At NBAA 2012, Cautious Optimism Persists

Attendance seemed down slightly on opening day, probably due somewhat to the temporary TFR in affect for Obama's shortened visit to Florida ... and mostly due to superstorm Sandy, which blasted the East Coast on Monday and Tuesday causing thousands of commercial flight cancellations. 

For many FBOs I spoke with at the National Business Aviation Association's (NBAA) 65th annual meeting and convention in Orlando this week, fuel sales and aircraft activity has not yet returned to pre-recession levels.  

That said, aircraft service companies are cautiosly optimistic for the near-term, and operators that have diversified their service offerings say the additional profit centers have helped supplement the decline in activity in recent years. 

Comments Will Cutter, president of Cutter Aviation (the company is celebrating 85 years in the business at NBAA 2012), "Our fuel is about, gallon-wise, back to ’08 levels. We watched our costs real well, so we are doing OK in the fuel business.

"Aircraft sales have been real good for us this year; our Piper dealership is the top Piper dealership. So we are selling some airplanes, mainly because we are in Texas; it’s either oil or agriculture that’s buying all the airplanes. The used business is OK.

"And charter has been very strong. We are struggling in the maintenance world; we can’t get the volume to sustain enough mechanics to keep everything going good. As the fuel volume gets going and people are flying more, maintenance will catch up."

As for the NBAA convention, Cutter relates, "With the storm hitting up North, and the TRF right before the event certainly didn’t help; talk about timing. You can see the event is down; I manned the Honda booth all morning, and we had people coming through – but not what it used to be.

"People are still upbeat, I just don’t think a lot of people could get here."

Regarding the upcoming election, "I’m sure Mitt will be our president – I hope so; we all hope so," he adds.

According to JETNET, which presented its 'state of the industry report' during the NBAA event, the world economy grew 2.6 percent each year during the last ten years - and the global jet fleet grew 4.2 percent, a ratio of fleet to GDP growth of 1.6 percent.

Considering that the U.S. has 61 percent of the world's business jets, it's interesting to see how GDP and business aviation aircraft track together. JETNET officials say that despite record corporate profits, U.S. bizjet utilization has yet to fully recover from the effects of the economic downturn. 

However, JETNET iQ forecasts that the business jet fleet will grow to just under 26,800 aircraft worldwide by the end of 2021, an increase of 45 percent over the ten-year forecast period. Some 2,100 jets will be retired or otherwise removed from service during this timeframe, says the company.

On another note, Phillips 66 Aviation announced a new corporate credit card program featuring AVCARD’s cobranded card with Phillips 66. The new Phillips 66 Aviation Wings Card will provide acceptance at more than 7,200 locations globally, along with double WingPoints at participating FBOs.

The company says the new card will serve pilots and flight departments, who can use it for a range of services beyond fuel, lubrication, and maintenance - including aircraft cleaning, landing fees, oxygen, transportation, ground power, hangar rental, flight training, hotel reservations, de-icing, charter, fees, and catering, among others.

Thanks for your interest,