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Greetings!
 By mid-March the sub-prime mortgage meltdown had over flowed into the general U.S. economy. Some well known experts are calling this the biggest financial crisis in over 40 years. The "Sunday Surprise" of the FED's opening the discount window to investment banks, and the fire sale of Bear Sterns sent shocks throughout every financial market. So what does all this mean for the bull market in just about everything connected to General Aviation and the business jet market in particular? "Worried but so far no big dips" is the general consensus I hear. The OEMs don't appear to be worried. Two big announcements from Cessna and Gulfstream and a bullish FAA forecast say all is not gloom and doom. (See the articles below.) I recently came across an interesting interview with David Davis. David is senior VP of CIT Aerospace - Business Aircraft. David points out that the financial service industry had the worst quarter (4th quarter 2007) since the Great Depression, while business aircraft industry had the best year ever. He also points out that the during the last recession 75 to 80% of all new business jets were delivered in the USA. Today 50% of aircraft orders are non-US orders. You can listen and watch the five minute interview by clicking the above link.
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The View from Cessna
"Our order book is strong'
 Jack Pelton, CEO of Cessna Aircraft told JP Morgan's Aviation and Transportation Conference that Cessna was experiencing a very strong new order book in the first quarter. He remains confident that Cessna will book over 570 new business jet orders this year. In late January Textron's board of directors gave their subsidiary, Cessna Aircraft, the go-ahead to proceed with development of the Citation Columbus, the large cabin concept jet that had been previewed at NBAA two years ago. Cessna has delivered more than 5,000 business jets over the past four decades. The original Citations went into service in the 1970s. The Citation Columbus will compete directly with aircraft at the upper end of the business jet market - some of the larger aircraft built by Gulfstream, Dassault Falcon, and Bombardier.
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Gulfstream's New G650
The largest business jet yet
 On March 13th Gulfstream announced the introduction of an all-new business jet: the Gulfstream G650. This is the largest non-airliner business jet. It will also be the fastest business jet (.925 Mach) with the longest range (7,000 nm). First deliveries are scheduled for 2012 at a price of $58.5 million.
These new large aircraft announcements by Cessna and Gulfstream makes a strong statement about the strength of the business jet market.
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Bad News on the Small End
Adams and POGO Crumble
 Struggling Adam Aircraft threw in the towel and filed for Chapter 7 (liquidation) bankruptcy on February 15th. Adam had been virtually out of cash for months and needed at least $100 million to finish certification of the Adam Jet. Some dreamer may pick up the pieces but in the meantime another aviation dream has collapsed and millions of investors dollars and customer deposit are gone forever.
 As the financial meltdown reached a new peak and the equity and debt markets imploded, POGO Jet the dream of Bob Crandall, former CEO of American Airlines, announced the postponement of an IPO scheduled for this spring. POGO like DayJet built its business model around the Eclipse micro jet. While DayJet began flying paying customers in 2007, I believe this remains a highly speculative venture. I put Eclipse itself in this same category.
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FAA's Annual Forecast
More of the same and then some
 The FAA forecasts general aviation operations to grow at an annual rate of 9.4% for the next 2 years. General aviation fuel consumption is a good proxy for business jet growth. It was not until 2003 that GA burned more than 1 billion gallons of jet fuel. That number jumped to 1.23 billion gallons in 2004. FAA estimates that the 2007 number will come in at 1.65 billion gallons, 2.1 billion in 2010, and up to 4 billion gallons in 2020.
Click on this link for all the FAA Forecasts for FY 2008-2025.
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Global Warming
The issue is not cooling down
 In the last issue I wrote about the the problem with leaded aviation gasoline. It is worth repeating for those of you who missed it as Friends of the Earth (FOTE) is suggesting that the EPA "immediately find that lead emissions from general aviation aircraft endanger the public health and welfare, and initiate rule making procedures to eliminate lead from this emissions source." This is what I said last fall:
Aviation
is beginning to feel the heat (pardon the pun).
Operators of piston powered aircraft, of which 99% must use leaded fuel,
first began to feel the pinch as the manufactures of Tetra-ethyl lead
dropped out of the business. (Only one
still exists.) Any transport vehicle
must be sanitized after transporting leaded fuel before carrying any other
fuel. This month Friends of the Earth issued a proclamation that
says, "Lead emissions from general aviation aircraft endanger public health". The EPA responded with a Notice
of Proposed Rule Making and asked for public comment by March 17, 2008.
Now FOTE calls that NPRM "not a legally adequate response." The Aircraft Owners and Pilots Association (AOPA) has weighed in saying, "any change in the current fuel standard will have a direct impact on the safety of flight."
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