Plane Conversations

An October 14 article in the Wichita Eagle by Molly McMillin says the aviation manufacturing industry in Wichita is waiting on the rebound of the economy and the business aviation market.

If you are leading you don’t sit around and wait on anything or anybody. You blaze a trail and create your own economic recovery.

The true innovators in the history of modern economies did not wait on rebound, they created it.

In business aviation will we allow our fates to be tied to decisions made by the government, by economic down turns and up turns, by someone else’s innovation and prosperity? If so we are in trouble.

A recent post by Dan Robles  of the Ingenesist Project stated the following:

The invention of the wheel, wedge, and pulley came long before the invention of credit scores, CDO’s, and International Trade Agreements.

Technological Change must always precede economic growth – economic growth cannot sustainably precede technological change. If you throw money at a problem, you are not guaranteed technological change.  If you throw technological change at a problem, you are guaranteed money.

We are going about the process of globalization as if economic growth can precede technological change.  This is the tiny flaw of market capitalism and it is unsustainable.  In short, we’ve gotten it backwards and continuing on this course prevents us from seeing the future.

Sadly to me it seems that our industry is stuck in a mindset that we will be in a “no growth mode” to “slow growth mode” for the next few years. That means no new jobs, maybe even a few more layoffs,  and those of us who are here today will be fighting for a piece of the pie that is not going to get any bigger anytime soon.

A good example of innovation driving a market is the personal computing industry.  The market has grown because price went down at the same time computing power went up. The growth has been exponential, not in small increments. And because of that growth, billions of people have the power in their hands to communicate and connect that we could not have imagined 20 years ago.

What about the growth of social media as a way for people to connect? Facebook surpassed 500 million users this summer. Who could have predicted the adoption rate of social media 5 years ago? Did any of us have social media in our marketing plans in 2005?

So if we want our industry to grow, and the manufacturers of  business aircraft can’t innovate fast enough to deliver a faster less expensive machine like the personal computing industry, then what do the rest of us to do?

Can we innovate, through the use of social technology, to offer travelers a new solution?

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An article in CAIXIN Online  states that China is opening up a low altitude segment (less than 1000 meters) of its airspace for General Aviation. This may seem like small news since you can’t do much with business aircraft below 3000 feet, but it is really the beginning of a change that will have a major impact on the growth of General Aviation in China.

A friend of ours in China followed on with an email yesterday that said “Beijing  Lanzhou and another 3 cities have opened the low altitude airspace for policy trial yesterday”.

Wichita is sitting around waiting on the rebound in the US and World Business Aviation market and the opportunity is about to be unleashed in the largest country in the world. Maybe a little more attention should be focused on the largest market opportunity for Business and General aviation for the next 20 years?

Here are some interesting excerpts from this article about the potential in China:

According to a research report from the State Council, China’s general aviation sector is at an “initial stage of quick growth.” The report expects China’s general aviation aircrafts to increase to up to 100,000 units. Currently, only 1,000 general aviation aircrafts are operated in China, compared with more than 200,000 in the United States

In case anyone missed that: “units” mean “aircraft” and the numbers were growing from 1,000 to 100,000.

According to the report, as the world’s largest aviation market, the U.S. has seen its general aviation industry create more than US$ 102 billion in value every year, accounting for more than one percent of the country’s GDP. Liu Ping, chief editor of the industry journal China Civil Aviation said that the effective access to low altitude airspace will create 100 million yuan in growth within the general aviation industry as well as large number of job opportunities.

China’s government seems to understand the impact that aviation would have on economic growth by viewing the impact of General Aviation in the US. I think maybe they get it more than the politicians in Washington DC. A growing General Aviation market means new and well paying  jobs.

One of the limiting factors for China opening up airspace will be overcome if they can implement a satellite based air traffic control system. By doing so they would leap ahead of the US who is using 1960’s technology to control air traffic flow through ground based radar. Presently China is working with limited air traffic control capacity and using systems that are also outdated and restrict traffic flow in major hub airports.  

