At Hand...
Times That Could Cool Without Going Completely Cold
Forecasts of a fine future rang true when planemaker after planemaker announced sales of a dozen of these, a few of those, some more of them and a few of that. Sure, some of 'em are arguably in the funny money category as in, one unit of a company ordering airplanes from its parent. But when you recognize that the ordering unit has its own customers, you also have to recognize that the net result is the same: more people buying more new planes for more use.
And more and more of those new planes are going to customers new to general aviation, thanks to that no-longer-new phenomenon known as fractional ownership multiple owners sharing ownership of individual airplanes that they share with each other and other part-owners of other identical airplanes all of which is operated by a firm that sells the shares, supplies the pilots, performs maintenance and dispatches the planes on behalf of those shareholders.
NBAA-commissioned research predicts that the number of airplanes flown in fractional programs will increase dramatically to nearly 1,700 airplanes from about 400 over the next decade. Other research forecasts a slightly smaller increase by a factor of three or so, instead of four and more. Regardless of the difference, no one we hear from disputes the overall expectation: The already considerable influence of fractional programs hundreds of companies and individuals who never before used business aircraft will continue well into the future.
Here's where an example seems due: Raytheon Aircraft's fractional unit, Raytheon Travel Air (RTA), placed an order at NBAA for 50 of those future Hawker 450s we told you about Thursday along with options for another 25. Not a company to neglect any of its parent's products, RTA also penned an order at NBAA for 22 Premier I light jets to complement the 49 already on order. Throw in a diverse $80.5-million order for 12 Hawker and Beech models from Mexico's Aerolineas Ejecutivas, and some other sales, and Raytheon netted a whopping 144 orders worth about $892 million, with the options worth another $213 million. See, with Raytheon alone, we're more than halfway to that $2.2 billion, already.
Here's some more of the sales scorecard, as available at the end of the convention:
Gulfstream with an order for 20 of the upcoming GV-SP ultra-long-range jets from Executive Jet Aviation's NetJets program in an $800-million deal that includes a new long-term maintenance plan;
Nearly $140 million in orders for Cessna Aircraft that included everything from a 206 Turbo Stationair on floats to 22 Citations that cover the gamut from CJ1s to the Citation X;
Sino-Swearingen booked an order for another one of its SJ30-2 light jets;
Socata announced a distributor's order for 31aircraft worth about $31million that covers a bit of everything from the TBM700 propjet single to the TB 10 Tobago piston single;
Italy's pride and joy, the Avanti P-180, was back with a new U.S. wing Piaggio America that netted its first sale worth a few million more;
Brazil's Embraer which launched its Legacy business jet, a $19 million variant of its successful EMB-135 regional airliner booked 31 orders worth $589 million, plus another 31 options.
Dibs on the biggest buck-bang for a bird went to the big boys, Boeing Business Jets, with orders for four more, and Airbus, which added an order for one Airbus Corporate Jetliner and an option for a second of the bizjet variant of the A320 for buyer Qatar Airways to put on its charter ramp. The per-plane, finished tab for these birds? A cool $45 to $50 million, apiece. Please, make ours champagne silver with caviar-black trim. All these zeros gave us an appetite and a big thirst.
Sunny Daze: Staggering Backlogs Strengthen Sunny Forecasts
Views May Differ, But There's No Arguing With Realities...
Regardless of whether you buy into crystal ball gazing, it's hard to argue with numbers despite the old line that figures lie and liars figure. When companies up and down the planemaker spectrum report record backlogs whether stated in terms of record dollars, record units, or both and can back up those claims with contracts, it's hard to doubt which way the wind blows.
It blows favorably for the future. For example, Honeywell released a forecast that shows times slowing somewhat in the four years ahead, with deliveries dropping to under $8 billion in 2003 after peaking this year at more than $11 billion.
Not so, says Cessna's executives, citing their own company's record $6.1 billion backlog of more than 782 Citations, 50 Caravans and 335 piston singles; and these sorts of numbers come from almost every corner of the market. Still, some wonder whether the bubble isn't about to burst and the market come back down to earth.
That's doubtful at this point, since folks as diverse as NBAA President Jack Olcott and AvData Inc.'s expert analyst John Zimmerman echo these growth figures, as do private reports from outfits like Honeywell. The market may plateau, growth may even slow. But the growth outlook remains strong, in high single digits, for the decade to come barring, of course, catastrophic events like an economy-busting oil crisis or worse.
