CORPORATE AVIATIONFINANCIAL TIMES SPECIAL REPORT | Tuesday October 19 2010

High Flying

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Hopes fadefor earlystart torecovery

Shrinking revenues, morejob cuts and gloomy fore-casts. Such is the state ofmuch of the business jetindustry on the eve of one of thesector’s biggest annual gather-ings.

Two years on from the Leh-man Brothers investment bankcollapse that preceded theindustry’s savage swing fromboom to bust, any hope of arecovery next year looks mis-placed.

“Now it’s looking very muchlike 2011 will be more of thesame and 2012 will be whenthings start picking up,” saysGary Crichlow, an analyst atthe Ascend aviation consultancyin London who tracks businessaviation trends.

The industry has spent 2010“convalescing”, says RichardAboulafia, vice-president foranalysis at the Teal Group con-sultancy in Virginia, who haslong predicted there is unlikelyto be a recovery until 2012.

The reason is simple enoughgiven the business’s sensitivityto a global economy that hascontinued to show weakness;fears of a double-dip recessionand concerns about the impact

of government austerity pro-grammes and the availability offinancing.

The industry managed todeliver about 830 business jetslast year, by Ascend’s count,slightly more by some others.This year, the consultancy hascounted only 445 shipments inthe first three quarters, suggest-ing it will struggle to reach even600 over the full year.

In the third quarter alone,there were only 125 deliveries,39 per cent fewer than in thesame quarter last year.

This is all a long way fromwhere the corporate aviationsector was only three years ago.On the back of record corporateprofits and robust economicgrowth, business jet deliveriessurged to more than 1,000 forthe first time in 2007 andjumped again in 2008, thanks tohuge backlogs prompted bymounting orders.

But the gloomy forecasts forthis year need putting into per-spective, says Rob Wilson, presi-dent of business and generalaviation at Honeywell Aero-space, recalling the industrywas “very joyous” about deliver-ing 600 or 700 jets a year asrecently as 2004-05.

This is true, but of little com-fort to the people hit hardest inthis downturn, such as the thou-sands of workers laid off by USaircraft manufacturer, Cessna.In September, it announced thata further 700 jobs would be cut,on top of the 8,000 it has shedsince late 2008.

Its total workforce has beencut in half, with most of thelosses at its Wichita plant,where a workforce of 12,400 hasbeen reduced to 6,200 and willonly number around 5,500 inDecember, after the latest lay-offs.

Clearly it is going to be sometime before the industry returnsto its earlier peaks.

There are some signs ofimprovement, though. Flightactivity is edging up, as aresales of used aircraft. But bothindicators are far from whatthey used to be.

The proportion of the globalbusiness jet fleet up for sale hasfallen from its record highs of 16per cent, or more than 2,000 jets,

in May 2009, says Mr Aboulafia.But it has failed to dip below

14 per cent since the start of2010, indicating “a severe over-supply problem”.

Honeywell’s latest annualbusiness aviation outlook, pub-lished on Sunday, also suggestsa recovery will not be seen until2012, after disappointing rates ofglobal economic recovery fore-stalled order rates and softenedhopes of an uptick in 2011.

It is predicting deliveries of675-700 aircraft in 2010 andexpects shipments to be below700 next year.

Longer term, Honeywell’sforecasts have changed littlefrom last year’s prediction that11,000 new jets worth $200bn

would be delivered between 2009and 2019.

It still thinks 11,000 jets willbe delivered between 2010 and2020, but says they will be worthslightly more, at $225bn.

Mr Wilson says the jump invalue is partly due to price esca-lation and partly a result of aphenomenon that has becomeincreasingly evident in thisdownturn – a shift in demandfor larger business jets.

Past recessions have notrevealed such a trend, says MrAboulafia, adding: “We’re mov-ing towards an industry thatfavours larger planes.”

Historically, he says, the busi-

A fall in business jetorders this year is oneof the signs pointing toa delay in the sector’sreturn to health, saysPilita Clark

Inside this issueAfrica Business aviation looksto be on a robust upward trend,writes Rohit Jaggi Page 2

Lynn Tilton The chiefexecutive of MD Helicopterstells Liz Moscrop that aerospacehas been a steep learning curvePage 3

ConnectivityPrivate fliers are still waitingfor the perfectonboard

broadband access, saysJeremy Lemer Page 3

Flight test Rohit Jaggi takesthe controls of the new DassaultFalcon 900LX (below) to seewhat a difference winglets canmake Page 4

Van Nuys airportMatthew Garrahan profiles a

California landmark that is ascreen star in its own

right Page 4

Five-year purchase plans for new jetsFleet replacement and expansion (%)

AdditionsReplacements

94 96 98 2000 02 04 06 08 100

10

20

30

40

Regional demand for new jets in thenext five yearsTraditional corporate & charter operator base

Africa/Middle East 4%

58%19%

13%

Asia/Pacific 6%

North America

Latin America

Europe

Avinode Demand IndexJan 1 2009=100

20

40

60

80

100

120

140

160

Jan 2009 Oct2010

Avinode Price IndexJan 1 2009=100

90

92

94

96

98

100

102

Jan 2009 Oct2010

GlobalEuropeUS

Sources: Honeywell: Avinode

Still battling headwinds: jet sales and charter demand

This graph displays the average daily value of the international charter market as seen in the Avinode marketplace. The index is calculated based on trips scheduled to depart within 4 weeks

This broad-based index displays average price per hour (taxi rate + fuel surcharges) for all active aircraft in Avinode’s marketplace

FT montage Photo: Daniel Lynch

For an in-depth statistical guide to the sector see: www.ft.com/corporateaviation

Continued on Page 4

2 ★ FINANCIAL TIMES TUESDAY OCTOBER 19 2010

Corporate Aviation

Regional market shows an upward trend

The football world cupsaw a spike in businessjet use in Africa. Butthere are signs that,over and above those few busyweeks, private aviation acrossthe continent is on a robustupward trend.

