Friday, September 20, 2013

General aviation plane sales rebounding


DENVER (DENVER BUSINESS JOURNAL) - Between the Great Recession and some bad publicity, few companies suffered as much in the past five years as those that manufacture and sell small aircraft to businesses. 

The number of general aviation aircraft sold nationwide in 2012 was less than half that shipped in 2007, and their average price fell as much as 70 percent from the pre-recession peak. Many aircraft dealers have gone out of business, and some companies owning planes simply shut them down, unable to find buyers and unwilling to be criticized for using them.

But there's finally some good news, experts say, after corporate jet prices have dropped for 25 consecutive quarters: The number of transactions, especially for used planes, has risen slightly for two years now. Also, business aviation leaders have launched a campaign - so far successful - to ward off changes in federal law they say could stunt restarting a vital means of transportation for companies.

"I'm hopeful that we are in spitting distance of a recovery," said Jay Mesinger, founder of J. Mesinger Corporate Jet Sales Inc. of Boulder. "We're busier in our office today than we have been for years."

A corporate jet is a major investment, costing anywhere from a few million dollars for used aircraft to $60 million for high-end planes coming off factory lines.

Many larger companies, in particular, owned corporate jets not so long ago. There were 3,279 new planes made and shipped in 2007, according to the General Aviation Manufacturers Association (GAMA). And buyers in the mid-2000s would pay premiums of 10 to 20 percent above the price of the planes to ensure they could obtain high-demand aircraft, recalled Michael Amalfitano, an aircraft finance expert at Bank of America Merill Lynch and associate member of the National Business Aviation Association (NBAA) Advisory Council.

Then came the recession, which wiped out company finances. And then came Nov. 19, 2008, when the CEOs of the big three American automakers acknowledged they flew private aircraft to Washington, D.C., to plead for public bailout funds. That gave a bad reputation to using such private aircraft.

By 2010, just 1,334 new aircraft were shipped, sales of used planes froze and tax increases on corporate jets became very popular.

From that period emerged groups such as the Alliance for Aviation Across America, which sought to remind lawmakers and businesspeople of the benefits of corporate jets - faster travel to meet clients, chances to expand sales and opportunities to connect to an increasingly international customer base.

NBAA and GAMA teamed on a publicity campaign in 2009 dubbed "No Plane No Gain." So far this year, that campaign has helped to keep air towers open through the first round of sequestration, and spurred the U.S. House to pass a bill designed to streamline regulation of small aircraft, Ed Bolen, NBAA president and CEO, said during a July forum his organization held at Centennial Airport.

Despite the improving image and policy gains, restarting aircraft sales has been slow in Colorado, where general aviation supports 22,650 jobs with a payroll of almost $750 million a year. And that, Mesinger explained, is mostly because few lenders are willing to give money to businesses to buy planes - the first time that element is missing from an economic recovery.

Lenders lost hundreds of millions of dollars on airplane loans during the recession, as a number of loans went into default and other lessors turned planes back in at prices that forced lenders to take a loss, Amalfitano said at the NBAA forum. So in this recovery cycle, 75 percent of plane buyers are paying cash and the remaining 25 percent are leasing the aircraft rather than buying them, he said.

Mesinger compares the post-recession years to a junior-high dance, where buyers and sellers stood on opposite sides of the room, both too scared to make offers because they had no idea what to ask for and feared rejection.

He projected that prices on planes will continue to decline for the next 12 to 18 months as demand slowly catches up to the market's oversupply. But with attitudes changing about the need for corporate planes and companies once again willing to take a chance on investing in growing their businesses, the scared kids at opposite ends of the room are starting to move toward each other, he said.

"Today, it's not over. But the fact that people fly aircraft to do business, to get ahead of their competitors, to get out of their rural communities, again - they're doing it because they have more confidence in the economy, more confidence in where the economy is going," Mesinger said. "It wasn't until the end of 2010, beginning of 2011, that everyone got enough confidence to try to dance again."

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Three former Adventist pastors see jet plane business take off: Jet Mall at Fort Worth Spinks Airport (KFWS), Texas

Three former pastors who operate a business at Spinks Airport are amazed by the blessings coming their way from the heavens. 

