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The Week Of:
October18,1999

NBAA Wrap Up

Outside of the BBJ 2 derivative from Boeing, there were no new product announcements to speak of at this year's National Business Aviation Association meeting in Atlanta. But the key players - from the manufacturers to the supplier chain - were out in force at the Georgia World Congress Center.

The 1999 AM&C drew a total of 29,960 Attendees, 963 Exhibitors and a record 4,221 10'x10' booth spaces. Symbolic of the robust business aviation market, the show has grown in size at such a rate that only a handful of US convention centers can now accommodate the display area needed by the convention. The 2000 event will be held in New Orleans.

While there were no major order announcements or product launches, the industry used the year's largest gathering of its members to promote their various products - from new business jets to enhanced avionics systems - in an increasingly competitive environment.

Manufacturers like Cessna and Bombardier briefed the press with updates of their new bizjet launches from last year's show. Raytheon debuted its new Premier I leading a strong showing by the manufacturer at NBAA. At the heavier end of the bizjet market, Airbus and Boeing now reserve orderbook updates for the NBAA show.

Other manufacturers, like Gulfstream, took the opportunity to promote new technologies. Their Enhanced Vision System was on display and the subject of an in-depth press briefing. The $500,000 system is designed to help operators land in poor visibility conditions. Gulfstream predicts the system will revolutionize aircraft avionics.

Some of the show's highlights were found at the static display at nearby Peachtree-DeKalb Airport. The first BBJ, flown in by new owner Michael Chowdry, was a popular attraction as were traditional crowd pleasers the Falcon 50, Learjet 60 and Hawker 800XP. Popular mock-ups of developing aircraft included the Fairchild Envoy 7, the Citation Sovereign, Bombardier Continental and the Raytheon Hawker Horizon.

It is these new and derivative aircraft models entering service that will be driving the market growth of business aviation, according to a survey conducted by AlliedSignal Aerospace. Overall, there will continue to be strong demand for new business aircraft, with deliveries of 6,800 units, valued at nearly $89 billion, for the period between 2000-2010.

Aircraft backlogs continue to be at record high levels established last year. First-half 1999 deliveries of turbofan aircraft rose 27% over first-half 1998 levels. Dollar value of those deliveries increased by more than 40%

Business aircraft operators are expected to take delivery of around 605 new business aircraft in 1999, up from 510 a year ago, and 680 in 2000.

Confidence in the strength of the US economy, the continuous development and introduction of new jet models across the user spectrum, and the improved business conditions in Europe and Latin America are the most important factors driving this market, the survey revealed.

The continued expansion of fractional ownership, and its ability to bring new customers to business aviation, will also stimulate customer demand. More than 200 new aircraft orders and options have been placed this year, and the majority of fractional owners have never owned an aircraft.

The survey noted that participation in fractional ownership plans by traditional corporate operators remains limited. Traditional flight departments are starting to use fractional interests to supplement their existing service, but levels remain too low to indicate any significant shift in aircraft purchasing patterns.

The fractional issue was addressed by NBAA president Jack Olcott during remarks at the show. He emphasized that NBAA members felt strongly that fractional ownership should be "surgically removed" from Part 91 regulations and moved to Part 135. Furthermore, they want no new regulations for traditional flight departments.

FAA Administrator Jane Garvey told NBAA members that the organization's main concern is safety. This week, Garvey will be selecting members of an Aviation Rulemaking Committee to address the regulation of fractional ownership. She expects broad participation from industry members and a very short timeframe before the rules come into effect. The ARC will serve mainly as a forum for community input, but is expected to conclude its deliberations by December 31.

"NBAA is concerned about where a regulatory solution might lead," said Olcott. "Clearly, our members do not want to lose the ability to interchange, timeshare, co- or joint-own, or to manage aircraft under Part 91.501."

Voluntary industry safety guidelines were developed jointly by NBAA, GAMA and NATA and were overwhelmingly supported by NBAA members, who want to see these guidelines put into place immediately as the ARC reviews the fractional issue.

Unlike last year's show, there were no major fractional ownership announcements at NBAA. Executive Jets did announce that 12 Falcon 2000s were acquired for its NetJets Middle East fractional ownership program - 10 purchased and two leased. The Falcon 2000s were purchased by National Air Services of Jeddah, Saudi Arabia.

Hockey great Wayne Gretzky made an appearance while ordering a quarter share of a Raytheon Travel Air Hawker 800XP.



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