Tag Aviation, the global groupthat has one of the largest fleetsof “wide-body” jets that canserve Africa direct from Europe,has seen a 30 per cent increasein charter flights to and fromthe continent this year.

“This is predominantly withcorporate clients that need totravel to a number of destina-tions in a short time,” says Wal-ter Stark, vice-president of char-ter services at Tag. “With theincrease of economic activity inthe region, it is expected thatthis trend will continue.”

The group, which has bases inHong Kong and across Europeincluding at Farnborough Air-port, which it owns, is also look-ing at forming partnershipswith airlines in Africa to pro-vide services such as corporateshuttles, and is studying ways itcan become involved in improv-ing services – maintenance andairport operations for example.

That could have wider bene-fits. Mark Wooller, head of cor-porate aviation and consultancyat the Independent Bureau ofAviation, an advisory group,says he is advising a potentialcharter operator in west Africawhose options on aircraft areseverely limited by the localinfrastructure. “A lot of the air-fields are fairly short, and someare not fully surfaced,” he says.

VistaJet, the Switzerland-based private aviation company,has seen particularly strongdemand for flights between westAfrica and Europe, and fortravel between Nigeria, Congo,Ghana and Ivory Coast.

Thomas Flohr, chairman, saysVistaJet sees “major potential”

in the region, “particularlyamong business leaders andentrepreneurs in the energy andgovernment sectors who fly fre-quently within west Africa andbetween there and Europe.

“We believe it has the poten-tial to become one of VistaJet’sbiggest markets.”

The latest Business AviationOutlook survey from aerospacecompany Honeywell, releasedthis week, says Africa-basedoperators of aircraft are mark-

edly less bullish about the likeli-hood of buying new businessjets this year than they were in2009. But, to put that into con-text, their plans for fleet expan-sion over the next five years arefar ahead of North Americanlevels, while aircraft replace-ment hopes have been hit bydoubts about the sustainabilityof economic growth.

Dassault, the French manufac-turer of long-range Falcon busi-ness aircraft, says the South

African market in particular hasbeen “pretty active” over thepast couple of years. It has alsogained further government salesacross Africa this year.

Ashurst, the international lawfirm, has probably seen morebusiness aircraft finance dealsin Africa during the past yearthan any other big internationalfirm, says Paul Jebely, its headof aviation for Asia, the MiddleEast and Africa.

Deals advised on over the past

12-14 months have been for air-craft worth more than $400m.He says lenders are more likelyto remain closely involved thanin a wholly European deal, forexample, in order to make surethat the value of the aircraft isbeing maintained.

“Outside the regular concerns,what they are particularly con-cerned about are jurisdictionalrisks including political risks,”he says. “And as a tertiary con-sideration they concern them-

selves more with maintenance.”With the support infrastruc-

ture for business aircraft stillpatchy, Mr Jebely says therecan be a marked difference instandards of paperwork-keepingbetween smaller aircraft that flywithin the continent, and largeraircraft, such as the BoeingBusiness Jet, whose purchase hepreviously advised on – with thepaperwork on bigger aircraftmore likely to be in order.

“Lenders care about thisbecause it has a marked effecton re-marketability,” he says.

The lawyer, who based him-self in Hong Kong to be at thecentre of Asia, points to a cou-ple of significant African trends.“As high net worth individualsbecome ultra high net worthindividuals, they are tending toupgrade,” says Mr Jebely, whowas involved in the first pur-chase of a private Airbus A380superjumbo. The majority of thedeals he has done in Africa arefor individuals, he adds.

Another is that, despite thesharp competition between lend-ers, the private banks are look-ing for tight loan-to-value ratios– sometimes with a cap of just50 per cent.

But while European financiersdo lend for African business air-craft, most of the lenders areAfrica-based.

Many aircraft are put on off-shore registers – Bermuda andthe Caymans, for example – andnot just for the tax benefits. “Alot of deals will be structured soas to take advantage of regula-tory oversight from a very com-petent aviation authority,” saysMr Jebely. “That’s usuallydriven by the financiers. Andusually the borrowers are happyto go along with that.”

Mr Jebely reckons that SouthAfrica and Nigeria betweenthem account for more than halfthe African business aircraftdeals, although Angola is a fast-rising third. He reckons that thepotential is huge.

“I’m sitting in Asia, in thehottest aviation market in theworld right now, and I’vedecided that the main focus ofmy practice for the next twoyears is going to be both Africaand Asia,” he says.

“I’m certainly quite bullishabout African business avia-tion.”

AfricaRohit Jaggi notesmore demand forprivate charter flightsbut says infrastructureis still patchy

One in the bush: general aviation in Africa increasingly means private jets as well as bushcapable aircraft like the Cessna Caravan

‘Financiers areparticularly concernedabout jurisdictionalrisks, including politicalrisks, and concernthemselves morewith maintenance’

‘I designedthe helicopterI would want’

Frank Robinson was aveteran of battles withregulators even before heembarked on production ofthe aircraft that wouldmake his name familiar toevery helicopter pilot.

Having worked for sixaircraft companies, he tiredof trying to interest hisemployers in his concept ofa light, simple aircraft –and decided to build ithimself. But, starting in1973 in the garage of hisCalifornia home, he raninto opposition from theplanning authorities.

Unable, and unwilling, topay the fine imposed, thefledgling manufacturer

pleaded innocence, foughtfor a jury trial, anddefended himself. He wasfound not guilty.

