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Aviation News as We See It |  |
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Greetings! I will see you in Orlando at NBAA. Right, only if we set a firm date and place and then there is a very good chance that one of us will be deflected by someone else in the crowd of 30,000 plus. After watching this event grow over the last 25 years and quickly becoming overwhelmed by its size, I have found it is best to have a flight plan. It gives me a chance to focus on what I want to accomplish. Nevertheless, the plan is rendered useless, usually by mid-morning of the first day, by the many attractions and distractions. How did we do this show only a few years ago without cell phones? So look for me. I will be the guy with the cell phone glued to my ear. I will be easy to spot, right? Jim Haynes
“How will you be sure the NAS can accommodate The Mosquito Fleet”? This was the question Senator Ted Stevens from Alaska posed to Mary Peters, the new Transportation Secretary, at her recent confirmation hearing. Of course he was referring to the new crop of VLJs that are about to be hatched. Good question. The new air taxi companies that lie in wait for the assembly lines to crank up say they will operate in the “in-between altitudes” where piston powered “mosquitos” can not fly and in the airspace airlines and business jets avoid for fuel efficiency and speed reasons. But what goes up must come down. (And for airplanes vice versa.) When they come down or go up, all airplanes must go through the funnel over airports. It is the narrow part of this funnel that needs attention as well as the upper altitudes. Technology offers part of the solution, but management of the whole ATC system is perhaps the biggest problem. Let’s not forget that we need to figure out how to pay for all this. Did someone say user fees?
"Cirrus Taking Jet Orders" is the headline in a recent article in AVweb, the online general aviation ezine. AVweb reports on an interview with Cirrus VP of sales, John Bingham, that Cirrus is planning to build a single-engine jet that will cruise faster than 300 knots, up to 25,000 feet, with a range of 1,000 nm and cost less than $1 million. The all-composite CirrusJet will be outfitted with an emergency ballistic parachute recovery system. All this will be announced Wednesday afternoon October 18th at NBAA. Bring your check book. $100,000 will buy you a delivery position.
And speaking of NBAA, Piper Aircraft is leaking news of its new next-generation aircraft to be announced at the NBAA trade show. Honda Aircraft Company announced an alliance with Piper Aircraft this summer at Oshkosh while showing off the new HondaJet. Marketing the HondaJet is being discussed with selected Piper dealers. The new Piper aircraft will be a single engine jet-powered aircraft priced between the Piper Meridian turboprop and the twin jet HondaJet. The PiperJet joins a growing list of very very light jets (VVLJs).
There is a tidal wave that started in Australia and has already reached the USA. Known as the Macquarie tsunami, this wave swept past Spain and picked up Ferrovial, the giant Spanish building company. Ferrovial bought BAA this past summer. BAA operates Heathrow, Gatwick, and Stansted in London, plus four other UK airports. Macquarie Bank owns not only the Sydney airport, but also Brussels, Rome and many others in almost every non-third world country except the US. For the last couple of years Macquarie has established a stronghold at US airports by acquiring and building the Atlantic Aviation brand, which is now the second largest FBO in the states. Chicago is considering privatizing Midway airport. A number of others like New Orleans Lakefront and New York’s Stewart Airport are part of the FAA’s pilot program. The FAA pilot program envisions the airport being leased to private companies to operate and develop. Stewart Airport has an RFP on the street. I understand how commercial service airports generate revenue and can show the capital markets an attractive ROI. General Aviation airports will present a bigger challenge.
Vaughn Cordle, a member of The Aviation Group, will be making his first trip to NBAA to see what these new VLJs look like. Vaughn’s day job is flying 777s for a major airline across the ponds on both sides of the USA. He is a highly regarded airline analyst and is interviewed regularly on CNBC, Bloomberg News, CNN, etc. He recently opined on CNBC that the US airlines do not have the ability to earn their cost of capital over a business cycle; but he predicted $4.5 billion in profits for the major airlines in 2007 if oil prices stay around the $60 range. As usual Vaughn is out ahead of the crowd of other airline analysts. I will be showing him around the NBAA floor. Find us and he might tell you his two favorite airline investment opportunities. Hint, neither is a US flag carrier.
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