No One at NBAA 2008 Wants To Talk About the 800-Pound Gorilla in the Room …
… which is the incredible economic downturn. But it’s there.
Reporting from Orlando, the site of this year’s annual NBAA annual convention, the mood is cautious. Attending a series of press conferences prior to the show opening on Sunday failed to reveal the rush of big orders or new aircraft introductions. This is an industry segment that has been on a high for some 15 years … the run has ended.
The world of business aviation just changed overnight. No one wants to say it; but they recognize it. (At least, in reality, it’s not the airline or airport biz, which are taking much bigger hits.) Yet, all questions related to the potential fallout from the current economic crisis meet with the same answer — it’s a time of caution.
The sky isn’t falling, but the sun is rising in a different direction. No one wants to predict what the end game will be.
The bottom line may be that, corporate aviation is taking a big hit, but not as big a hit as commercial aviation. The bigger fallout is more focused on the FBO sector, which has gone through an incredible buyout frenzy in recent years. Life is changing for that sector. The question that is out there is how committed is the new money that has bought up FBOs in recent years? If the recent ‘money’ buyers aren’t on board for the long term, that may in turn mean opportunities for the committed players.
The sense of NBAA ’08 is this: We don’t know where this is going; we don’t want to even speculate. Yet, for those who lived through the trying times of the 1980s or the early ‘90s, the current economic challenges aren’t as dire. Yet.
Thanks for reading. jfi
John, you always write very directly and in a good way (even reporting bad news). I would like to add,with regard to business aviation, all the owners of single engine or light twins that have found their way to the back of the hangar due to increased fuel cost and now economic crisis that it’s scarry to speculate. To the larger FBO from the bigger cities that live off the turbine to the smaller independent or municipal FBO it is scarry to speculate. Regardless, costs are going up, credit is getting tighter, unemployment is up, and profit margins are down but, this is the USA. The aviation turnaround we experienced for the last 15-20 years was a committment from the regulators (such as ‘94 GARA & deregulation), manufactures (such as BA & Cessna), to the advent and ensuing pursuit of LSA & light jets, and the reducing cost of newer technologies (composites, GPS, glass cockpits, etc). I believe this innovation will push our country further into the lead of aviation as long as we don’t panic and stick our heads into the sand. Good Luck fellow aviation enthusiasts; I hope we reflect to the world what America is all about.