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October 2009
LEADERSHIP
Comment by Norwood McDaniel:
"My dedication to business aviation spans forty (40) years and never have I observed government so anti-business aviation growth and job creation as of 2009. In the history of organized labor, when have aviation factory workers ever had to request government officials reverse administration policies to regain the jobs they have lost? When have aviation factory workers ever had to request the country's President to visit communities to witness economic devastation within the aviation industry?"
Tax Reform
U.S. tax policies tend to favor risky financial investments over capital investment of equipment. When tax policies begin to favor aviation capital investment jobs will be created. Protectionism alienates the United States and minimizes U.S. based business to compete in the global market place. Once U.S. based business begin to compete additional tax revenue is realized.
Carbon Tax
If Carbon Tax or Cap and Trade or (TAX and PAY for programs) is implemented the aviation economy will experience a slower recovery if Carbon Tax legislation is implemented. U.S. business aviation contributes $150 billion annually to the U.S. economy. The economic fallout of Carbon Tax legislation will devastate disposable income American's will have at the end of a work week.
The aviation manufacturing and service industry has seen employee layoffs in the tens of thousands. Boeing expects layoffs to total 10,000 in 2009. The number includes 4,500 layoffs announced earlier this year by Boeing’s commercial plane unit. Cessna recently announced a 2,000 workforce reduction.
Machinists union president Tom Buffenbarger
Buffenbarger said; Since November, Hawker Beechcraft, Cessna Aircraft and Bombardier Learjet have cut production as customers canceled or deferred orders.Together, they have laid off more than 12,000 people, raising the city's unemployment rate to almost 10 percent
Wichita Mayor Carl Brewer
In March, city leaders sent Obama a letter inviting him to visit Wichita. And City Council members voted unanimously for a resolution to that effect.
Sedgwick County commissioners passed a resolution in March urging Obama and members of Congress to recognize that the country's national defense and economy depend on the aviation industry. It also was signed by the Wichita Metro Chamber of Commerce, the Wichita Independent Business Association and the Wichita Area Association of Realtors.
Wichita Mayor Carl Brewer said he is in favor of Buffenbarger's request. "Maybe he can talk him (Obama)into it because I haven't been able to get him to do it," Brewer said. Obama's visit would be beneficial, Brewer said.
Congress
The 2009 U.S. House of Representatives economic stimulus package is suspect as to its proposed effectiveness this year. Discussions indicate large debt the U.S. society will incur this year and beyond. see Tax-effects on aviation
Contract Pilots
East and west coast contract pilots are not receiving calls for contract work. East and west coast charters are negligible. Charter operators are privately indicating a 55% reduction in charter revenue. Part 91 contract flying is reduced. Buyers of aircraft at current asking prices are few. Aircraft sales brokers are stating confidentially that offers are at 40 cents on the dollar of aircraft valuations from 2007.
JP Morgan - Bizjet market Report
August.
Data from a J.P. Morgan business jet report released onAugust 4, 2009indicates “evidence of stabilization” in the business jet market “but no improvement.” According to the report, pre-owned business jet inventories remain at record highs–staying at about 14.5 percent of the in-service fleet for the fifth consecutive month–but have not gotten much worse. Large-cabin and light jet inventories increased slightly, while midsize jets eased a bit. Of 23 business jet models J.P. Morgan tracks, 12 saw higher sequential inventories last month. Pre-owned aircraft prices have continued “a steady downward march toward supply-demand equilibrium,” noted J.P. Morgan aerospace/defense analyst Joseph Nadol III. Prices fell 1.9 percent last month, with used large-cabin jets experiencing the most contraction at -2 percent. Meanwhile, business jet flight activity continued to flatten sequentially, with 285,000 takeoffs and landings recorded in the U.S. in June a 21-percent decline over the same month last year. This is “the fourth consecutive month in the 280,000 to 285,000 range and [takeoffs and landings] appear to have stabilized at this depressed level off a low of 264,000 in February,” the investment firm said. “We still see few signs of moving off the bottom, however, and were not much encouraged by second-quarter earnings,” Nadol concluded.
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