““The charter industry needs to become much more efficient…We need to take a page from the airlines’ code-sharing agreements…Part 135 charter [operators] could review each other’s schedules, use each other’s airplanes.” ”
A Peek Ahead
After bottoming out last year, business aviation appears ready to start growing again as the economic climate improves. The next five years should be interesting, and BJT asked industry experts to comment on what the field will look like by 2015. For the most part, they painted an appealing portrait. Here are some predictions:
1. The industry will be healthier.
Forecasters have dialed down pre-recession optimistic views to an arguably more realistic outlook of stable sales and deliveries of business aircraft during the next 18 months followed by gradual growth. "We recognize that business aviation closely tracks the economy," said National Business Aviation Association president and CEO Ed Bolen.
Said Roger Whyte, Cessna's senior vice president of sales and marketing, "After a downturn, economies do gather pace. People get creative and economies start to grow again."
Cessna expects growing interest in countries that haven't cultivated business aviation, and Bombardier Aerospace also anticipates that will be the case. "We expect the global economy to continue growing," said Bombardier Business Aircraft manager of industry relations Leo Knappen, "with a real GDP annual growth rate of between 3 and 4 percent over the next five years. The strongest growth will be in emerging economies such as China and India. Business jet fleets in some of these markets are relatively small, so combined with strong economic growth we expect to see compound annual fleet growth rates in these emerging markets in the magnitude of 10 to 20 percent."
Walter Kraujalis, founder of aircraft sales and acquisition and consulting firm AeronomX, predicted that "in five years we will be back to a normal market that is better than previous normal markets." The market peak before the recession and last year's lows will be replaced by more moderate sustainable growth, he predicted.
2. Business aviation's image will improve.
"The political and public relations pendulum is shifting," said Jim Coyne, president of the National Air Transportation Association. "We're going to see a doubling of the global supply of wealthy people in the next five to 10 years. Our products are most attractive to people who put a high value on saving time, and there are going to be millions more people who want to spend money to save time and get to places more safely and efficiently."
According to Cessna's Whyte, "Since we had the three CEOs of the big auto companies in Washington being cross-examined, a lot has happened and at a political level there is a better understanding of what business aviation does." Cessna owners who stopped flying because of the economy and concern about their image have begun flying again, he said. "They realized they could not conduct business efficiently without their airplanes."
Robert Poole, director of transportation policy at the Reason Foundation, said he sees a shift in the way people travel on business aircraft. "I will speculate that as time goes on, more companies will opt for fractional and other forms of using business jets and turboprops without outright ownership, both to reduce overhead costs and to maintain a lower profile."
3. Technology will make aircraft safer and more reliable.
The FAA's plan to equip airplanes with the ability to monitor and report on their location both to ATC and other aircraft is part of the massively expensive NextGen effort that should see implementation by 2020. "The whole suite of NextGen capabilities," said Reason's Poole, "will lead to most flights being carried out on user-preferred, optimal trajectories, whether that's to minimize fuel burn or minimize door-to-door time."
Jet engines will continue to improve, according to Shawn O'Day, GE Aviation's manager of business and general aviation marketing. "Engines keep getting more reliable," he said. "It's about continuing to improve efficiency, using materials to reduce weight and operate at higher temperatures." Looking at GE's massive GE90 engine, it's easy to see how the composite fan blades on the front are radically twisted, compared with metal fan blades on older engines. "We know how air flows from the root to the tip," he said, "and how to turn that airfoil and make it more efficient. And better efficiency means lower fuel burn."
On the airframe side, business aircraft design is moving toward not only advanced avionics for the pilots and more useful telecom tools in the cabin but also increased system redundancy. Cessna's newest jet, the CJ4, offers four sources of electrical power, according to Whyte, "such that it's virtually impossible to lose all the avionics." Other new developments include communication with air traffic controllers via datalink, reducing the need for radio-based voice communications. Increased use of situational-awareness tools will help eliminate runway and taxiway accidents with cockpit displays showing pilots their own aircraft's location on airports, and also information about other aircraft and ground vehicles. "Runway incursions should be a thing of the past," Whyte said.
4. U.S. government regulation will increase.
In America, at least, business aviation users can still fly when and where they want without first having to obtain permission. That may change in the next few years as the Transportation Security Administration has expressed a strong desire to apply airline-like security standards to business aviation, including the need to obtain security clearance for crew and passengers before takeoff.
Overall, according to Bombardier's Knappen, "Business aviation has fared well in the current regulatory climate, both in America and now increasingly in international markets. However, we are also now experiencing increased levels of policy development at ICAO [International Civil Aviation Organization] and a renewed focus by most major national regulators worldwide. Many regulations are under consideration or about to be written or introduced that our industry will have to comply with. This new wave of rulemaking will undoubtedly increase the burden for manufacturers, operators and maintenance and training providers worldwide."
Kraujalis also believes that international authorities will soon seek to regulate business aircraft operators, but he sees a positive side. "I predict that in a little over five years, ICAO will come up with a corporate flight department's air operating certificate similar to a charter company holding an air carrier certificate," Kraujalis said. "This will benefit business aviation immensely. The regulatory environment that we use now is confusing. A corporate airplane legally flies only because of the crew's personal pilot's licenses."
Whyte of Cessna, meanwhile, said he considers less regulation a possibility, at least internationally. "In other parts of the world," he said, "we're hoping it will go the other way and some regulations will be relaxed so that it makes all of aviation more viable. I'm thinking of China and India, where growth is being held back by over-restriction and over-regulation."
5. Carbon emissions will drop.
The global-warming issue has ensnared aviation and the industry will face growing pressure from the public and governments to keep emissions to a minimum. "It's clear that additional environmental regulations are going to be a reality in the U.S.," said the NBAA's Bolen. "They have already moved forward in other parts of the world." Added Whyte: "We are going to have to deal with it and expect that there will be a cost for the emissions that we do make."
On the hardware side, GE Aviation is working on development of engine efficiency improvements with its twin annular pre-swirl combustion technology, which greatly lowers greenhouse gas emissions in all modes of operation. GE is also working with organizations that are developing alternative fuels.
According to Bombardier's Knappen, meanwhile, "We have a commitment by the general aviation manufacturing and aircraft operator communities to achieve carbon-neutral growth by 2020 and a 50-percent reduction in total carbon emissions by 2050 [relative to 2005]. We will achieve this through expected advances in technology, infrastructure and operational improvements, alternative fuels and market-based measures."
"Everyone expects that the government will impose more tax in all areas of life," said Avfuel's Sincock, "with business aviation not being an exception. The challenge will be to strike a balance so that increases in taxes for environmental conservation and other issues will not be so large that they stifle the use and growth of business."
NATA's Coyne said he doesn't think taxes will provide a solution. "Technology is going to bring down our carbon footprint as we figure out ways to use energy more efficiently."