...Meanwhile, Another Fractional Player Arrives...
Yes, folks, there's another player in this high-growth market and it's Cessna Aircraft, which partnered 50/50 recently with TAG Aviation USA to launch the CitationShares program around the CJ1and Bravo models. CitationShare Holdings LLC, the $20-million joint venture company, has 50 jets on order already and it barely has an executive staff in place to run the show. And by offering customers the prospect of buying as little as a 1/16th share of two of Cessna's lowest-price models, no less the new fractional program shows the potential to cover a segment of the market well below the radar sweeps of its bigger competitors one of them a big customer in its own right: NetJets.
...While Another New Program Offers No-Buy Shares
Here's a new twist on a proven idea: A time-share program that doesn't nope, does not require participants to buy a share of the airplane. Cartersville, Ga.-based Corporate Aircraft Partners (CAP) is the brainchild of Rolly Bergeson and Tom Keough two aviation veterans from opposite sides of the regional airline industry. Under their vision, CAP offers participants blocks of 200 hours a year in the program's corporate Jetstream 32 aircraft for as little as $75,000 per year plus $25,000 a month and $750 per block hour. If you don't need it after a year, you don't have an investment to sell no depreciation considerations and few hassles.
"Not everybody wants to deal with the investment or the commitments involved in buying a share through the fractional ownership programs," Keough said. "We eliminate that element and offer a product more in line with what's more typical for many business travelers." To meet a six-hour service guarantee, Corporate Aircraft Partners plans to establish centers that are much like airline domiciles starting first with the eastern seaboard and moving west. The operation should have four Jetstreams by year's end, 10 by mid-2001 and up to 20 by the end of next year.
Paying The Piper...
Suma's Soldiers Got Meridian To NBAA 2000 On Time, On Budget
Somehow Thursday, we neglected to mention one of the newly deliverable models on the ramp of the static display: The New Piper Aircraft's hot Meridian single-propjet, which received its FAA certification shortly before the convention. At a time when so many new programs seem unable to adhere to a timeline, New Piper President and CEO Chuck Suma was understandably happy to have the Meridian available for first deliveries on schedule and without busting the company coffers. Yes, the 270-knot propjet still has some certification hurdles to clear but none that should hold up deliveries.
And Meridian deliveries are a major factor in the company's expectation that sales revenue will increase about 50 percent in 2001 to $300 million up from $200 million the company expects to collect for delivering 425 new Pipers this year. Between 40 and 45 percent of that $100 million in revenue growth is based on advanced orders for the Meridian. That's 35 to 40 Meridians, New Piper's biggest gamble since emerging from bankruptcy in the mid-1990s.
Meanwhile, don't hold your breath for yet another hot new model from New Piper in the near future. Suma wants to focus on revamping how the company builds its birds in order to lower costs, reduce cycle times and improve manufacturing efficiency and quality. Of course, there are those rumors of a New Piper jet...
...Elsewhere, A Sound Barrier
Rumors, hopes and dreams of a supersonic business jet didn't perish with the late Allan Paulson, who in 1991 tried to launch such a project in partnership with Russia's Sukhoi Design Bureau. The folks at Sukhoi still lust after such a program and call it possible as is anything when money's available in enough quantity, not something Mother Russia's currently known for.
Now comes Reno Aeronautical Corp. and its Asset yep, a supersonic business jet. Now before you get your Mach meter all wound up, this bird takes a totally different approach to making its Mach 1.6 cruise speed: a straight (as in NOT swept) wing uses a laminar-flow foil design that provides such a low drag profile that company research shows he airplane is capable of making high-triple-digit speeds with one of aviation's most-common mills an off-the-shelf Pratt & Whitney JT8D-219 similar to that used on the 727, 737 and DC-9 rather than by dint of extraordinary power and complicated, low-drag swept wings.
Timeline, according to company president Richard Tracy, depends on launching hardware development. But the numbers do seem reasonable or as reasonable is they get in the hyper-expensive world of big globe-trotting business jets and big-fuel burning SST operations: about $5.35 per mile flown, compared to almost $6.50 per mile for birds like a Boeing Business Jet or Airbus Corporate Jetliner. The price expectation: $57 million to $60 million not 20 percent more than those behemoths of the business jet world.
Meggitt's Magic First TSO'd FSD For Us Light Types...