Jack DuBosque, Elwyn Owen and Steve Gifford are former pastors in the Seventh-day Adventist Church who operate Jet Mall, which, in only five years, has become one of the most respected service providers for business aircraft and commercial airlines in the United States.

Operating out of a 52,000 square-foot hangar on the east side of Spinks, Jet Mall recently repainted the exterior and redesigned the interior of a private jet owned by former Pittsburgh Steelers quarterback and current TV personality Terry Bradshaw, and the Boeing 737 that took off last week was owned by Air Peace, a charter company  headquartered in Lagos, Nigeria, Africa.

Air Peace will be bringing 16 more aircraft to Spinks to be repainted and refurbished by Jet Mall.  The 52,000 sq.-ft. hangar on the east side of Spinks consists of three separate bays, with one bay dedicated as a painting facility, while the others are used for preparation work and interior installation or maintenance.

The company also has a separate 8,500 square-foot shop for interior fabrication and installation at Spinks.

DuBosque and Owen are co-owners and Gifford is company president.

Jet Mall currently provides services for general aviation, business aircraft and commercial airlines. Revenue is generated from aircraft exterior painting and cabin interior refurbishments, cockpit avionics upgrades and light airframe and engine maintenance services performed on site through third-party agreements, Gifford said.

“Jet Mall's mission is to deliver products and services that offer world class quality and as a result, produce repeat customer business,” DuBosque said.

The co-owners, each with a lifelong love with aviation, became acquainted while working for the Texas Adventist Conference in Alvarado, DuBosque as an  evangelist and Owen as director of building construction, supervising the building of Adventist schools and churches in Texas including the new Joshua Adventist School in Joshua.

Gifford, who served as president of the Texas Adventist Conference from 1994-2004, brings years of administrative and business skills to the job.

DuBosque, who has owned three planes and is a licensed commercial pilot, served as a navigator on an aircraft carrier during an six-year career with the Navy. He also taught navigation to midshipmen at the U.S. Naval Academy in Annapolis, Md.

When DuBosque left the Navy, he earned a Master of Divinity degree at Andrews University, the Adventist seminary in Berrien Springs, Mich. and flew as a missionary pilot.   He continues to present evangelistic meetings on weekends throughout the U.S., flying his own plane out on Thursday night and returning Sunday afternoon.   “For me, the general idea is that Jet Mall supports my evangelistic endeavors,” DuBosque said. “That's why I do this.”

Owens started flying in 1964 while in high school in Loveland, Colo., and was able to amass a lot of hours by ferrying planes for a small-plane dealer in nearby Greeley.

“I got a lot of free hours doing that,” he said. “During my senior year I leased a plane for $7 an hour and continued to build up hours.”

After graduation from Union College in Lincoln, Neb., Owen became a missionary pilot in Central America and bought a plane there.  He came back to the U.S. for a while but returned to Brazil as a pilot for the Adventist Church in the Amazon, acquiring a multitude of hours flying low over the Amazon jungle

“If you have fuel, it's the safest place in the world to fly because there's nothing taller than 1,000 feet for hundreds of miles in any direction,” Owen said.

After leaving work for the Adventist denomination and with their aviation backgrounds, the co-owners decided to start a business that involved airplanes, hoping to obtain military contracts for aircraft maintenance. But that didn't happen.

Instead, business at Jet Mall, the largest employer at Spinks with 50 employees, is taking off through word of mouth among aviation brokers, the middle men who negotiate the sale and purchase of business jets to private individuals and small companies and commercial passenger gets to smaller airlines.

The painting of the 737 for Air Peace becomes a flying billboard for Jet Mall that will attract attention throughout Africa.  The broker who arranged for Jet Mall to paint the Air Peace 737 has contracted with Jet Mall for 16 additional commercial aircraft, including more 737s and MD-80s.

The world of business jets includes the smaller, or medium jets, such as those owned by Bradshaw and Dallas Cowboys owner Jerry Jones, and numerous professional golfers; the larger 737s and MD-80s also used by commercial airlines; and the wide-body jets owned by charter companies and Mideastern sheiks and oil barons.

