Welcome to the first edition of Aircraft Management Insider

Calendar December 6, 2009 | Posted by Scott Cutshall

This email, published monthly and also available on my blog, is dedicated to helping aircraft owners gain more enjoyment and value out of their aircraft through a better understanding of the marketplace and topics related to the operation and maintenance of their jet.

Over the past nine years I have spoken with thousands of aircraft owners and people interested in buying a jet. Ninety percent of the conversations revolve around the same topics which led me to begin these email posts. My desire is to dispel many of the most common myths related to aircraft ownership. Second is to provide a continual update and commentary on the private jet industry. Third is to provide a forum where I can answer your questions related to aircraft acquisitions, sales, aircraft charter, aircraft management, etc.

So I hope you enjoy this first posting. I look forward to your questions and feedback.

Embraer, the Brazilian based aircraft maker, announced the Legacy 650 during the recent NBAA convention in Orlando, Florida. An upgrade to its popular large cabin aircraft, the Legacy 600, the Legacy 650 offers a greater range of 3,900 This makes possible such popular city pairs as London-New York, Beijing-Moscow, and London-New Delhi. The increase in range is achieved through greater fuel capacity and 10 percent more powerful engines. The 650 will also feature the Honeywell Primus Elite avionics and numerous other avionics and cabin improvements. The Legacy 650 is due to enter service by mid-2010.

Prior to NBAA, Gulfstream rolled out their two newest models: the ultra-long range G650 and the upgraded super midsize G250. Gulfstream conducted the first flight of the G650 on Wednesday, November 25th. Gulfstream’s flagship G650 is scheduled to enter service in 2012. The G250 rolled out under its own power October 6th, and is scheduled to fly before the end of 2009. Deliveries are expected in 2011.

In new and pre-owned business jet news, UBS (published by UBS Securities LLC) reported that their “November Business Jet Market Index came in at 45, slightly higher from our prior survey in September, indicative of continued slowing in the rate of market deterioration. However, our index continues to be weighed down by record high used inventory levels and weak pricing and does not yet reflect actual improvement in market conditions that has historically led meaningful upside for the stocks. Our straight up measure of absolute business conditions, while higher, continues to reflect a depressed market.”

In charter news, the last three months have shown the overall increase in activity typically seen this time of year. Business travel is very active once the school year begins, followed by the busy holiday travel season of Thanksgiving through New Years. Overall, pricing has flattened out as demand and the price of fuel has been on the rise. That said, pricing is still at eight to 10 year lows with overall flight activity down as much as 60-70 percent from 2007 peak levels. The outlook for 2010 is quite uncertain and will likely follow the trend in corporate profits by two to three months.

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