There's Change in the Wind

NBAA briefings ...

• AIRBUS—unveils the A318 Elite bizjet, expected to compete with the Gulfstream 450, Global 5000, and Falcon 900EX market segment.


• AIR ROUTING INT’L—based in Houston, renames its corporate jet fuel procurement program (formerly AirFuel Int’l) Air Routing Fuel.


• AIR SECURITY INT’L—of Houston reports a 30 percent increase in security assessments for corporate aviation clients. Air Security also reports it has acquired Paladin Int’l, Inc., a provider of intelligence and security services.


• ATLANTIC AVIATION—enters an agreement to acquire the Las Vegas Executive Air Terminal at McCarran Int’l Airport. Company also announces that its AvCenter FBOs will be renamed Atlantic Aviation. Chain is owned by Macquarie Infrastructure Company.


• BOMBARDIER—unveils the Challenger 605 bizjet, a replacement for the Challenger 604 model.


• CESSNA AIRCRAFT COMPANY —reports it currently has an aircraft order backlog in excess of $6 billion, and expects to deliver up to 245 bizjets and more than 850 single-engine pistons in CY2005. At Orlando, Cessna was highlighting its recently certificated Citation CJ1+ and its Citation CJ2+ aircraft, as well as its entry into the very light jet arena, the Mustang, still under development.


• CIRRUS INDUSTRIES—based in Duluth, MN, and parent of light aircraft manufacturer Cirrus Design Corp., completes the acquisition of air taxi operator Smart Air Travel Solutions Air (SATSair) of Greenville, SC.


• DASSAULT—takes orders for more than 70 Falcon 7X bizjets.


• ECLIPSE AVIATION—announces it will establish a Factory Service Center at Albany (NY) Int’l Airport.


• ELLIOTT AVIATION—based in Moline, IL, introduces its Acquisition Solutions program by which customers pay a flat fee for assistance in identifying high-quality, pre-owned business aircraft.


• GALAXY AVIATION — breaks ground on a 38,000-sq.ft. FBO office/hangar complex at Orlando Int’l Airport, replacing the facility destroyed in 2004 by Hurricane Charlie.


• GLOBAL ePOINT INC.—a manufacturer of security technologies, announces that its aviation division, AirWorks, is expanding operations into an 80,000-sq.ft. aircraft modification center at Tulsa.


• GROB AEROSPACE—and ExecuJet team up to manufacture the Utility Jet SP, a twin-jet aircraft priced at $7.2 million; company has orders for 15 units and projects it will produce 40 per year upon certification.


• INNOTECH AVIATION — of Montreal is named a Preferred Completion Center by Bombardier Aerospace for its Global Express XRS and Global 5000 bizjets.


• JET AVIATION—enters an agreement with JSSI as a provider of maintenance services at two FBOs for JSSI maintenance management customers.


• JETNETWORK—of Miami introduces a new jet card program under which the company purchases used bizjets that are then put on JetNetwork’s Part 135 certificate, and time is sold in card increments of $100,000 to $500,000. Company currently has 33 bizjets available; 150 card members enrolled.


• LANDMARK AVIATION—the former Garrett/Hawthorne Piedmont/Associated, expands its network of Mobile Service Teams for on-site engine and airframe maintenance to 14.


• NBAA—National Business Aviation Assn. unveils a new product, “Flight Department Essentials - Helping Your Business Take Flight;” www.nbaa.org.


• PIAGGIO—records its largest single order for Avanti II aircraft with 36 at Orlando.


• RAYTHEON AIRCRAFT—unveils the Hawker 850XP bizjet, an upgrade of the Hawker 800XP and 800XP-i aircraft. Raytheon also announces it plans on introducing at least one new aircraft model each year.


• SAVANNAH AIR CENTER—says it will break ground in 2006 on a six-acre expansion related to its authorization as a Bombardier Global aircraft completions center.


• SIERRA INDUSTRIES LTD.—of Uvalde, TX, introduces the Sierra VLJ program, in which it will refurbish Citation 500/501SP bizjets and offer them to the marketplace as low-cost very light jets, with an entry purchase set at $845,000; www.sijet.com/myVLJ.


• SIKORSKY AIRCRAFT—announces it is acquiring Pennsylvania-based Keystone Ranger Holdings, a major provider of helicopter-related services; Sikorsky will also acquire the Keystone subsidiary, Composite Technology, Inc, based in Grand Prairie, TX.


• SINO SWEARINGEN AIRCRAFT CORP.—receives from FAA its Type Certificate for the SJ30-2 bizjet.


• SPECTRUM AERONAUTICAL—is a new very light jet aircraft manufacturer, based in Encinitas, CA, that will offer the Spectrum 33 VLJ, a twin turbofan. Spectrum is founded by Linden Blue, designer of the Beech Starship composite aircraft, and his son Austin.


• TAG AVIATION—a major air charter, aircraft management, and sales firm, established the TAG Aviation JetCard, allowing customers the capability of purchasing charter services in increments of $100,000, $250,000, or $500,000.

Thomas K. Coughlin, AAI, president and CEO of Air-Sur, Inc., an aviation insurance provider based in Ormond Beach, FL, says initial estimates for insurance losses due to Hurricanes Katrina, Rita, and Wilma at approaching $58 billion. In time, he says, aviation interests can expect their rates to rise.

According to Coughlin, National Underwriter puts the estimates at:

• Katrina - $40-55 billion
• Rita - $5-18 billion
• Wilma - $8-12 billion.

Following the post-9/11 spike in rates, Coughlin says rates have been fairly stable for airports and aviation businesses, but he expects the large losses over the past year to catch up with the marketplace. When it does, he says, expect another spike.

“Reinsurance costs tend to drive pricing of insurance rates, and they’re starting to go up,” says Coughlin. He sees property and catastrophic insurance rates rising the fastest, while corporate aviation rates remaining competitive.

He advises disaster preparedness is critical to reduce losses and to lessen the impact of business interruptions.