AirportBusiness Blogs

…business aviation interests remain optimistic for the long term. Ed Bolen, president & CEO of the National Business Aviation Association, reports that fuel sales are significantly down for the year. Jet-A is off as much as 20 percent, says Bolen; avgas has dropped as much as 35 percent. While corporates are cutting back their operations and looking for ways to reduce costs, Bolen observes that we aren’t seeing the dramatic elimination of flight departments that has associated past downturns.

Bolen says that what we are seeing is a reflection of the growth in importance in flight departments in the 21st Century business model. Companies use aircraft for numerous reasons – just-in-time inventory; productivity; distribution; customer visits; etc. – and the aircraft is now an integral part of the business.

Bolen also points to the role bizav plays for many smaller communities who are now faced with declining commercial airline service, or the elimination of it entirely. Commerce still needs connectivity to the global marketplace, and that bodes well for business aviation.

Yet, there is a noticeable lapse in the bullishness of recent times, even in Bolen’s voice. NBAA has been at the center of the bizav boom since the mid-1990s, and its annual convention, slated for Orlando this October, has grown exponentially. The upcoming 2008 event still looks strong, but we’ll likely get a firmer handle on the state of the U.S. business aviation community at that time.

Look for more on our interview with Ed Bolen in the September issue of AIRPORT BUSINESS magazine.

Thanks for reading. jfi

By now you’ve heard, read, seen the TSA O’Hare story. We don’t have all of the facts yet, but this story, if even half true, is horrific.

As the story goes, TSA “inspected” several parked American Eagle airplanes around four in the morning at O’Hare. Reportedly the inspectors climbed up high on the airplane, using pitot tubes, angle-of-attack sensors, and TATs for handholds. Damage occured (duh!), and some 40 flights were delayed while the airplanes were inspected and repaired as necessary.

So many questions must be asked. Who authorized this? Is TSA really authorized to climb all over airliners—or even touch them—without airline personnel on hand and watching? What kind of “training” could leave a TSA person believing that a pitot tube is a good handhold?

If this story is even partly true, serious changes must be made quickly. This is unbelievably stupid and terribly dangerous.

If the story is true, the TSA damaged the very airplanes it is supposed to protect. We just can’t have this.

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… with the announcement this week that it has agreed to acquire Zurich-based Jet Aviation from Permira Funds for some $2.25 billion. According to a GD release, the acquisition has been approved by the boards of both companies and should be completed by the end of 2008. At a time when the news is dominated by foreign investors buying up U.S. airport-based businesses, it’s interesting to see a U.S. firm go the other direction.

General Dynamics, which also owns Savannah-based Gulfstream, in one move now has access to a global network of first-class fixed base operations that it owns. That includes FBOs in the Middle East, China, and Russia, which Jet Aviation has been adding in its aggressive growth pattern of late.

Of course, the deal also includes St. Louis-based Midcoast Aviation, recognized as one of the leading MRO centers in the world. It creates a portfolio of aviation companies that are seen as being among the best at what they do.

No definitive word yet on where the ‘new’ Jet Aviation will be headquartered, but it’s probably safe to assume it won’t be in Switzerland. Permira, a European investment firm, had acquired Jet Aviation in 2005 from the Hirschman family of Switzerland. The FBO chain had been headquartered in West Palm Beach for years.

The Wall Street Journal reports that General Dynamics projects the new business unit to generate $1.5 billion in sales and $230 million in earnings next year, and that its MRO capabilities were the primary attraction for the acquisition.

It will be quite interesting to watch where this development leads.

Thanks for reading. jfi

A coupla weeks ago I lamented the fact that USAir et al were charging pax $2 for a bottle of water in flight. I swore I’d never pay it. I’d buy water from an airport vendor and carry it on.

Monday of this week I did exactly that. The vendor water bottle cost $2.25.

I consoled myself by saying that it was probably a larger bottle than those dinky little bottles USAir was selling. It wasn’t. It was exactly the same size.

Damn.

Then I found out that inflight coffee was cheaper than water. And refills were free.

Then I got to thinking about all of the $2 soft drinks I had purchased, and all of the $2 coffee. I don’t even flinch at those prices anymore.

For the return flight I crawled on board and had a cuppa coffee. Then drank three refills!

That oughta teach ‘em a thing or two, I reckon.

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I wonder—how much of TSA’s job is protecting us from terrorism and how much is fighting drugs?

I don’t have an answer, but I do have suspicions.

Frankly, I am willing to go through all the indignities of boarding an airplane—removing shoes, computers, and little bottles of lotion—to fight terrorism, but not to further advance our failed “war” on drugs.

TSA was sold to us as an antiterrorist organization. It cost a fortune in time, money, and hassle. It collects massive amounts of information about citizens. It extends the power of guvmint over citizens. To what extent is it antiterrorist and to what extent antidrug?

I would love to get the answer to my question, but frankly don’t know where to search for the answer. Some have told me to ask the guvmint. Hey, that’s the group I suspect of overstepping its bounds in the first place. Why would they tell me the truth?

“But Ralph,” some say, “don’t you trust the guvmint?”

Nope.

Do any of you know the answer to my question?

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…and an unchecked bag full of animosity and legal threats. That’s pretty much the scenario brought on by Tuesday’s announcement by the U.S. DOT that it will begin auctioning slots at Newark Liberty International Airport. The Air Transport Association says it will sue to stop DOT from implementing a policy that it says is illegal. The Port Authority of New York & New Jersey, which operates Newark, says it will simply refuse to allow carriers using the auctioned slots to use its airport. You can land, but don’t bother taxiing up to a gate.

Of course, slot controls were a major instrument in the regulation of air traffic at major airports (New York; ORD; LAX) for years. It was only back in the mid-90s that the industry moved away from slot controls in favor of free market forces. My favorite (and most confusing) part of slots back then was that the feds basically gave airlines slot space; the carriers later sued to have value given to those slots; and, later they were allowed to use the value of those slots to finance debt, or to sell. When government handouts are merely slots in space, well, one has to question the wisdom.

The current situation also reminds me of the mayoral race in Los Angeles in the 1990s when diverting revenue from LAX to pay for neighboring police and fire protection became a campaign issue, and a major legal battle with DOT. In the end, DOT won out, as one would expect it to with Newark.

Getting back to the concept of wisdom – it seems that is precisely what is needed today. While DOT Secretary Mary Peters could be lauded for trying to do something about congestion at New York’s airports, it’s hard to see the wisdom of reverting back to a concept that is decades old. But then, Robert Crandall is out there calling for the re-regulation of the airline industry.

Thanks for reading. jfi