That dogged refusal togive in was also vital whenhe sought certification ofhis two-seat helicopter.That took four long years.

In fact, the story of theRobinson R22 helicopterhas striking similarities tothe that of the Eclipse 500very light jet.

Both held the promise ofslashing cost of entry to anexclusive club – the R22was designed to be half theprice of existing lighthelicopters, and like thesix-seat jet from EclipseAviation, was intended tobe produced in largenumbers.

But Eclipse Aviationfailed in 2009 with only 261aircraft made. Meanwhile,Robinson Helicopter hasproduced not far short of10,000 aircraft at its base inTorrance, California –becoming the world’s mostprolific manufacturer ofcivil helicopters.

After it was certified in1979, the low-tech, piston-engined R22 sold at afaster rate than MrRobinson had imagined.

“I underestimated thetraining market,” he says.“I designed [the R22] to bethe type of helicopter thatI would want to have formy own personal use.”

That meant cheap andsimple. Advertisements in1979 from SloaneHelicopters, then sole UKdistributor, claimed108mph and 15 mpg, withlow maintenance andcapital costs. The initialprice was $40,000.

It also meant light butreliable, with a low-inertiatwo-bladed main rotor thatrequired special vigilanceby pilots. So much so thatUS regulators imposedspecific rules forinstructors and students.

“In the early days, wehad several problems thatdid give us a lot of trouble,and accidents,” he says.But he shrugs off questionsabout the difficulty offlying the R22, instead

stressing the rules on whocould instruct wereinitially far too loose.

When I learnt to flyhelicopters, I foundacquring the delicacyneeded to fly an R22 madeit easier to graduate intolarger, less responsivehelicopters.

Mr Robinson’s earlydream was of a machinethat would enable apersonal transportrevolution. “That hasn’thappened,” he says. “I hadillusions it would.”

But he quickly adds:“And I don’t think itshould. I wouldn’t like tosee everyone flying R22severywhere. The averageperson could learn to fly,but they don’t have the

judgment that would benecessary to keepthemselves and theirpassengers alive.”

The natural next step forthe company was a four-seater – the R44,introduced in 1992 at abase price of $135,000.Essentially a scaled-up R22,it has the same partsreplacement schedulesimplified into a 2,200-houror 12-year rebuild.

The first R44s hadweightier controls than theR22 but were harder to fly.Robinson had rejected thehydraulic control systemson the market and wasdeveloping its own, socustomers had to waituntil 1999.

“I would have loved tohave had the hydraulics in

the original 44,” MrRobinson says. “But it tooka while to make thechanges we needed.”

The company’s latesthelicopter, though, putsRobinson into a differentleague. A five-seater, theR66 uses a single Rolls-Royce RR300 turbineengine. It has a specificaim – to replace an ageingstar of the light charterand personal market, the206B from Bell Helicopter.

“I went ahead with theR66 because I knew therewere all those Bell [206B]JetRangers out there,” saysMr Robinson.

“They were getting olderand doggier. I knew wewould have a really goodreplacement.”

The company has about100 firm orders for the$800,000 R66. The helicopteris expected to win UScertification in days, andin other regions soon after.

For Robinson, likealmost every company inaviation, the credit crunchhas been painful. “Thebottom just fell out of salesin 09,” says Mr Robinson.Production of nearly 900helicopters the year beforewas halved. Some 300employees were laid off,from 1,400.

But the new helicoptershould come in time tocatch the upswing.

“From our perspective,everything is startingto go in the right direction.We feel very optimistic.”He expects improvement:“It isn’t going to shoot uplike it did back in 07 and08. It’ll be moresustainable.”

He stepped down aspresident and chiefexecutive in August at theage of 80, handing over tohis son Kurt. But he isstill the sole shareholder,and very much involved.

ProfileFrank RobinsonRohit Jaggi talksto the founder ofRobinsonHelicopter

ContributorsPilita ClarkAerospace Correspondent

Rohit JaggiAircraft Columnist

Jeremy LemerUS BusinessCorrespondent

Matt GarrahanLos AngelesCorrespondent

Liz MoscropFT Contributor

Anthony JamesEditor, Business JetInteriors International

Rohit JaggiCommissioning Editor

Steven BirdDesigner

Andy MearsPicture Editor

For advertising, contact:Hope KayePhone: +1 212 641 6548Email: hope.kaye@ft.com

Extending the range: the fiveseat Robinson R66

ON FT.COMView a videointerviewwith FrankRobinsonwww.ft.com/frobinson

FINANCIAL TIMES TUESDAY OCTOBER 19 2010 ★ 3

Corporate Aviation

Highf lier rebuildsbroken companies

Well-behaved women seldommake history. At leastaccording to Lynn Tilton theydon’t.

The outspoken founder ofglobal investment firmPatriarch Partners has ruffledmore than a few feathers inher time. She fearlessly chargesin where others do not,championing brokencompanies. This has paid off –her firm manages $7bn inassets and invests in more than70 mid-market enterprises.

The path to success has beentough. A single parent at 23, atthe start of her career sheworked 100-hour weeks atMorgan Stanley, jugglingmotherhood and spreadsheets.

Like many working mothersshe feels she did not giveenough to either. “I wasconstantly pacing back andforth between responsibilities,trying to be perfect at both,”she says. She has not stoppedmoving since.

She prospered on Wall Streetfor two decades until 2000,when she founded Patriarch,which specialises in rescuingailing businesses. She admitsthere are easier ways to makemoney, but is drawn to aidingthe distressed.

A key motivator was herfather’s death when she wasyoung, which shattered her andnow drives her to save

companies destined for thescrapheap. She says she derives“incredible satisfaction” fromchanging the lives of familieswho would otherwise bedevastated by the loss of aparent’s work.

