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Business Aviation Data Prompts Cautious Optimism From Industry Leaders

February 22, 2011

Hear a special edition of the NBAA Flight Plan podcast featuring an interview with GAMA’s Pete Bunce, which took place immediately following the Association’s Feb. 22 State of the Industry event.

Business aviation leaders today sounded a note of cautious optimism that the industry is witnessing a budding economic recovery after one of its most turbulent periods on record.

At a press conference held in Washington, DC, Pete Bunce, President and CEO of the General Aviation Manufacturers Association (GAMA) was joined by John Rosanvallon, GAMA Chairman, and president and CEO of Dassault Falcon, in discussing data and trends impacting the industry in the U.S. and worldwide.

"We've been through two difficult years and fortunately, we are starting to see some positive signs,” declared Rosanvallon. For example, although worldwide shipments of general aviation airplanes continued to decline for a third straight year, the rate of decline appears to be slowing, and general aviation billings are on the rise. Furthermore, flight hours have witnessed an uptick in recent months, from the historic lows of recent years.

Rosanvallon said the industry’s turnaround has been helped in part by a return in corporate profits, which traditionally drive business aircraft purchases, coupled with an overall economic recovery in the U.S. and other global markets. “Worldwide, Gross Domestic Product [GDP] was up five percent in 2010, and U.S. GDP rebounded in the second half of the year,” Rosanvallon observed.

Rosanvallon also pointed to the value of new opportunities in the international marketplace in strengthening the industry’s recovery. “The North American market continues to account for less than 50-percent of shipments for jets and turboprops,” he said. “Clearly, the global markets are helping us.” Rosanvallon pointed specifically to the Asian market, noting: “There's a lot of discussion in our industry about China, for example, and we expect that focus to continue.”

Several positive developments in the policymaking arena have also contributed to the improving environment for business aviation, Rosanvallon said. Specifically, he pointed to enactment last year of “bonus depreciation” legislation for accelerating the cost recovery of strategic business purchases, including business aircraft, as well as extension, through the end of 2011, of federal tax credits for expenses by companies – including aircraft manufacturers – in research and development.

Bunce added that collaboration between industry and government would remain essential to business aviation in the future. “Our manufacturers face unique circumstances, in that their ability to deliver any product to market is dependent upon government regulators certifying their work,” Bunce noted.

Bunce observed that at a time when government resources are severely constrained, a more streamlined approach to the key priorities for business aviation – including policies related to safety, security and aircraft emissions – could help industry and government produce more effective policy outcomes with greater efficiency.

“This industry has not stopped producing product – in fact, the pace has been accelerating,” Bunce said. “As our industry builds back to growth and prosperity, we will need to work in industry-government partnerships where there is tremendous pressure to do much more with much less. We know that the world is waking up to business aviation, and we need the regulators to be partners with us.”

Bunce and Rosanvallon also took the opportunity to reiterate the importance of the industry’s work to correct misperceptions about business aviation – work GAMA has undertaken, in part, through the No Plane No Gain advocacy campaign, which GAMA jointly sponsors with the National Business Aviation Association.

“The image of general aviation is something that we have worked very, very hard on,” Bunce said, noting that GAMA and NBAA quickly launched No Plane No Gain after the now- infamous trip to Washington, DC made by the nation’s Big 3 auto executives in November 2008 to ask Congress for taxpayer assistance for their companies. The executives’ trip aboard company aircraft set off a firestorm of criticism from policymakers.

Bunce pointed to the paid advertising, media events and other No Plane No Gain initiatives that had put the true face of business aviation in front of decision-makers and opinion leaders, illustrating the industry’s value to citizens, companies and communities across the U.S.

“No Plane No Gain is an ongoing program, and we need to keep telling this story,” Bunce said, revealing plans for a March 21 event in Wichita, KS that would underscore the importance of business aviation in that part of the country. Bunce added the Board of Directors at both GAMA and NBAA fully support the No Plane No Gain program, and that such backing was expected to continue into the foreseeable future.