The New Normal: On NBAA, the airlines, and trade shows

May 8, 2004

The New Normal

On NBAA, the airlines, and trade shows

By Paul Bowers

May 2004

I'm starting to hear talk about things returning to the "good olddays" inaviation. Those days, of course, were the ones prior to the Bush Administrationand 9/11 and everyone seemed to be making money; AIR-21 was fuelingairport construction; capacity was our largest concern.

Perhaps because capacity is becoming an issue once again the logic is that if we are pushing the airports and airspace to the limit, all is well or will be soon enough.

I don't want to burst anyone's bubble, but the conditions that existed in the late ’90s are gone and won't be duplicated anytime soon — not on Wall Street and not with general, corporate, or commercial aviation.

Thinking of the recent past, change, and the opportunities of the future, consider some examples:

• Let's start with NBAA. This great association of corporate aviation has been a model held high by other groups, within and outside of aviation, on how to grow successfully. It had a leader in Jack Olcott who guided it for many years and deserves much credit for what it is today. Jack retires and is replaced by Shelley Longmuir. Less than six months after taking over, there's turmoil. Key staffers were leaving; the board meets and decides that Shelley must go. The staffers are brought back and a search for the next "Jack Olcott" is launched.

Message for NBAA: Jack is gone (unless they lure him out of retirement). Neither he, nor the exact state of corporate aviation, will ever be duplicated. No need for a Jack clone. As long as the association's mission meets the needs of the members, a new leader, and perhaps team, is OK.

• Then there's the health of the airlines. If capacity is again being discussed the airlines must be in the black, right? Not really. What's happened is that regionals, Southwest, JetBlue, and other low-cost carriers have taken on the loads (and profits) that were once the domain of the legacy carriers.

How has this happened? The ability to deal with a changing consumer base and a different set of business conditions is the difference. The legacy carriers are caught in an environment that allows them to be profitable under specific sets of circumstances: in-line labor and fuel costs; having enough seats filled by business, etc. Newer, more nimble competitors with an ability to react to today's business conditions are succeeding and pushing the old guard close to extinction.

• These market conditions apply to trade shows as well. Just this year one established airport/ground support show has been postponed, perhaps forever. The business model that allowed it to make money had shifted. Another launch of a show in Florida never made it — caught with old concepts in a new market.

Our own Cygnus show that comprises Aviation Industry Week in Las Vegas this May doesn't resemble what it was just a few short years ago. The success enjoyed in its 2003 debut happened by making major alterations and bringing together the NATA, PAMA, and ground support sectors to accommodate market changes.

The success for each of our companies is rooted in an ability to change as the world around us changes. Those who blame their company shortcomings on outside forces and wait for conditions to return to normal will be waiting a long time. The new "normal" is here.