Although Ms Tilton’sbusiness acumen is genderless,her language is definitelyfeminine, frequently focusingon the passion behind herdecisions – a trait that hasjarred with some, as such talkis seldom heard in the financialworld. She says it is her life’smission to rebuild brokencompanies.

However, she silences criticsby putting her money whereher mouth is. The most famousrescue in her portfolio ofemergency room bailouts is MDHelicopters (MDH) – HowardHughes’s baby.

Her involvement in MDH isalso the first time she publiclyexploited her gender tocommercial advantage. Thismonth the manufacturerreceived a US diversity awardas a Women’s BusinessEnterprise, which should giveit a vendor advantage withnational corporations andgovernment agencies.

Since buying the company in2005, Ms Tilton has raisedrevenues by more than $200m,mainly by selling more aircraftinternationally and addingrepairs to its portfolio.

Aerospace has been asteep learning curve. Forsomeone who is constantlyon the go, the procrastinationand paralysis she saw whenshe acquired the manufacturerwas a shock. “I was toonaive to know what I didn’tknow,” she says, “and too

stubborn to accept advice.”The acquisition was to prove

a turning point, propelling herfrom passive investor to activeindustrialist. As chiefexecutive, she has hired talentand pitched in to revive MDH’sflagging fortunes, flying aroundthe world meeting customersand suppliers who had given itup for dead. Wooing the angrysupply chain was necessarytoo, as Ms Tilton had notrealised that every helicopterpart had to be certified asairworthy by the FederalAviation Administration, sosimply switching suppliers wasnot an option.

She attributes MDH’ssubsequent turnround to beingone of her own customers – shecommutes to work in her VIPtwin-engine MD 902 – and saysevery business that looks atitself from the customerbackward is closer tounderstanding its clients’needs.

Her first task five years agowas to get MDH’s fleet ofgrounded helicopters flyingagain. She coaxed partsmanufacturers back into thefold and bought a house inArizona, where the company isheadquartered. Unlike many inthe sector, she treats theaviation industry as justanother market and believesvertical integration is the wayforward. With 500 suppliersscattered worldwide, sheelected to bring much of theproduction in-house to thecompany facility in Mexico,which saved 30 per cent incosts.

In 2008, the companydelivered 53 aircraft – up fromzero in 2005. Last year saw

several cancellations, so MsTilton turned her attention toforeign government contracts,which she hints will bear fruitin 2011 with severalannouncements to come.

She advocates manufacturingas the way out of recession forthe US, and points to the greatemerging economies, such as

Brazil and China, which arebased on a solid industrialbase. She has frequentlycriticised the Obamagovernment’s bail-out of bankswhile seeming to ignorelending to small and midsizedcompanies. Over the pastdecade, the US has lost 6.4mmanufacturing jobs, and Ms

Tilton believes liquidationmeans the loss of technology,knowledge and the impossibletask of restarting production.

She approached the WhiteHouse with plans for a public-private partnership to offerloans to small companies thatare outlined on her website.

Ms Tilton is likely to upset

those in high places for yearsto come. But she can takecomfort from the fact she ismaking her mark amongthousands who would bewithout employment but forher intervention.

Liz Moscrop is a journalistspecialising in private aviation.

ProfileLynn TiltonLiz Moscrop talks tothe chief executive ofMD Helicopters

Raised revenues: MD Helicopters is the most famous of Lynn Tilton’s bailouts Patriarch Partners

The office in the sky is nearly on board and online

For years, the aviation industrytalked of the “office in the sky”,where laptops and BlackBerry smart-phones – tied together by high-speedinternet – function perfectly, allowingexecutives to move seamlessly fromthe ground to the air.

Reality has often been different,with businessmen waiting impatientlyfor e-mail attachments to downloadand web pages to refresh over adial-up connection provided by satel-lite telecommunications companies.

But experts, transport companiesand industry executives argue thatthe long promised on board office mayfinally have arrived, as both the

demand for in-flight broadband andthe technology to enable it havereached critical mass.

“Broadband access on board aircraftis one of the hottest topics right now.There has been a tremendous amountof activity in getting high-speed accessup to the aircraft,” says Gary Harp-ster, a salesman with Duncan Avia-tion, a leading business jet outfitter.

After installing systems at the rateof about 10 or 15 aircraft a year formuch of the past decade, Duncan Avi-ation is struggling to keep up with thedemand. This year, it expects to fitout about 70 corporate jets and has abacklog to upgrade hundreds more.

For businessmen with more modestexpense accounts too, the optionshave expanded. By the end of 2010,some 2,000 commercial aircraft in theUS will have broadband access, upfrom a just a handful in 2008. By 2014,analysts argue, the global fleet couldreach 5,000.

Amy Cravens, with In-Stat, a mar-ket research company, notes that con-

sumers now have a suite of wirelessgadgets creating a real demand for onboard browsing. “Broadband, once adifferentiator, is now a competitiverequirement for airlines.”

At the heart of the revival is Aircell,a private company founded in 1991,which has pioneered the developmentof broadband access through the useof ground-based broadcast stations.

In 2006, Aircell bought a chunk ofthe radio frequency spectrum and by2008 it had built a proprietary US net-work. Since then it has signed upmost leading US airlines and kittedout more than 1,000 commercial air-craft, 200 business jets and won dealswith Netjets.

Michael Small says his company’stoughest challenge was to convincebusiness people that its Gogo servicedid not suffer from the same draw-backs as its competitors, which rentspace on satellites that were notdesigned to transfer lots of data.

“We seem to be just about crossingthat hurdle, where people really

believe that this is better. They haveseen it work on enough of theirfriends’ jets or they know that brand-name fractional jet operators haveinstalled it.”