The question is: How long will it take for China to address the issues that really open up airspace for practical use of business aircraft? Can they open up the airways for real air traffic flow as they have done on the ground with the massive road building projects?  

When they do address these issues the sky will be the limit.

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In less than three weeks those of us in the US will go to the voting polls to cast our votes in what we call the mid term elections, mid term between the four year interval of the Presidential election cycle. This election is probably the most important one in my 32 years of being old enough to vote.  

We are now two years into a new presidential administration, and the economy is still not healed from the crisis that became apparent two years ago when the banking industry started collapsing. Unemployment is in a  holding pattern at near 10%.  

This administration did not cause the crisis and is glad to let us all know that they inherited it. This administration also has the misguided belief that “big government” in Washington can solve the problem by becoming “bigger government”.

Congress on the other hand can’t point the finger to the politicians that are no longer in office. Most of the leadership that is in place today in Congress, in both the Senate and the House of Representatives, has been around for a long time. Possibly too long?  

So what does all of this have to do with Business Aviation in the US?

Business Aviation is dependent on the success of all business in the US economy. Or maybe better put, the success of business aviation as an industry is intertwined with the success of the economy. Those of us in this industry believe we are a contributor to the overall prosperity of the economy by increasing the efficiency of business through time saving and productive travel. Our industry contributes to the success, but also feeds off the success of the economy. If the economy is productive and prospers then individuals and businesses have the ability to use business aircraft as a means of travel, both in their business and personal travel needs.

A big majority of the elected politicians and those that feed off of the system in DC believe that prosperity emanates from inside the beltway. They have lost touch with reality. They do not understand that that the real prosperity, that has built this nation, comes from small and large businesses alike, and the men and women work in those businesses; People who innovate, create and produce goods, services and new knowledge that increase the standard of living.

When you go to the polls to cast your vote, think about voting for the candidate who is most likely to support small business and free market capitalism. Has the candidate ever started, run or worked in a small business? Have they ever stayed up late at night worrying about how they can make the payroll on Friday and the year end tax payment? Have they created jobs and paid health insurance and contributed to retirement accounts by putting in long hours delivering a product or service that the market values? If not, are they close to someone who has?  If so, then they probably get it.

Who are the politicians that are friends of Business Aviation?

I would posit that those politicians who understand businesses, large and small, must prosper in a global economy are friends to our industry. Those who understand that wealth creation is not a bad thing, because a poor man can’t give another one a job, are friends to business aviation.

When the US economy prospers, then our industry will be one of the ships that rises with the tide. If the ecnomy sinks the only people riding in business jets will be the politicians.

Party politics don’t mean much to me. There has been a lot of sell out to big government and fiscal irresponsibility on both sides of the aisle.

It is time for a change with people serving us in Washington who get it and will not forget who they work for.

Consider seriously who to vote for and make sure to take the time to cast the vote on November 2.

Business Aviation needs people in Washington who understand Business!

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An economy is defined by, or limited by, time and productivity. Value is created in an economy when an improved use of the resource of time creates gain in productivity.

The purpose of travel by aircraft is to gain time over other means of travel, time that can be used to create new value.

Inside the experience of travel the journey itself can either add to or subtract from productivity. If I can be productive while traveling I gain value during the travel in addition to the gains on both ends of the journey.

Every day, those of us in business aviation, witness the gains in productivity both in time saved and in the positive experience of travel by private and business aircraft.

Business travelers who have experienced this form of travel know what I am talking about.

Business travelers who use the airlines will testify to the negative impact on productivity from the time drain and wear and tear of airline travel.

The airlines, and the system they have created around the hub and spoke, have done a lot to try and ease the journey by creating nice terminals with food, shopping, and wifi connections to the Internet.  However, am I more productive sitting at the Airport Starbucks on my laptop for three hours waiting on the connecting flight, or being at my destination three hours earlier?

What about the time en-route?