“It was a broker who knew about the excellent quality work performed by Jet Mall that led Bradshaw to send his jet to us,” DuBosque said.

There are brokers who represent all aspects of airplane work, DuBosque said.

“There are brokers for maintenance, for exterior painting and for interior renovations,” he said. “Most private jet owners don't manage their planes. They just fly in them.”

Jet Mall also paints, refurbishes and performs maintenance on helicopters and large drilling rigs gas companies to power fracking operations.  Currently in the shop is a drilling rig power plant scheduled for shipment to Brazil.

The former pastors located at Spinks because DuBosque owned a hangar there and had been flying out of Spinks since he arrived in Texas.

“In the current economic environment, Jet Mall is correctly positioned to capture more opportunities as business aircraft operators retain their airplanes longer and plan updates rather than replacing them with new,” Gifford said.

Skydiving operation has Federal Aviation Administration blessing: Skydive Cape Cod at Chatham Municipal Airport (KCQX), Massachusetts

CHATHAM — Many residents believe the operations of Skydive Cape Cod — which makes dozens of flights and jumps daily — are unsafe.

A panel of six national experts answered questions from those concerned Thursday night during a discussion hosted by the town's Airport Commission.

Defenders of Skydive Cape Cod, including owner Jimmy Mendonca, say it operates within Federal Aviation Administration regulations and is safe.

Most of the nearly 100 people in attendance disagree.

Denis Glover is a full-time resident of what he said used to be a "safe, quiet town," but is no longer. He asked the panel members if they still believe in the decision-making process that deemed Skydive Cape Cod safe.

The FAA has not found any violations during repeated field inspections, said FAA deputy regional administrator Todd Friedenberg.

"We're fairly confident there is a safe operation here with regard to air traffic," he added.

Skydive Cape Cod has operated out of Chatham Municipal Airport since 2010.

Friedenberg said the FAA has three missions: "safety, safety, safety." During observations — unannounced and announced — over the past month of operations by Skydive Cape Cod, inspectors "haven't noted any anomalies," he said.

The Massachusetts Aeronautics Commission has made four unannounced trips to inspect Skydive Cape Cod in the past month, said Andrew Mihaley, aeronautical inspector for the commission.

There were "no abnormalities" among the operations of Skydive Cape Cod during those inspections, he said.

"I have never seen anything that broke rules during my inspections," Mihaley said.

But many residents claim to have witnessed unsafe skydiving practices.

Heather Mackenzie said she's seen jumpers during rainy and windy days near her home on North Skyline Drive. "It seems to me these are unsafe practices," she said.

While weather conditions may look unsafe on the ground, that isn't always the case in the air, said Alan King, northeast regional director of the United State Parachute Association, a group that promotes skydiver safety.

"Things can look different from the ground," he said, "and there's nothing against jumping in the rain."

As a homeowner near Lover's Lake — the scene of a Skydive Cape Cod plane crash into the water on May 12 of last year — Richard Nurse wondered if the FAA still believes Chatham Municipal Airport is suitable for a skydiving business.

"In one word: yes," Friedenberg said.

Action was taken with regard to the Lover's Lake incident, he added. When someone in the crowd asked what type of action, Friedenberg said he could not comment or specify, drawing "boos" from the audience.

In some 1,200 to 1,300 jumps so far this year, four injuries have been reported from skydiving in Chatham, said Chris Willenborg, executive director of the Massachusetts Aeronautics Commission, a division of the Massachusetts Department of Transportation.

Three of those were "minor tandem injuries," and the other was a broken ankle, he said.

After dozens of residents voiced their concerns about Skydive Cape Cod, Mendonca took the podium to ask questions of the panel.

The panel confirmed that there are no regulations on number of jumps per day or per week for skydiving; that Skydive Cape Cod was inspected at least four times over the past 40 or so days; and that Mendonca asked officials to "fully inspect" his operation.

But many residents are not satisfied.

"Citizens will not rest until the operation is ruled unsuitable," Nurse said, drawing applause and cheers from the crowd.

