““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
15 Business Aviation Milestones
Business aviation would be nowhere if it weren't for the pioneers who jump-started aeronautical development in the first part of the last century. The Wright Brothers, Charles Lindbergh and the early air racers who squeezed every ounce of available technology into what were then state-of-the-art airplanes all deserve much credit. Still, it wasn't until after World War II that private aviation blossomed, aided by a confluence of a large pool of job-seeking pilots and technicians, plenty of redundant military transport planes and a growing appetite among business travelers for safe, reliable and swift transportation. Here's a look at 15 turning points that helped get us to where we are today.
1. Dee Howard Begins Converting Military Transports (1947)
An Air Force mechanic during World War II, Durrell Unger "Dee" Howard started Howard Aero in San Antonio in 1947. Howard and his crew began by maintaining twin-engine Lockheed Venturas but soon concluded that a few careful modifications would improve the airplane and make it more attractive to business travelers. The company dubbed its first conversion the Howard 250 because of the airplane's cruising speed-250 mph-which at the time was pretty fast for an airplane with a piston radial engine. Other models followed, including the Howard 350 and culminating in the Howard 500, which featured a pressurized cabin that would henceforth be de rigueur on business aircraft. Howard's timing was ill-fated, however, as the Model 500, most of which his company built in-house, didn't receive FAA certification until February 1963, well past the 1959 certification of the first purpose-built business aviation turboprop, Grumman's GI.
2. A Business Aviation Association Forms (1947)
On May 17, 1946, a small group met at the Wings Club in New York City to hear Bristol Meyers vice president Palmer Lathrop discuss the need to protect business aviation's interests and guard against excessive government regulation. Lathrop invited company presidents to the next meeting, and the 16 people who attended it agreed to form an association, which was incorporated on Feb. 13, 1947, as the Corporation Aircraft Owners Association. The group-which later changed its name to National Business Aircraft Association and then National Business Aviation Association-held its first membership meeting on Sept. 24, 1947, at New York City's Biltmore Hotel, with 19 company members attending. Today, the NBAA is perhaps best known for its annual convention, but the association does much more for its nearly 8,000 members. Current projects include fighting the Transportation Security Administration's effort to impose airline-like security regulations on business aircraft and partnering with the General Aviation Manufacturers Association on the "No Plane, No Gain" advocacy program.
3. The First Business Jet Debuts (1954)
In an ironic twist, the first business jet was what now would qualify as a very light jet (VLJ), the aircraft type that some industry observers recently predicted would soon "darken the skies" and spawn huge air-taxi businesses. None of that has come to pass, and perhaps the VLJ makers of today could benefit from a history lesson. The Morane-Saulnier Paris Jet, a four-seater that could fly 1,000 miles at 350 mph in pressurized comfort, made its first flight on July 29, 1954, attracting the interest of Beech Aircraft. Beech signed up as U.S. distributor of the Paris Jet but sold only two, including one to Henry and Louise Timken. The Timkens themselves were key players in the development of the aerospace industry, manufacturing the bearings found in nearly every wheel, engine and gearbox that took to the skies.
4. Lockheed Launches the Bizjet Era (1957)
The business jet era began in earnest when Lockheed decided to build a jet for a military competition and ended up with an attractive airplane for business travelers who saw the benefits of owning their own jets. Later iterations of the four-engine Lockheed JetStar, which first flew on Sept. 4, 1957, added more efficient engines. Production ended in 1979 but the robustly designed jet has had a long and fruitful service life, with some models still flying today. What is sad about Lockheed and the JetStar is that the company was arguably first to market with a practical business jet, yet it never explored the huge opportunities that other manufacturers eventually exploited. If Lockheed had but tried, there might have been a whole family of JetStar-inspired designs competing with the Cessnas, Beechcrafts, Bombardiers, Embraers, Falcons, Gulfstreams, Hawkers and Learjets that serve the market today.
5. Bill Lear Introduces the Lear 23 (1963)
Bill Lear has been described as part engineer, part showman and a tireless promoter of his endless list of ideas. His Lear 23, adapted from a Swiss military jet, was the smallest, lightest, best-performing non-military aircraft ever built. When test pilots Bob Hagen and Hank Beaird took off from Mid-Continent Airport in Wichita, Kan., on Oct. 7, 1963, they helped launch the age of small high-performance business jets. Now Bombardier, which smartly bought Learjet in 1990, is one of the largest jet manufacturers, with a diverse product line, from smaller Learjets to the ultra-long-range Global line and air transport regional jets.
6. Pan Am and FedEx Popularize the Falcon 20 (1963)
Two major airline companies are responsible for helping to launch the fabulously successful line of Falcon jets. Pan Am became the initial U.S. distributor for the Mystère (later renamed Falcon 20) after it first flew on May 4, 1963. Then college student Fred Smith, whose paper on a new type of package-delivery company earned a C from his professor, launched Federal Express with a fleet of 31 Falcon 20s. Unlike Lockheed with the JetStar, Dassault didn't rest on the Falcon 20's laurels and instead developed the Falcon brand into a large family of business jets that today is pushing the performance and technology envelope.