If I can conduct a meeting in the air with clients, vendors or fellow workers what’s it worth?

When is the last time you had a business meeting while traveling on an airline in coach class or even in business class?

Business aviation wins hands down both in time saved in the journey and productivity experienced during the journey.

So why doesn’t everyone travel using a business aircraft?

Price and perceived value!

Business aviation is expensive when compared to the perceived value.

If our industry created a true cost-productivity calculator application that took into consideration not only the value of the time savings, but just importantly the productivity gains experienced during the journey, would it change the perception of the value of business aviation?

The technology is here today to do this.  

I would challenge our friends in the tech sector to come up with an application that calculates the “true costs” of the various modes of air travel.

What would an application like that be worth to those of us in Business Aviation?

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Today marks the one year anniversary of this site we call Plane Conversations. When we started we knew what we wanted to accomplish but did not have an idea of where the hard work would take us in the first year.

This post is the 338^th by the writers, 14 in number, who have contributed. The page views according to the stats number about 45,000 in the first year. I can’t tell you whether that is good or bad. I like numbers, but quality seems to outweigh quantity for me after the first year in the world of social media.  

I am grateful to everyone who has contributed for their perspectives and stories about aviation. It would have gotten pretty dull had it just been me.   

About the same time we launched this site, we also made a strategic decision to use tools of Social Media to communicate to our market, our peers and those we hope to do business with. Today we have active Facebook friends numbering 1360, with several Facebook pages covering the different areas of our businesses. We also actively communicate through Twitter, as well as distributing our blog content through numerous other sites and social media applications. All of this has helped us reach and meet new people across the globe.  

At the outset we hoped to reach the audience of travelers who need Business Aviation but just haven’t realized it yet.

I believe in looking at our readers in the first year that we have communicated more to our own, those of us already in the business of aviation.

That’s OK though, because what this site has brought us are new relationships with people in business and general aviation around the world. Chances are we would have never met most of you any other way and that makes the effort worth it.

Who knows where the beginnings of these new found relationships will lead, but my hope is that we will mutually prosper. Maybe the shared knowledge will help us all in some way even if it is small. Many people have taken the time to read these posts and the hope is that the time was not wasted.

What are the lessons learned so far? 

• If you want to launch a blog site and contribute regularly be prepared for a serious time investment. It is much harder than I thought it would be.  
• You think you know what people are interested in but you really don’t know until you put it out there.
• Moving forward I want to spend more time thinking about what to write and put more effort into the quality of the posts and worry less about the quantity of posts.
• The more perspectives and stories we get from different people the better. After all this is a conversation, and conversations are best when there are more people participating.

Over the past year I have seen Business Aviation start to wakeup to the power of using social media and its technologies to communicate our message. Each week I become aware of new people on Twitter and Facebook. The ability to move the conversation to the positive in our industry has been tremendous. For the most part I believe we have silenced or at least neutralized the mainstream media bias against our industry; the bias that we were an industry for the rich and famous only.

I have seen the technology of social media develop so fast that no one can keep up with all of the changes happening. As Facebook and Skype come together in an integration of their communication services over 700 million people will be using the two together. That is a staggering number and it will grow.

Is there an opportunity to reach this audience with the message of our industry and what it can do for people’s time and lifestyle? There has to be, so maybe the best is yet to come.  

Thanks to all of you have taken time out of your busy lives to read a post or two.

Thanks to the writers, and especially Jon Anne and Rachel who have not only written, but contributed by editing and proofing the rest of us, as well as distributing the posts out to all of the other sites and applications. Your tireless efforts have made this happen. It has been a true team effort.

A big thanks to Benet, Rob, Clint, Paula and other friends who have promoted our message and site in a social way. We have learned much from you and will continue to listen and learn. 

I look forward to this next year and what it will bring to those of us in Business Aviation who have weathered the storm of the past two years. Never before have we had the opportunity to tell our message like we do now. It will be great to see the impact that “Social Media”  has on Business Aviation.