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Northampton County Executive John Stoffa looking to delay Braden Airpark (N43) sales talks by 6 months

Although Northampton County Council is willing to go to court to stop the potential sale of Braden Airpark, County Executive John Stoffa said a lawsuit may not be needed any time soon.

During tonight's council meeting, Stoffa said he has negotiated a tentative agreement with the Lehigh-Northampton Airport Authority that would delay any sales talks through March. By then, a new county executive and council will be in place, and a resolution between a group of local pilots and the authority may emerge, Stoffa said.

"I don't want to sue the authority. They can't afford it. We can't afford it. We're in court too much already," Stoffa said.

Stoffa's announcement came moments before council passed a resolution calling on the county executive to file litigation against the authority if it proceeds with the sales plans. Council members said if the six-month delay does emerge, the resolution would still show the airport authority and future county officials how seriously they're taking the matter.

"What you've done today and this resolution, I don't think, fight each other," Councilman Scott Parsons told Stoffa.

The resolution was drafted by Robert Brown, a lawyer who has entered discussions about purchasing Braden Airpark. Brown addressed council members and encouraged them to consider subsidizing the authority $5,000 a month to ensure the airport will not be closed. He also advocated for the county to purchase Braden and create a second authority to manage it.

"It's not an investment for general aviation but an investment in the community," he said.

During a committee meeting Wednesday, no council members expressed interest in having the county purchase the property. Brown wrote in his proposal the airport authority is seeking $3.5 million for the property, although local pilots believe the value is closer to $2 million.

Charles Everett, the authority's executive director, has said the authority must sell the Forks Township facility in order to finance a $16 million court payment due in 2015 from a lost lawsuit. He has previously said the authority would not need either county's approval to move forward on any deal, though neither he or the authority's solicitor has outlined their legal reasoning.

County attorneys have opined that selling Braden would require a change in the authority's articles of incorporation. Both Lehigh and Northampton counties would have to approve those amendments, they have said.

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Official: Trenton Mercer Airport (KTTN) not being expanded, just upgraded


Three separate projects are under way at Trenton-Mercer Airport in Ewing Township, N.J., but none involve expanding the facility’s runways, an airport representative said Thursday. 

Two of the projects, estimated to run about $16 million each, are required by the Federal Aviation Administration to improve safety, said Jon Donahue, a manager for C&S Companies. The New York-based firm is working with the airport to coordinate the three projects.

Donahue presented an outline of the work on Thursday to the Delaware Regional Aviation Committee in Philadelphia. The committee advises the Delaware Valley Regional Planning Commission on aviation issues.

A handful of members of Bucks Residents for Responsible Airport Management attended the meeting in the main conference room of the DVRPC in the American College of Physicians Building at Independence Mall West.

The BRRAM members said they were there to gather information to use in their battle to have an Environmental Impact Statement done on the airport. The group members, who primarily are from Lower Makefield and Yardley, said the FAA should have ordered the extensive study after Frontier Airlines started providing commercial service from Trenton-Mercer in late 2012.

The airport’s flight paths cross over many neighborhoods in the two Bucks County municipalities. The Frontier Airlines flights have increased air traffic noise pollution, BRRAM members said. (The airline has temporarily discontinued its service at Trenton-Mercer while the three renovation projects are under way.)

One of the $16 million projects involves installing an Engineered Material Arresting System at the ends of the airport’s runways. The crushable concrete masses, known in aviation circles as EMAS, are used to stop an aircraft from overshooting a runway, according to the FAA.

The other $16 million project is devoted to replacing decaying taxiways, Donahue said. The work is much akin to crews replacing aging roadways, he said.

The FAA is covering 90 percent of the costs associated with the EMAS and taxiway projects, Donahue said. The rest is being financed by state and county money.

The third project should run about $4 million and involves terminal upgrades that include a baggage conveyor belt and construction of two new bathrooms, according to Donahue. The project also will expand the airport’s parking lot from 600 spaces to 1,200 spaces, he said. Mercer County is paying for that work.

Most of the renovations and upgrades should be completed by early November, Donahue said. Frontier Airlines plans to resume service at Trenton-Mercer Nov. 8, officials said.

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