Crucially, he says, the Gogo systemis lightweight, cheap and fast. It costsabout $100,000 per aircraft to install,and passengers are charged a connec-tion fee ($12.95 for a long flight). Con-nection speeds of up to 3.1mbps rivalthose found in some offices.

The cost issue marks a big break-through. In 2000, Boeing developed anill-fated satellite-based system thatcost about $500,000 to install for eachaircraft. By 2006, it had shut the pro-gramme, after failing to secureenough users to make it pay.

Still, Aircell is not without itsdrawbacks. Its air-to-ground systemis limited to the US, it has yet tomake a profit, and analysts worrythat its network will slow down asmore users are added. The companyalready limits access to video stream-ing to save on bandwidth.

Indeed, a number of satellite sys-tems remain in place, in part becausethey address some of those deficien-cies. Aircell itself offers some satellite-based products to give its private cus-tomers global reach, while competi-tors Row 44 and Panasonic are mak-ing headway.

One potential challenge to Aircellcould come from ViaSat. The Califor-nia-based company will launch a$300m broadband satellite in 2011 withenough reserved capacity for aviationusers to download movies at reasona-ble cost.

“We are trying to dispel the percep-tion that satellite broadband is slowand expensive,” says Mark Dankberg,chief executive of ViaSat. The com-pany plans to partner with JetBlue tooffer the low cost carrier’s customersa mix of free and paid-for services.Crucially ViaSat will sell broadbandto home users as well allowing it tospread the costs over a larger base.

There are some obstacles in the wayof every operator. For one thing, the

process to certify business jets ispainstaking, says Mr Harpster,because of regulations designed toprevent wireless devices from interfer-ing with key avionics equipment.

And for commercial providers, win-ning over airlines and kitting out theaircraft may be the easy part. Devel-oping the right business model to winover customers has proved more diffi-cult says Ms Cravens.

She notes that passenger take-uprates have traditionally been lowwhen fees are charged. This meansmaking the business work willrequire innovation – partnershipswith mobile telephone providers, adsales and so on – something compa-nies are still experimenting with.

Of course, getting things done onboard is a different matter. Mr Smallpoints out that across Aircell’s busi-ness jet and commercial fleet, Face-book uses up the most capacity.

“Most people say they sign up to dowork, but in reality they often doother things.”

WiFiJeremy Lemer examinesthe technology and findsadvances have been madebut there is a way to go

Interiors Welcome aboard

A lack of space and strictsafety rules can conspire tocreate rather bland cabinson business jets – unlessmoney is no object, in whichcase pretty much anythinggoes

For the uninitiated,travelling in a business jetrepresents the ultimate incool. However, in reality,many cabins are cramped,uncomfortable and far fromsexy, unless beige leatherhappens to turn you on.

What you are actuallypaying for is being able tofly exactly where you want,when you want avoidingqueues, with space andprivacy to work on boardwithout interruption. Soundsboring, and in most cases,interiors can be described insimilar terms – they areairborne offices rather thanflying gin palaces.

However operating anoffice in the sky is notwithout its challenges –keeping connected to theoutside world when travellingat more than 500mph at40,000ft is a complicatedaffair involving satellitewizardry – and this is wheremost end up spending theirmoney when specifying thecabin.

But you might as wellthrow in a live televisionsystem, some highdefinitionwidescreen monitors and aBlu Ray DVD player or two,just to ensure it is not allwork and no play.

Lufthansa Technik’s “Nice”system is a particularly goodbit of kit. Standing forNetworked Integrated CabinEquipment, it allowspassengers to change a CD,watch their favourite movieor adjust the cabin lighting

using one wireless touchscreen controller. It can alsoprovide WiFi internet accessor even connect to a tail fincamera, displaying imageson a screen inside. Isuppose you could alwayslook out of the window, butthat is so last century. Andfor technophiles, there is anapp that allows passengersto control cabin systemsusing iPods or iPhones.

Unfortunately ownerscannot simply pop down tothe high street, buy thelatest entertainment systemand stick it in their aircraft– aviation authorities aresticklers for safety. Strictrules relating to fire, smokeand toxicity, as well as whathappens to componentsduring a suddendecompression or crashlanding ensure only arelatively small pool ofsuppliers exists to cater tothe market – and they arefree to charge pretty muchwhat they like.

However, if you are reallystubborn you can adaptconsumer equipment foraviation use.

The owner of an AvroBusiness Jet (ABJ) regularlychartered to rock bandsinsisted he wanted a 42insurroundsound Bang &

Olufsen unit on board. Heeventually got his wish, butonly after substantialstructural modifications weremade to the screensurround to get it throughtests for shock, vibrationand emitted signals.

“It ended up costing£50,000 to certify andinstall the system and atleast one screen wasdamaged during theprocess,” reveals Design Q’sGary Doy, who worked onthe project.

Once you have finishedwith the entertainment, youwill probably feel like takinga nap – however this is notas easy as it seems. Aproper bed is impossibleunless you are on thelargest Gulfstream orBombardier aircraft.

Instead, more improvisedarrangements provide onlymarginal comfort: inflatablemattresses, collapsible seatsor convertible sofas that.

For a really good night’srest, executives need tocharter a Boeing BusinessJet (BBJ) or AirbusCorporate Jet (ACJ). Basedon the 737 or A320 aircraftrespectively, these have thespace for dedicatedbedrooms complete withkingsize beds.

AbuDhabibased charteroperator Royal Jet operatessix BBJs; three featureseparate bedrooms withadjoining bathrooms. “Thecost to hire a BBJ is$14,000 to $19,000 anhour, depending on route,customer need and which ofthe six BBJs the customerchooses,” says Royal Jet’sSarah WalkerKerr.