7. Beech Designs a Bestseller (1964)
Business aviation isn't all about jets and Beech Aircraft moved up the aviation food chain from powerful piston twins to the natural next step, a twin-engine turboprop. Now the people who run Hawker Beechcraft are mighty happy that Beech Aircraft went the turboprop route because while the recession has seriously hurt new jet sales, turboprops remain a bright spot in the market. The King Air 90's first flight occurred on Jan. 24, 1964, and the lineup has since grown into a huge family, from the latest King Air C90GTi to the venerable yet modern and roomy King Air 350i. Of course, Hawker Beechcraft builds jets, too, but it's the King Air family that has built the company's fortunes.
8. The Gulfstream Era Begins (1966)
The Gulfstream II-the company's first jet and the first of what would become a long line of large-cabin jets-made its debut flight on Oct. 2, 1966 in Bethpage, N.Y. More than 40 years later, Gulfstream's "G" series jets have captured the imaginations of buyers worldwide as Gulfstream Aerospace prepares the latest model, the G650, for certification.
9. Embraer Enters the Aerospace Market (1968)
When a Brazilian company first flew its Bandeirante twin-turboprop commuter airliner on Oct. 26, 1968, few could have predicted that the firm would become the world's third-largest aircraft manufacturer. Now Embraer is closing in on Cessna and Hawker Beechcraft with a product line that is filling niches unexplored by its competitors and pushing the technology envelope with new fly-by-wire flight controls for the latest Legacy 450 and 500 models.
10. Cessna Introduces the Citation 500 (1969)
Cessna's engineers have derived an amazing number of airplane models from the basic Cessna Citation 500, which first flew on Sept. 15, 1969. Hardly a year goes
by that Cessna doesn't announce another new Citation, along with what always turns out to be an accurate prediction of performance, specifications and certification schedule. The company has perfected the complicated process of developing new airplanes.
11. Garrett Spawns an Engine Family (1970)
Business aircraft would never have proliferated without the motive power to make them fly, and the company founded by Cliff Garrett (who died in 1963) ended up developing one of the most successful business jet engines in history: the TFE731, which debuted in 1970. If you've flown in a business jet, it is highly likely that you've experienced the smooth whine of what is now the Honeywell TFE731.
12. Corporate Aviation Gets Its Own Helicopter (1977)
In the early days, helicopters were utilitarian and not particularly attractive, a perfect example of function over form and not necessarily what you'd want to bring to a crucial business meeting. But Sikorsky broke that mold with the S-76 Spirit (named for the U.S. bicentennial). Arguably the first helicopter designed specifically for the business aviation market, it was sleek and elegant, with an interior to rival that of any corporate jet. From its first flight on March 13, 1977, the S-76 has progressed from the A model to the latest variant, the soon-to-be-certified and more powerful S-76D.
13. Timeshares Come to Business Aviation (1986)
In 1986, a brilliant mathematician and businessman named Richard Santulli launched the company that became NetJets, the first practical and effective fractional-share jet operation. Although NetJets has always had a tough time turning a profit, the company was attractive enough to win the attention of Warren Buffett, and his company Berkshire Hathaway bought the fractional provider in 1998 for $725 million. Now, although NetJets is suffering the effects of the recession (and Santulli resigned from the business in August), NetJets remains the biggest operator in a field that spawned multiple competitors.
14. Global Positioning Systems Debuts (1995)
There may be no better example of government spending generating billions of dollars' worth of business activity and benefitting mankind than the Global Positioning System, which started as an Air Force project. GPS became operational on April 27, 1995, and after the Air Force turned off signals that hobbled the system's accuracy for civilian users in 2000, use of GPS-based products exploded. GPS has not only made driving and flying more convenient but has contributed enormously to flight safety and will be a key part of new air-traffic-control systems that should make flying even safer and more efficient. The accuracy of GPS is also an important factor in Honeywell's development of the enhanced ground-proximity-warning system, designed to help prevent controlled-flight-into-terrain accidents.
15. Cessna Delivers the First VLJ (2006)
By the time Cessna delivered the first very light jet, the Citation Mustang, in November 2006, some industry observers were predicting that a new era of safe, efficient and amazingly inexpensive small aircraft would revolutionize business jet travel. At the peak of the hype, Eclipse Aviation founder and chief VLJ evangelist Vern Raburn claimed more than 2,500 orders for the Eclipse 500 twinjet. Alas, air-taxi pioneer DayJet, which held some 1,400 of those orders, didn't survive. Eclipse itself spent well over a billion dollars and built 259 airplanes before going bankrupt. Eclipse endures, however, as its assets were recently picked up for a mere $40 million by a new company called Eclipse Aerospace. The VLJ era continues, too, with Embraer's Phenom 100 expected to see more than 100 deliveries by the end of 2009, rapidly catching up with the Mustang, which Cessna prefers to call an entry-level jet.