NBAA: Somber, Resigned
Trade shows like the NBAA Meeting and Convention running this week in Orlando often have a press day, during which companies make announcements about new products and present assessments of the coming year. Not a lot of new products at NBAA this year and the market assessments aren't especially rosy. In fact, as I toured the floor yesterday, a common question was "what are you hearing?" I've been around the airplane business long enough to know that this is standard fare in an economic downturn. People are understandably nervous and looking for the glimmer on the horizon that represents a turnaround.
I'm not sensing any consensus that it's just around the corner. In fact, at the very first press conference of the day, Hawker Beechcraft's Bill Boisture threw up a graph with an ugly, descending trend line that doesn't envision healthy resumption of growth until 2013. Foreign manufacturers such as Dassault and Embraer are a bit more bullish because they seem to believe sales in the U.S. are depressed by the perception that business aircraft are a symbol of excess and greed.
Indeed, in Hawker Beechcraft's briefing, which had a purposefully military feel, Boisture painted the recovery effort as a war and he pointedly identifed the general press as part of the enemy camp. Whether that's true or not, I think it's a mistake to blame the press for the industry's ills, for if the press drives the public perception that bizjets represent excess, it will also sway the sentiments back to the realization that business airplanes, used wisely, are practical productivity tools.
But in my view, the airplane companies and organizations like NBAA will have far less to do with recalibrating public opinion that will the companies who actually use business aircraft. In this week's Washington Post, the paper reports that even as some banks were receiving federal bailout money, they were increasing executive perks, including personal use of company aircraft. The ostensible reason for this is security—the CEO is seen as so valuable that he can't risk occupying an airline seat to head off for a ski trip in Aspen. Never mind that this is the same CEO who ran the company onto the rocks in the first place. Sorry, but I just can't get onboard with the security and perks-to-attract-talent argument. And I doubt stockholders or the general public will, either. The real damage that perception paranoia does is that it causes some companies to swing wildly in the wrong direction. The Post reported that one company, GMAC, has eliminated business aircraft travel entirely. To me, that makes as little sense as over-the-top perks.
So, try as it might—and it is trying mightily—the solution to the industry's current downturn lies less in Wichita than it does in Atlanta, Chicago, New York, Los Angles and a hundred other places where workaday decisions that could rightly include use of business aircraft are made. Those companies will just have to make those decisions more wisely. The pendulum will swing back, but not soon.