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A September 27 press release  by the National Business Aviation Association applauds the President for signing a piece of legislation for small business that includes a provision for bonus (accelerated) depreciation for strategic business purchases. The provision includes new aircraft and major aircraft components such as new avionics, interiors and engines.

 This law is good news for small businesses in the aviation services sector as well as manufacturers of business aircraft. For companies considering the purchase of a business aircraft, or doing upgrades on their existing aircraft, there has never been a better time to make the purchase decision. Manufacturers and service providers are hungry for business.  The combination of aggressive pricing, and the tax advantage of this new legislation, will hopefully stimulate spending for those who are close to the decision already.

I don’t want to sound negative at this point, but this legislation is more of a band aid to a problem than a cure. The business aviation industry in the US has a chronic and severe cold and bonus depreciation will relieve the symptoms for the next year which will make us all feel a little bit better. It will not cure the problem.

For the manufacturers in Wichita it will keep people employed, and for those of us in the maintenance business it will hopefully generate sales of aircraft equipment upgrades.

What we really need is a cure for the root problem which is lack of demand.

Until more business and leisure travelers can afford to fly in private aircraft the industry will continue to languish or at best have a slow growth that mirrors the economy we are in.

A few percentage points of growth as a best case, or stagnation as a worst case, does not put people back to work in long term jobs.

Travelers who use business aviation are passionate about the experience, benefits, and value of flying by private aircraft. The limiting issue seems to be price. Everyone I talk to wants to fly in the private jet but not everyone can afford the price.

Over the long haul, if we are to cure the problem of demand, we must solve the price problem in our industry. A lot of manufacturing and service jobs in aviation are at stake, so it is worth thinking about a solution.

The technology sector of our economy has solved this problem of price and now everyone can afford mobile computing devises with computing capacity that could only been dreamed of a few years ago.

Surely our industry of business aviation can solve this problem as well.

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Over the last year, I have frequently been asked how it is going in our business. To be honest, it has been a rough ride for most of us in aviation.  These sincere questions that I get about our business and the industry we work in come from vendors, customers, friends and family.

My answer is usually something like “it feels like treading water with concrete filled boots …. but we are still above water.” Most of our peers in business aviation and many in other industries say the same things. Never have we worked so hard just to stay even or dig out of the hole.  

Two years into the toughest economic conditions I have seen in business aviation, the media reports that we are no longer in a recession.  That may be true, but progress seems to be measured in inches rather than in nautical miles.

Flight activity reports from Avinode and industry trade associations are optimistic, showing slight increases. Fortunately, businesses and individuals have not stopped flying in business and private aircraft; so, our part of the world seems to be picking up nicely in the third quarter of this year.

But when I speak with friends who are out there selling new aircraft, peers in the charter and aircraft management business, and vendors who supply our industry with fuel, aircraft, parts and support services I get different feelings about recovery. While we may be seeing an uptick in charter, ask the aircraft manufacturers in Wichita if the recession is over.  If not for government related aviation spending and international demand for new aircraft, the aircraft manufacturers would be hurting even worse than they are.

It seems that not too many businesses are buying new aircraft in the US, and the reversal of this trend could be years in the making. There is a huge inventory of used aircraft right now and the prices are lower than at any other time in the last 30 years, at least in relation to the price of new aircraft. Manufacturers are discounting new aircraft off of list price, something that was practically unheard of in this industry even as recently as three years ago.

So what is the solution, short of accepting that we will just be here in the trenches for the next few years and will have to slug our way out of the aviation recession?

I don’t know the answer, but the question is certainly worth considering by those of us who don’t want to accept that the current situation is what must be.

It seems that in the history of the United States, game changing innovation has spurred major growth. The railroads connected the country, opening up new markets.  Mass production and the automobile opened and connected the country even further, creating millions of good jobs.  And in the last few decades, technology innovation created a whole new economy.