As for the bed, a fullyadjustable unit withelectronic controls is a snipat $180,000. Each unit isbuilt to order and mostinclude automatic pitchlevelling during flight toensure they maintain a trulyflat surface. Waterbeds areoff the menu – the threat ofcorrosion or an electricalfault from a leak rules themout on safety grounds.

If you are really concernedabout personal privacy andsafety, then a jumbo jetfitted with its own personallift is hard to beat.

US outfitter GreenpointTechnologies offers theAerolift – a groundtomaindeck elevator for a VIPBoeing 7478, providingelegant and secure boardingto avoid photographers orsnipers.

Such luxury does notcome cheap – the lift costsa cool $35m, while a VIP7478 interior is at leastthree times as much again.

However, for my money,the sexiest aircraft interioroption ever is the ABJExplorer’s Air Deck: whenparked on the ground, theside of the fuselage opensand a teakclad balconyslides out. Now, that reallyis cool.

Anthony James

Scrap the stairs: an Aerolift for a Boeing 747 costs $35m

4 ★ FINANCIAL TIMES TUESDAY OCTOBER 19 2010

Corporate Aviation

A factor of TenCessna’s unveiling of the Citation Ten,to take over from the $21.7m Citation Xthat has long been billed as the fastestcivilian jet, is much more than a shiftaway from roman numerals.

The more fuelefficient Ten will havenew RollsRoyce engines, a new Garminintegrated avionics system, and a“revolutionary” cabin managementsystem developed partly inhouse that,says Cessna, is “all about connectivity”.

It will also be 15 inches longer, have acompletely revamped interior, andfeature as standard the winglets that areapproved as aftermarket modificationsfor the current X, which has not had anysignificant changes since 2002.

But, while Cessna says it will bequicker than the old one, it is not sayingby how much. Gulfstream is snapping atthe heels of the Mach 0.92capable Xwith its G650 ultralongrange, ultralongcabin, business jet. The G650,which is currently working its waythrough its flight test programme, hasachieved M0.925.

Maximum speed “will be somethingthat we decide when we have tested theairplane,” says Joel Mugglin, productmarketing manager for the Ten.

However, Cessna’s preliminary cruisespeed chart shows a maximum cruise ofabout M0.918.

“It’s fair to say it’s faster than today’sairplane at the upper altitudes wherepeople are going to be operating it,”says Mr Mugglin.

Jack Pelton, Cessna president andchief executive, has in the past said tome that the Citation X would keep thehighspeed crown.

The Ten is aiming for certification in2013, price yet to be announced.

The Garmin G5000 system on theTen is an evolution of the avionicscompany’s revolutionary systems thathave brought sophisticated, flatscreentechnology to even the smallest generalaviation aircraft.

The Ten is the launch vehicle for theG5000, which is the first Garmin systemto be aimed at commercial airliners aswell as the upper strata of businessaircraft.

The system, controlled by two touchscreens, has also been chosen for threeother airframes, says Bill Stone, Garminavionics product manager. “That’s as oftoday,” he told me. “Call back tomorrow– it may be different.”

Lift for financingThe inaugural deal at Milestone Aviation,the first finance company to concentrateon the helicopter and private jetmarkets, will provide 100 per cent leasefinancing for Brazil’s Omni Taxi Aéreo tobuy two new Sikorsky S76C++helicopters.

The deal completed last month, willallow Brazil’s second largest helicopter

operator to meet growing demand fromthe offshore oil industry.

Hopes are high in business aviationthat Milestone, set up by former NetJetsexecutives, will help to take the crisisout of funding.

Wanting in visionHe may have extended the boundariesof helicopter ownership, and use, forever, but even Frank Robinson’senthusiasm about spreading the H wordhas to bow before some forces.

One of which is the weather. MrRobinson’s attempt to visit theheadquarters of one of his helicoptermanufacturing company’s two UKdistributors was delayed by a fog thatrefused to burn off until much later thanhis scheduled arrival time.

After the usual seemingly interminabledelays to see whether the weatherwould improve – in my experience muchmore a feature of flying inNorthamptonshire than in Torrance,southern California, where RobinsonHelicopter is based – he was forced toresort to the road to reach SloaneHelicopters at Sywell Aerodrome.

But at least the mist lifted during theafternoon. Enough for the helicopter hewas due to travel in – one of his ownR44 fourseaters, of course – to have noproblems with the short hop to near hishotel at Heathrow.

He did not take the controls himself.In fact he tells me that he has cut backon his flying. “And I plan to continue,partly because I have given so manypeople my word that I am going to liveto be 100 – or more.”

FLIGHT LINESRohit Jaggi

Hopesfade forearlyrecovery

ness jet market could be dividedin half by value, with the topconsisting of jets costing $25mor more (in 2010 dollars) and thebottom of those costing lessthan $25m.

These halves have risen andfallen in tandem for most of thepast 20 years. But in this down-turn, deliveries in the bottomhalf plummeted in 2009 by ahuge 42.8 per cent – the worstdecline of any aerospace marketin this recession.

Yet deliveries at the top endstayed almost constant, fallingby only 4.1 per cent by value.

The split has been evidentamong leading manufacturers,with companies that focus onthe top end, such as Dassault ofFrance, doing better than thosemore reliant on smaller aircraft,such as Cessna.

Mr Aboulafia says the mostobvious explanation for thisdivide in the market is thatsales of the cheaper aircraft aremore dependent on small andmidsized businesses that aremore sensitive to an economicdownturn.

They are also more likely tobe dependent on getting creditand since this downturn hasbeen marked by a credit crunch,that may explain why they arehit harder than the top half cus-tomers.

Another reason could lie incontinuing woes of fractional jetoperators who are big customersfor bottom-half planes.