It's guys like these that keep folks like Honeywell and Collins awake at night companies that come from seemingly out of nowhere and make a mark: in this case, the first fully TSO'd all-encompassing electronic attitude, air-data, navigation and engine-management package for light planes built solely on electronic displays and sensors. The standard panel for the New Piper Meridian is not going to be the last.
...Close Behind: Sierra, Honeywell, And More
Yepper, between the hardware and software flying for Sierra Flight Systems, for BFGoodrich's SmartDeck (see more later) and Honeywell's own take (as covered Thursday by AVweb), it's beginning to look like an all-electronic panel world is fast headed our way. So hold on to that last vacuum or pressure pump you pull off your plane to make the switch; could be a valuable museum piece in a few more years.
Wouldn't You Really Rather Fly A Honda?
Yep, folks, looks like Japanese engine giant Honda Motor has its U.S. research and development arm readying to tackle turbine-engine development. Honda R&D Americas is setting up shop in hangars and offices leased from Atlantic Aero in Greensboro, N.C. The goal: research a new small jet aircraft. And given that the company known widely for its cars, motorcycles, generators, lawn mowers, yard tractors and other applications developed and tested its own light turbofan engine back in 1995 and flew a small jet in 1996 in conjunction with a project at Mississippi State, it's not hard to imagine where this work will lead. Working with engineers at Atlantic Aero, the Honda staff will be looking into lightweight materials, machining technologies, and how to make the most of both areas in development of a new light aircraft.
How About A Toyocoming? A Lycotoyota?
What's in a name, the Bard once pondered. Whatever name might result, industry insiders are intrigued at reports that Toyota and Textron Lycoming are in discussions that could lead to mass production of a new line of light, piston aircraft engines. Between Lycoming's successful boxer engine designs, according to the Japanese media reports, and Toyota's advanced electronic engine control technologies, the team could produce a breakthrough in piston engines that distills the control system down to a single lever. Of course, that sounds familiar. Lycoming is already hard at work with partner Unison Industries on the Epic single-lever engine control system, a blend of the Lasar ignition system with new mixture and prop control management.
Give Us Liberty?
Here's one that may escape any connection to NBAA except for the news announcement. Scaled Technologies, of Montrose, Colo., has been pegged by Liberty Aerospace as the company that will build up to 400 new XL-2 piston singles starting as early as 2002. Many AVweb readers have heard of the Europa composite two-place kit airplane, through coverage of Sun 'n Fun and AirVenture fly-ins but never felt the urge to build, despite any attraction they may have had to the model or its price. Well, keep an eye out for the Liberty XL-2, a new two-place design scheduled for certification by the end of 2001. Powered by the popular 100-horse 912S Rotax four-cylinder, the XL-2 is being promoted as a 120-knot two-seater with tricycle landing gear and a bubble canopy. Look for more on this $92,000 single next week, after we have a chance to examine the mock-up expected at AOPA Expo in Long Beach Oct. 20-22.
After staying afloat for almost two years while revising its proof-of-concept prototype and raising more funds, Visionaire is still moving toward development and certification of the single-engine Vantage but we're still a ways out from frequent sightings of the forward-swept-wing composite. According to company sources, work is continuing to complete proof-of-concept flights with hopes of test flying two conforming prototypes beginning late in 2001. Engine and panel changes have been made to improve the utility and serviceability of the Vantage. Completion of a 1,500-hour certification program should take another 12 months, according to chairman Jim Rice, with first deliveries to come shortly afterward. The company already has a factory ready and waiting in Ames, Iowa.
The folks at Eclipse made enough of a stir with talks of the Fusion Stir Welding process they plan to use to make airframes for their debut product, the six-place, under $850,000 Eclipse 500 twinjet, to have little interest in confirming rumbles that a larger model is already under consideration. But, as one noted, when was the last time you saw an airplane company hang its entire existence on a single model? Hint, hint. Expectations are that the timing of any second model would differ little from the timing exhibited by fledgling planemakers Cirrus Design and Lancair, which are both following their debut models with more-powerful versions.
No better example of the above exists than Williams International, which has built one of the most dynamic powerplant companies around on the basis of engines developed for the Boeing cruise missile. The latest rundown of Williams powerplants ranges from the FJ44 used on the CitationJets, the Premier I and SJ30-2, to the EJ22 going on the Eclipse 500; with the FJ22, the FJ33 (first run back in July), and models designated TSX-1 and TSX-2 in development. These guys could become light general aviation's biggest fans.