The barrier to growth in business and private air travel seems to be price. To surmount that barrier, either more people need to attain the financial ability to take advantage of private aviation or the price has to come down. Either solution works just as well for growth in business aviation..

We can’t do much to affect the affluence of the overall population; but, we can innovatively lower the price of private aircraft travel to bring in a bigger audience.  Three decades ago, Southwest did this in the airline industry and changed the demographics of airline travelers. I don’t know that private aviation can do exactly what what Southwest did; however,  there must be a combination of solutions that, in aggregate, will change the pricing of business aviation to bring in a larger customer base. 

One thing I feel certain of is that the growth and restart of this economy, in general, and of the business aviation economy, in particular, will not come from any government program.

So, let’s not wait on the politicians for the answer. Let’s create our own recovery!

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On a  recent Lineage 1000 demonstration flight tour in the United States, Embraer Executive Jets Regional Sales Manager Cameron Gowans invited me to experience this aircraft firsthand by riding along on a repositioning flight from Dallas to Chicago.  In spite of the fact that I grew up in business aviation, I have never before had the opportunity to ride on an aircraft of this caliber.  And, I can tell you that it took some time for me to get over the “Wow!” factor.  

Approaching the aircraft, you believe are about to board an airliner which, in fact, you are. Built on the E190 series airliner, but with additional fuel for long-range flights, the Lineage 1000 is Embraer’s top of the line executive jet. The size of the aircraft is really closer to an Airbus 318 than any corporate jet made and, in airline configuration, it carries 94-112 passengers. For the Lineage 1000, Embraer advertises over 25 different cabin modules that allow you to customize the aircraft to fit your mission requirements.  The aircraft I flew in is configured with a beautiful executive interior that seats up to 19 passengers.

On our short, two-hour flight, I got the full tour of the five distinct cabin zones, including the aft-most zone containing a bedroom with private bathroom and stand-up shower.  The 19 passenger configuration could easily accommodate all of those passengers with no one feeling at all crowded. There is also plenty of baggage space for a full load of passengers and the baggage area is accessible from the cabin.

The design of the cabin makes for a more pleasurable passenger experience by controlling both noise and pressurization.  In both take-off and cruise, the cabin was quiet enough to carry on a normal conversation with fellow travelers.  And, at a cruising altitude of 41,000 feet, the cabin altitude is 7000 feet which reduces travel fatigue over aircraft with lower pressurization differentials. 

As far as cabin size, this aircraft falls between the Boeing BBJ / Airbus 318 and the Gulfstream G550/ Global Express. While the Lineage 1000 is comparable to the G550 in purchase price, in terms of cubic volume in the cabin, the Lineage 1000 has more than twice that of the G550. However, with a non-stop range of 4200 nautical miles, the Lineage 1000 does not match the 6750 nautical mile range of the Gulfstream G550.  So, while you can go non-stop from Chicago to London, London to Dubai or Dubai to Beijing on the Lineage, a trip from Chicago to Tokyo would require a refueling stop.  The question then becomes: are you willing to trade cabin size and comfort for increased range?  Since the typical missions for many companies never need the full range of the aircraft, the question may not need to be asked.  And, given my experience in the cabin, even if you do have to make a fuel stop in the Lineage, you would not feel the need to depart the aircraft.  Sitting in the cabin feels much more like being in a high end condominium than in an aircraft.   

The aircraft is state of the art design with fly by wire controls and the latest in avionics technology. It is built on an airframe designed for the rigors, reliability and economic  requirements of airline service; so, maintenance reliability should be excellent and should continue to improve as the E190 series accumulate fleet time in airline service.

Entering the cabin, you get the feel of being in an aircraft that could easily be the transportation for a head of state or an executive for a large multi-national company.  For governments, companies and high net worth individuals with international travel requirements who are looking for mission capable executive transport, this aircraft will fit a niche in the market.

Hats off to Embraer for continuing to innovate and bring new solutions for executive transport to the market.