According to Honeywell, deliv-eries of new jets to fractionalfleet operators were down 80 percent in 2009. Only three new jetswere shipped to customers inthis part of the market in thefirst half of 2010.

Looking further forward, Hon-eywell, which bases its outlookon a survey of 1,200 corporateflight departments around theworld, says purchase expecta-tions in North America remainlargely unchanged.

But expectations in otherparts of the world have sof-tened, most noticeably inEurope and the Middle East,and to a lesser extent in LatinAmerica and Asia.

Asian purchase plans revealedan 18-point decline comparedwith last year’s survey, butremain high compared withother regions and historically,says Honeywell.

“The slower recovery of majortrading partner economies andsome concerns regarding export-fuelled growth and Chinese realestate markets has increasedthe caution level operators dis-played in the 2010 survey.”

When all the regions arecounted together, Honeywellsays operators plan to replace 30per cent of the global fleet overthe next five years.

That is still a relatively highfigure, says Honeywell’s MrWilson.

In addition, Honeywell saysdespite cancellations and defer-rals, there are several thousandaircraft on order, many newmodels for delivery after 2011.

“Assuming economic recoveryprogresses, it is still likely deliv-ery of these aircraft will betaken, proving a boost to ship-ment levels as we move into the2012-2013 period,” it says.

So how would Mr Wilson sumup his views on the industry?“Guarded,” he said. “Cautious.”

It is likely to be some timebefore that impression changes.

Dassaulthopes forlift fromwinglets

The split in the businessaviation market thatfavours larger jets isproving good news forDassault Aviation.

The French company willannounce this week that, for itsbig Falcon business jets, balanc-ing the 34 new orders fromaround the world in the firstthree-quarters of this yearagainst cancellations, net salesso far in 2010 are minus one.

That may not sound like any-thing to boast about. But lastyear Dassault lost far moreorders than it gained – the netloss stood at more than 100. Bycontrast, the company is confi-dent it will end this year in posi-tive territory.

And in what the aircraftmaker calls a very tough mar-ket, the backlog of 500 orders forFalcon 2000 twin-engined jetsand Falcon 900 and 7X triplesthat Dassault built up by theend of 2008 – before it started tofeel the effects of the financialcrisis – has given it some roomto manoeuvre.

Despite the economic crisis,and despite all those disappear-ing orders, 2009 saw a record 77Falcons delivered. This year,production is on track to beatthis record again, with a tallyexpected to be close to 90.

But the company is alreadyslowing production for nextyear. And it does not expectorders to pick up greatly in 2011.

Against this backdrop, Das-

sault is hoping that its new$42m Falcon 900LX, an upgradeto the 900EX with aerodynamictweaks aimed at improving per-formance and efficiency, willhelp by giving extra ammuni-tion to its sales force.

I flew one fresh from the pro-duction line in Bordeaux, beforethe aircraft had been certifiedand before the first example hadbeen delivered to a customer –two have since, both to US buy-ers.

The Falcon 900 aircraft sharewith their Falcon 7X sibling atriple-engine layout that isunique among business jets.The first of the 900s, in the early1980s, was the first business jetto be computer-designed. Andthe range-topping 7X, intro-duced in 2007, was not onlydesigned using Dassault’s owncutting-edge virtual designtools, but was also the first busi-ness jet with fly-by-wire con-trols.

The 900LX adds blended wing-lets to the ends of the wings ofits predecessor. These verticalfins, like those on the 7X, aredesigned to cut drag by smooth-ing out the turbulent air spiral-ling off the wingtips.

Philip Deleume, Dassault chieftest pilot, puts it in figures.“The winglets give 10 per centbetter climb performance,” hesays, “and 5 per cent better fuelefficiency in the cruise.”

As we climb aboard theunpainted 900LX on a fiercelyhot day in Bordeaux, Mr Dele-ume points out that the win-glets also leave more in reservein high temperatures, and athigh-altitude airports. And theperformance of the previousmodel was already good. Boliviathis year decided to buy a 900EXfor use as a presidential trans-port; El Alto airport, which

serves the administrative capi-tal La Paz, has an elevation of13,325ft.

Stepping inside the LX, anunfinished interior matches theoutside – this aircraft’s nextflight will be to the DassaultFalcon completion centre in

Arkansas. Customers can selectfrom a range of standard interi-ors with seats for up to 19, a bigbaggage area accessible in theair, and a sizeable kitchen.

Strapped into the left-handseat, much is familiar from theFalcon 7X that I flew last year.

The 900 does not have the auto-throttles of the 7X, however.Pushing forward the powerlevers at the start of Bordeax’slong runway brings in the threeHoneywell TFE731-60 5,000lb-thrust turbofans.

According to Dassault, thereis no maintenance cost penaltycompared with twin-enginedrivals – but the third enginegives higher safety reservesfrom short runways and cross-ing oceans.

We are far below the 900LX’smaximum take-off weight of49,000lbs, so acceleration issprightly, Leading-edge slats aswell as flaps help keep runwayspeeds low – even with full fueland six passengers, take-offspeed is 133 knots – and as wetake to the air the climb rate isdefinitely sporty.

As is the handling. Falcon900s use rods rather than cablesfor control runs, giving a directfeel to the controls that servesas a reminder of the aircraft

maker’s fighter jet heritage.Mr Deleume, in the right hand

seat, is a former military pilot,and the company’s test pilotsnot only tend to come from mili-tary flying backgrounds, butalso test Dassault’s fightersalongside its business jets.

The range of the LX isimproved over the EX by morethan 250 nautical miles, giving atypical maximum, with healthyreserves, of 4,750 nautical miles,or about 11 hours 15 minutes.From New York, London andRecife are within range.

