Business > Aviation

Posted on Wed, Oct. 28, 2009

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At NBAA, the focus is on the future

BY MOLLY McMILLIN

The Wichita Eagle

ORLANDO — Wichita’s aviation industry has been battered, but there are signs of encouragement in the business jet market, officials said Monday as the world’s largest business jet show prepares to officially open in Orlando.

Hawker Beechcraft underscored the battle the industry has been involved, with company executives and personnel wearing military flight suits to their news conference.

“We’re on a mission,” Bill Boisture, Hawker Beechcraft’s CEO, said at the 18th annual National Business Aviation Association convention. “Our mission is to prevail against unprecedented market forces; our mission today is to counterattack.”

Boisture noted that the downturn has been especially difficult for Wichita, which has lost 27 percent of its aviation work force in the past year.

He warned of more layoffs ahead. Predictions “for further reductions are real,” Boisture said.

Despite a subdued mood following a year of order cancellations, production cuts and layoffs, company officials were optimistic about the future. That optimism and toughness is “best expressed by saying, ‘We are surrounded and tackling on all fronts.æ.æ.æ. We have plenty of ammo,’ ” Boisture said.

Cessna Aircraft CEO Jack Pelton agreed that the market is showing signs of improvement.

“The phones are starting to ring, which is good,” Pelton said during a media briefing. “The activity level is starting to pick up.”

Business jet usage is stabilizing, people are flying again and used aircraft inventories are starting to decline. Singleengine aircraft sales have been strong, which is a forerunner of recovery in the rest of the product line, officials said.

Still, the nation’s unemployment rate remains a concern, the negative perception of business aircraft is troublesome, and the supply chain has been damaged from the downturn.

“We’re very dependent on a supply chain that supports the industry,” Pelton said. “That supply chain has been rocked hard.”

The world has certainly changed since last year’s NBAA, he said. Most devastating were the layoffs the company underwent as it cut production and staffing to match. With 8,000 employees, its work force has been cut in half. Now, he thinks Cessna is correctly sized for the expected demand for the next three years.

“It’s been an absolute brutal 12 months,” Pelton said. “I think the worst is behind us.”

Hawker Beechcraft officials also have seen interest in new business jets pick up, but it’s too soon to say whether that will translate into sales, they said.

After a year of cancellations and deferrals, the company’s order book has stabilized.

“We can concentrate on selling rather than preserving,” said Brad Stancil, Hawker Beechcraft’s vice president of sales for the Western Hemisphere.

August and September were the best months of the year, said Brad Hatt, head of commercial aircraft.

“Large Fortune 100 companies came back into the market in the last 60 days,” Hatt said.

The NBAA convention will give planemakers an idea of what to expect from the U.S. market, Stancil said.

The international market is stronger, with 70 to 80æpercent of Hawker Beechcraft’s sales coming from outside the U.S.

A number of the company’s international customers are making the trip to Orlando for this week’s show, said Sean McGeough, Hawker Beechcraft’s vice president of sales for the Eastern Hemisphere.

Whether the interest will turn into sales is too soon to say, they said.

Roger Whyte, Cessna’s head of marketing, said that since midyear, some flight departments are beginning to talk once again about their future requirements.

He said Cessna is “hoping we’ll get a few sales” at this year’s NBAA.

A number of potential customers are coming to the show, people who’ve already been in the process of looking to buy. There’s a good possibility of those deals being finalized this week, Whyte said.

“This is not going to be a record show,” he said. “But it’s not going to be that downbeat.”

One of the biggest surprises Monday came from Embraer.

In a briefing culminated with a champagne toast, the Brazil-based planemaker unveiled a new business jet, the Legacy 650, a large, longrange jet with a price tag of $29.5æmillion.

It’s the company’s seventh business jet, the sixth to be introduced in the past four years.

The company began development of the plane last year before the downturn hit. Two prototypes are in a flight test program. The plane is expected to be certified in the second half of 2010.

When the downturn hit, Embraer didn’t consider canceling the program, officials said. Instead, they saw it as an opportunity to face the crisis and to grow, said Luis Carlos Alfonso, Embraer executive vice president of executive jets.