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Greetings!
Just when
we thought we were seeing the light at the end of the tunnel, we realized the
light turned out to be a train. The gulf
erupted in oil, a majority of the newly employed turned out to be temporary
census workers, and the realization of huge tax increases at the beginning of
2011 began to sink in. Then the stock market enthusiasm
of 2009 disappeared. Gallup
Polls reported that the president's approval rating (49%) sank below that
of any of the last 12 presidents (going back to Truman) at this point in their
presidency. Only approval ratings of the
failed presidency of Jimmy Carter (39%) and Johnson (48%) during the thick of Viet Nam were
lower than Obama's today. And then there
was Greece
and the falling Euro. It has been a fun
year.
Most of
the business jet production predictors don't see a real upward trend until at
least 2013. But in the meantime we are still a global economy that relies on
speed, and nothing goes faster than in the air. After reading Bill Garvey's Viewpoint article, Studebaker Time, I was inspired to write The Need for
Speed at Hangar Talk. It's a
little bit of aviation history that I think you will enjoy.
Strategic
planning and innovation are critical for every business, especially at this
point in the business cycle. The Aviation Group has assisted several
hundred aviation businesses, entrepreneurs, and others with innovation and
strategic plans. A year ago in Will
Innovation Lead the Way?, I explained how Outcome Innovation (ODI) has
become a highly respected and successful innovation tool. A product
developed with ODI just won the Gold Edison Award. This was just the
latest of many success stories. In partnership with Strategyn Ventures we are working
with several aviation companies to innovate with ODI. See the coupon at the end of
this newsletter for a one-hour free telephone consultation with me and one
other member of The Aviation Group Team.
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Business Jet Activity Grows
What Moves Must be Serviced
 ARGUS International reported that all business aircraft flight activity climbed 7.9
percent in May compared to a year ago.
This was less than half the rate of increase that was being recorded in
the first quarter of 2010. However, in
that quarter the comparisons were being made to a dismal Q1 of 2009. Aviation
International News commenting on the ARGUS data said, "Activity was positive
across all aircraft types: mid-size jets led with a 13.6-percent increase over
May 2009, followed by light jets (8.3 percent), large-cabin jets (5.2 percent)
and turboprops (3.5 percent). Part 135 charter operators saw their flying climb
by 8.6 percent, while Part 91 and fractional operators each logged a
7.9-percent increase. Notably, mid-size jet activity at Part 135 charter
operators soared by a whopping 24.6 percent." I believe ARGUS's TraqPak data is the most
accurate and timely data on business jet activity. You can find a link to their TraqPak database
in the links section of this newsletter. |
FAA Nixes Airport Drilling
This isn't deep water
 You
would think if you discovered gas on a part of your 9.300 acre airport land and
it could be drilled and recovered safely after jumping through all the
environmental hoops, it would be a slam dunk, especially if the royalties would
balance your budget. Think again. The Pittsburgh
Tribune reported, in a story headlined FAA
says drilling at airports can't be used to balance budget, that gas
royalties, from the gas-rich Marcellus shale formation a mile below Pittsburgh International and Allegheny County
airports, can not be invested in the airports. I fail to see the difference
between rent paid by Starbucks on an airport and gas royalties. I guess the solution is to increase landing
fees, PFCs, and other taxes to balance the airports' budgets. Only in Washington does this make sense. |
The Three Year Tsunami
And the Cat with Nine Lives
 It was in
the fall of 2007 when the worst case of prosecutorial excess struck the general
aviation industry. But it was the week
of June 7, 2010 that the final nail may have been driven into the coffin of one
of the most bizarre and saddest stories in general aviation history.
In 2007 an
aggressive lawyer at the FAA, decided that the operations of TAG Aviation USA were
not legal, and despite perfect safety and operations record, revoked their air
carrier certificate, and assessed the company a $10 million fine, the largest
FAA fine in history. What was
left of TAG Aviation, USA's
assets were sold in early 2008 to JetDirect Aviation, which could not handle
the influx of more than 100 business jets to their operations. JetDirect declared bankruptcy in early 2009,
stiffing employees, customers, and vendors.
A third resurrection, under the name of Wayfarer Aviation, was
attempted by Robert Pinkas of Brantley Partners. Wayfarer was the name of another highly
regarded aircraft management company started by the Rockefeller family. (The original White Plains-based Wayfarer
Aviation had been acquired by TAG in 1999.)
This effort, too, failed, and Brantley investors removed Pinkas from any
management of Wayfarer. Most recently Arcadia Aviation, a relatively new
company, has signed a binding letter of intent to acquire certain assets, which
can only mean the "10 or more" Part 135 air carrier certificate of
Wayfarer. Arcadia
acquired two very small FBOs at, Martinsburg, VA,
and Monticello,
NY. Monticello
is in the Catskill Mountains near the site of
the infamous Woodstock Festival held during the summer of love. Neither of these are centers of business jet
activity. But Wayfarer's customers could
use some love. We will have to wait and
see if this deal closes. Is this the end
of the story? Stay tuned.
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Safety First
But how do we define it?
It
was a year ago when I wrote A Tale
of Two Standards. Not much has
changed to resolve this issue. I
received a few calls about this article and have had numerous discussions but
no one seems to want to comment publicly.
So I have just published a poll on Hangar Talk where you can vote
anonymously. Comments are still
welcome. Just go to the article and at
the end you will find a link for comments at the end of this and every article
on Hangar Talk. I would love to hear
from you on this subject, or about anything else. |
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