The LX is expected to receiveapproval to operate from Lon-don City’s demanding runwaynext year, but even from thereHalifax in Nova Scotia is withinrange, as is Almaty to the east.

We venture somewhat less farfrom Bordeaux. Returning tobase, a landing speed of just 110knots slows everything downenough for a first touchdown inan unfamiliar type, at an unfa-miliar airport, to be a relaxed

affair. Landing need only takeup 2,415ft.

Dassault says the fuel con-sumption of close rivals such asthe Bombardier Global 5000 andthe Gulfstream G450 is up to 60per cent higher than that of the900LX. And the fuel consump-tion of the Gulfstream is equiva-lent to more than half of thetotal variable and fixed costs,including fuel, of the Falcon.

Savings over rivals at thepump alone for a single eight-hour flight could amount to$3,000 dollars. And of courselower fuel consumption meanslower emissions, too.

With the flight path of theeconomy still far from clear,efficiency is a vital factor forbuyers and operators of busi-ness jets. The 900LX’s creden-tials in this area, combined withreassuringly safe handling char-acteristics, should make thisparticular bird an asset in Das-sault’s efforts to keep putting itsFalcons into the air.

Flight testRohit Jaggi fliesthe numbers in themore fuelefficientFalcon 900LX

Fresh from the line: aerodynamic tweaks give the Falcon 900LX 5 per cent better fuel efficiency in the cruise

ON FT.COMSee Rohit Jaggi’sflight test of theFalcon 900LXon videowww.ft.com/falcon900lx

and other flight tests atwww.ft.com/corporateaviation

Oftused location launches stars into the skies

For the globe-trotting actor or musi-cian rushing from to the next set orgig, flying by private jet is a conven-ient way to travel.

Southern California, the home of theentertainment industry, has plenty ofgeneral aviation airports from whichover-scheduled or privacy-seekingcelebrities can fly. But none is as big asVan Nuys, a 730 acre facility in the SanFernando Valley.

The airport has had a long relation-ship with Hollywood and has been usedfor countless film and television shootsover the years. It regularly features inEntourage, the HBO comedy about thelife of an A-list actor and his friends,who invariably use Van Nuys whenjetting off to a glamorous location.

“Film and music industry executivesuse Van Nuys,” says Jess Romo, the

airport manager. “And there’s no doubtthat the airport is attractive to A-listcelebrities because of its proximity toHollywood, Beverly Hills and west LosAngeles.

Van Nuys has a pedigree thatstretches back to Hollywood’s goldenage: the climactic scene of Casablancawas shot there. More recently, TrueLies, Lethal Weapon and AmericanBeauty have taken advantage of its sizeand film-friendly policy.

Van Nuys is the second busiest gen-eral aviation airport in the US, says MrRomo: only Deer Valley in Phoenix,which is used by a large number offlight training schools, is busier.

There is plenty of local competition.Santa Monica Airport buzzes with pri-vate aircraft but has restrictions on thesize of jets that can take off and land atthe facility because of noise considera-tion for nearby residents. CamarilloAirport in Ventura County is also usedby corporate jet owners.

Van Nuys, though, is on a differentscale. “We’re bigger and are a friend-lier airport for the corporate-type air-craft than Santa Monica,” says MrRomo. Van Nuys has two runways –

the longer is 8,000 feet – and canaccommodate aircraft as large as a Boe-ing 737.

The airport is taking steps to reducenoise pollution, though, and by 2016will no longer allow older, noisier air-craft to take off and land. This willapply to some Learjets and Gulf-streams built in the 1980s, Mr Romosays.

The size and flexibility of Van Nuyshave made it a popular choice for LosAngeles-based corporate executives andbusiness owners, although local ownerswho fly for pleasure also use the air-port. “Over the years we’ve gone fromserving only local flyers to more corpo-rate customers,” explains Mr Romo.“The majority of the aircraft basedhere are business aircraft.”

The airport’s size has “helped theregion grow economically,” he adds,saying it has generated more than$1.3bn for the southern California econ-omy in indirect spending.

Supporting film and TV productionhas raised the airport’s profile but italso ensures that money goes back intothe local economy. Antonio Villarai-gosa, the mayor of Los Angeles, was

keen that Van Nuys be as film-friendlyas possible and although fees have topaid to use the facility it is an inexpen-sive place to shoot.

“Our core business is as an airportbut we also want to make sure weleverage the asset with filming,” saysMr Romo. “Supporting local film shootshelps to create jobs.”

The airport itself employs about 55people full or part time, and an addi-tional 2,000-3,000 work at the facility,

employed at its hangars, its hotel or atits aviation school. Mr Romo saysabout 12,000 local jobs are indirectlyrelated to the airport and its activities.

Van Nuys is part of Los AngelesWorld Airports, which includes LAX,the region’s main global hub, andOntario airport, which is 35 miles eastof downtown Los Angeles.

LAX featured prominently in theABC series Lost but Van Nuys is themore commonly used shooting loca-tion. “In any month we’ll probably getas many as seven requests to shootfilms,” says Mr Romo. “We probably do60 a year.” These include commercials,music videos and TV programmes:Dancing with the Stars, DesperateHousewives and Sons of Anarchy haveall shot at Van Nuys recently.

But for Entourage, the airport hasalmost become as common a locationas the Beverly Wilshire hotel or theoffice of Hollywood super agent AriGold, played by Jeremy Piven. In thefourth series of the programme, themain characters run into hip-hop starKanye West at Van Nuys, who thenpromptly offers them a lift to theCannes film festival in his jet.

AirportsCalifornia’s Van Nuys has along relationship with film,says Matthew Garrahan

Filmfriendly: Van Nuys airport

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