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In a September 2 post I discussed Congressman Oberstar’s statement that possibly we should consider re-regulating the airline industry. His opinion is that the mergers happening between major carriers are bad for the consumer and will leave them with fewer choices, higher prices and less service.

I am opposed to regulation of the airlines in matters of customer service and free market competition. With the exception of matters of safety, I believe the government should step aside and let the market work things out. The government does not have a good track record meddling in matters of the free market.  

A September 5 blog by William Swelbar at www.swelblog.com has been posted that intelligently puts the facts out and further convinces me of the government’s need to get out of the way. The blog title, “Dear Chairman Oberstar: What Do You Mean This Is Not What You Voted For?” sets the tone of this post.

If you are interested in this issue Swelbar’s post is a well written argument on the history and merits of the deregulation of the airline industry that happened in 1978. Jump over to his site and take a read .

Even though business aviation and general aviation compete with the airlines for some portion of the travel market it is still good for the economy and the aviation industry as a whole to have a free market system of profitable and competitive airlines to keep our economy moving.

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Riding down the road one day, an Aerosmith song blared out of my radio and, for whatever reason, I thought about language – specifically, how terminology can be exclusive to an industry. No doubt, Joe Perry hears or thinks the word “guitar” on a daily basis, but how often does the word “aileron” enter into his conversation? Every industry has a lexicon of its own and, if you’re going to learn to operate within the industry, you’re going to have to learn the language. To that end, we’ve compiled a list of terms commonly used in the aviation world. This list is more for business aviation, rather than actual flight language.

FBO – Fixed Base Operator – This is like a gas station for aircraft.  The facilities often include a passenger lobby and sometimes a snooze room and lounge for pilots.  Every now and then, you’ll get lucky and find cookies!

Apron or Ramp – This is the area where aircraft are parked around terminal buildings or FBOs.

Taxiway – These are the areas where aircraft “drive” on the ground to get to the runways or to wait in line to take off.

Runway – This is the area where aircraft actively take off and land.

FARs – Federal Air Regulations – these are the rules established and enforced by the FAA to govern the operating practices of air carriers.  Violations of the FARs may result in fines, imprisonment or loss of of operating certificate.  To paraphrase Tommy Lee Jones’s Agent Kay in Men in Black, “We at the (FAA) do not have a sense of humor we’re aware of.”  Regulations are taken very seriously.

Duty Day – This is the amount of time a crew is allowed to be on duty and it varies, depending on what part of the Federal Air Regulations the flight is operated under and how many crew members are on the flight deck.

Flight time – This is the amount of time calculated from when the wheels leave the ground (off time) until they touch down again (on time).

Block time – This is the amount of time calculated from when the brakes unlock and the aircraft begins to roll (out time) until the brakes are locked again and the aircraft is chocked (in time).

Chocks – those blocks of wood or rubber that are place in front of and behind aircraft tires to keep the aircraft from moving.  For the longest time I thought people were saying “chaulks.”  Much embarrassment followed when I figured out my mistake.

Prop wash or jet blast – the air that moves behind the prop or jet.  The prop wash blast from small aircraft kick up large amounts of sand and debris that can be uncomfortable to unprotected skin.  The jet blast from large airliners can actually blow over pick up trucks.

Air carrier – an entity certificated by the FAA to transport passengers or cargo for hire.  This may be a scheduled airline or it may be a freight company or a charter operator.

Broker – an entity who engages the services of a carrier on behalf of a client.  The broker neither owns nor operates any aircraft of their own.  This may be a travel agent, a freight or charter broker.

FOD – can refer to either Foreign Object Debris or Foreign Object Damage.  For instance, a plastic grocery bag blowing across the ramp at Lexington was Foreign Object Debris until it was injested into a Delta Air Lines engine when it became Foreign Object Damage, a cancelled flight, a huge headache and an enormous repair bill. 

While not an exhaustive list by any stretch of the imagination, these terms, as well as some found in articles published on July 27, 28 and 29, should put you well on your way to speaking BizAvian like a pro.

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