By Robert Evans
GENEVA (Reuters) – Business aviation, hit badly by the global economic recession, looks to be pulling out of its 2009 nosedive and is heading for strong recovery from the end of this year, a top industry official said on Thursday.
Brian Humphries, president and chief executive officer of the European Business Aviation Association (EBAA), told Reuters clear signals of the rebound had emerged during one of the sector’s key trade shows in Geneva this week.
“Everyone has been saying that we are moving back toward normal life, steady growth. There won’t be a sudden ‘boomph’ but flying activity is already picking up and people are already looking to build up fleets,” Humphries said.
Ed Bolen, chief executive of the U.S. National Business Aviation Association NBAA, said interest in the Geneva show and business activity during its three days backed up this view. “It really has been much more than we hoped for,” he said.
Business aviation ranges from large corporate jets built by companies like Boeing and Airbus through medium-range planes operated by specialist firms to air taxis and small planes used for medical evacuation.
In Europe, studies have shown it contributes $19 billion annually to the economy, or 0.2 percent of GDP, and employs some 164,000 people, while in the United States it contributes around $150 billion annually and generates some 1.3 million jobs.
SERVICE AND EQUIPMENT FIRMS
Closely linked to the sector are service and equipment supply firms ranging from specialized airports, aircraft maintenance and pilot and crew training through finance to communications and plane paint and upholstery.
From 2001, when the annual Geneva show, called EBACE, was first held, the operational sector of the industry was growing by 10 percent annually, but in 2008-09 it contracted by around 15 percent globally.
The Brussels-based aviation air traffic safety body Eurocontrol, said on Monday flights were up nearly 6 percent in the first quarter over the same period in 2009, climbing to 11 percent in March over the same month last year.
The NBAA said that in the United States, the sector’s largest market, flights were 12 percent up in the first quarter.
But officials and analysts attending EBACE, which ended on Thursday, said sales of jets and turbo-prop planes were likely to lag behind the flight pick-up because of a continuing excess of capacity, and a continuing shortage of financing.
However, deals were announced during the show including one by Canada’s Bombardier with the Swiss-based Vistajet for the supply of seven new jets worth $200 million.
Bombardier’s chief rival for the mid-range sector, Brazil’s Embraer, said it was looking for a good pick-up in 2011, while Swiss PrivateAviation, the business aviation division of Lufthansa, announced that it would be adding new, larger aircraft to its fleet this year.
Contracts announced at EBACE, like similar shows elsewhere, are often concluded in advance. But Louis C.Seno, president and chief executive officer of the Chicago-based JSSL airframe and engine cost maintenance company had a different experience.
“We have had people coming in and signing contracts with us on the (exhibition) stand without advance notice,” he said. “That is another good indication of confidence that this industry is picking up,” said Humphries.
Source: THE OREGON HERALD (REUTERS)