General Aviation Hit Some High Notes This Week ...

... perhaps a sign that 2011 will begin the industry turnaround. And, the latest “good news” events come on the heels of Congressional action several days earlier. In Greensboro, NC, Honda Aircraft Company, Inc., announced that it has successfully completed the first flight of its FAA-conforming HondaJet advanced light business jet. The company reports it has more than 100 orders for the $4.5 million HondaJet, which it expects to begin delivering to customers in late 2012. Meanwhile, on Tuesday, Hawker Beechcraft Corporation (HBC) announced that it reached a formal agreement with the State of Kansas that significantly incentivizes the company to maintain its presence in Wichita over the next ten years. HBC chairman/CEO Bill Boisture and Kansas Governor Mark Parkinson announced the agreement in which a state incentive package requires Hawker Beechcraft to maintain its current product lines in Wichita and retain at least 4,000 jobs over the next ten years. Comments Boisture, “With the acceptance of this agreement, we are committing to be successful as a Wichita, Kansas, and U.S.-based private company and preserving a valued American industry in tomorrow’s aviation markets.” The $40 million package from the State of Kansas is part of an incentive program available through the Kansas Department of Commerce. The package includes $10 million over three years for tuition reimbursement and training as part of the State of Kansas Investments in Lifelong Learning (SKILL) funds of the program. The SKILL funds may be used for employees attending the National Aviation Training Center, Wichita State University, or any of the other Kansas Regents’ institutions. Hawker Beechcraft will also receive $10 million in the first year, followed by $5 million each year for the next four years, as part of the incentive package, according to the company. The news from Capitol Hill came late last week with the signing of a tax bill seen as vital to GA manufacturers – H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. Comments General Aviation Manufacturers Association president Pete Bunce, “This important legislation contains two provisions that are critical to the recovery of the general aviation manufacturing industry.  The first permits 100 percent depreciation of capital investments including aircraft engines, avionics, and other upgrades to aircraft during 2011 and 50 percent depreciation of investments made in 2012.  Due to their longer production cycle, general aviation aircraft will also be eligible for 100 percent depreciation in 2012 and 50 percent in 2013. The bill also extends the important research and development (R&D) tax credit for two years, which will allow businesses to receive credit for this year’s (2010) research expenditures and also permit companies to plan for 2011.” Adds Ed Bolen, president of the National Business Aviation Association, “[The] House vote brings us another step closer to preserving vital U.S. business aviation manufacturing jobs, while also providing companies immediate access to the many benefits that accrue with the use of an aircraft for business purposes.” As Christmas 2010 is upon us, it appears the general aviation industry has at least a few goodies in its collective stocking this year. Perhaps the biggest ‘goodie’ may be the fact that our good friends in Washington, D.C. have finally come to realize that words like general aviation and job creation and exports actually go hand in hand. Thanks for reading, and Happy Holidays. jfi