Pratt & Whitney Canada (PWC) continues development of its own down-size powerplant, the diminutive PW600, first broached at NBAA last year in Atlanta. A full-scale demonstration program begun during AirVenture is still going on and complete validation of the basic core should be complete by the end of next year. With thrust ranges from 1,000 to 1,200 pounds, 1,500 to 1,800 pounds, and 2,200 to 2,500 pounds, PWC intends to cover most of the ground currently dominated by Williams.
An Imminent Leap
Sino Swearingen executives smiled even more than usual at this year's NBAA convention, thanks to knowing that back home in San Antonio crews were nearing the final preparations for the first flight of the first conforming prototype. And right on the latest schedule but not the schedule Ed Swearingen anticipated when he launched the original SJ30 program back in 1987. Shown and flown at Paris in 1991, money and development problems pushed back efforts to clear many of the hurdles until the fast, innovative light jet had been completely lapped by Cessna's original CitationJet. With the arrival from Beech of current president Jack Braly, the program was recast, the airplane stretched, its numbers improved, and the proof of concept demonstrator reworked into a reflection of the SJ30-2. Rollout of the prototype a few weeks before NBAA put the company over yet another hurdle and headed into the stretch known as final certification. That first flight could happen any time now and we'll keep you apprised of when it happens.
Waiting In The Wings
Century Jet, which made its presence known at NBAA in 1993 and was re-launched with a new configuration in 1998, seems closer to the reality of flight, according to company president Bill Northrup. Similar to what occurred with Sino Swearingen and Lancair, the bucks to make the bang could come from Taiwan specifically, the Aerospace Industrial Development Corp. which appears ready to sign on for about $25 million of the estimated $60 million needed. Success in funding still puts final certification and the onset of deliveries of the Century 100 somewhere out in the three-year range.
Thursday, we mentioned the FAA's approval of an in-flight email system for business jets and today we want to tell you about another, this one from the leader in in-flight entertainment gear, Airshow Inc. The new AIRSHOWM@IL (tm) received its first STC and PMA from the FAA after tests in a Falcon 50 fitted with the AirCell and Universal Aero-M SATCOM phones. Each cabin seat of the jet has its own Ethernet port to attach a computer to the LAN installed on the jet and there's even wireless access and a printer/scanner. Yet another step toward never being able to escape the office.
Online And Lovin' It
Bombardier Aerospace moved into the e-commerce arena earlier this year by purchasing Skyjet.com, a fledgling enterprise created to connect charter customers and charter provides in the virtual world in much the same way Priceline.com has connected paying passengers and the airlines. But it doesn't end there. Bombardier is also offering its clients and customers with new online services to track aircraft maintenance, provide a secure site for records, to manage flight departments, follow flights, order spares, and more.
As Reported Earlier
Readers of AVweb's coverage from AirVenture 2000 should remember the news BFGoodrich generated upon the launch of its new SmartDeck Integrated Flight Display & Control System yup, another all-flat-panel system for light aircraft. In an example of how general aviation markets overlap, BFG brought its prototype SmartDeck demonstrator to NBAA a Beech C90 King Air, fitted with the equipment. Designed to work as a single 10-inch flat-panel display, or with up to four in all, SmartDeck replaces conventional gyros, dials and gauges, as well as all the sensors that generate data for the display. Along with the out-the-window, Highway-in-the-Sky symbology all these systems share or mimic, SmartDeck is also being developed to provide pilots with a synthetic vision system for ground operations and instrument approaches.
Between the systems coming from Meggitt, Sierra Flight Systems, Honeywell and BFG, flying blind never sounded so good. Please pass the DVDs.
The End Is Here
That brings us to the end of the tip of the iceberg on this one or, to the bottom of the etoufe, to keep this in Crescent City vernacular. What more we can say and tell, we may not get to work in later like the ambiance of Cessna's wind-blown, fireworks-studded gala, a sternwheeler cruise powered by Rolls-Royce (money wise, at least) and other aspects of business aviation's most-involved convening for in the Big Easy.
But fear not, New Orleans fans. There are barely 11 months to go before NBAA convenes its 54th meeting, and once again the throngs will fill New Orleans' French Quarter for another fling. If you can wait until then, we know the news will change, if not the food, the street artists, the throngs staggering along Bourbon Street, or the coffee and beignets of the Café du Monde. So, if you didn't get your fill this time, just sit tight for a few months.
Meanwhile, let the good flights roll: AVweb will be back at you in another week from AOPA Expo.