Corporate jet makers feel squeeze in US

[Robbien]

Source: The Australian

RIDICULED by politicians, attacked by the media and reeling from the economic slowdown, US corporate jet owners are doing it tough.

Attacks have been particularly savage since three Detroit executives used private jets to go to Washington last year to beg for a taxpayer-backed $US25billion ($39billion) bailout. The car makers' clanger sparked a wave of outrage and many companies reacted by cancelling orders or dumping corporate jets on a market that was already oversupplied because of the economic downturn.

The result, say US aircraft brokers, is that resale values have slumped by 30 to 40 per cent.

"A year ago, there would be 30 people looking for one plane," corporate jet broker Jay Mesinger recently told the New York Times. "Today there are 30 planes looking for one buyer."

A 2003 Gulfstream V that would have fetched up to $US44million in the US during the boom is now lucky to fetch $US25million. A similar-vintage Bombardier Global Express XRS that cost $US48million during the boom can now be picked up for about $US30million. In some cases aircraft are advertised on websites marked simply "make an offer".

Read more: http://www.theaustralian.news.com.au/business/story/0,28124,25123409-23349,00.html

[RUMMYisFROSTED]

1. Not so happy with the "free" market anymore?

Typical.

[geckosfeet]

2. Gee. That's a shame. Oh look - my 401k and home value are down 30-40%! What a coincidence.

[Shipwack]

3. Before everyone gets their cup of schadenfreude, there's a flip side....

Sales of new business jets are down. My employer supplies components to Bombardier, among others. Because Bombardier is having fewer sales, they are ordering fewer parts. Fewer parts ordered means less work for us. Less work for us means layoffs. In our case, we just had our second round of layoffs. This will hopefully be the last set, but hings are still looking grim. There's already a wage freeze in place, and there is talk of further measures to be taken... Maybe idling the plant for 2 - 4 weeks, or reducing hours across the board.

Yeah, it's fun to talk about the execs that will have to fly commercial with the "little people", but everyone of those corporate jets helped to provide a job for hundreds (f not thousands) of Americans.

[madmom]

5. Same scenerio as with the big 3, the workers are the ones taking the brunt.

[moundsview]

7. The city of WICHITA KS is hurting

United Way offers relief for laid-off aircraft workers

KSNW-TV
updated 1:45 p.m. MT, Fri., Feb. 27, 2009
WICHITA, Kansas - Around 800 Cessna employees learned Thursday they would be among the 4,000 Wichita workers at the plant hitting the unemployment lines. Over 8,000 aviation workers have been laid off in the last few months, but some help is on the way.

As more and more workers get lay off notices, compliments of the recent nose dive in the aircraft industry, a local charity is turning to the public to help them. The United Way says it's starting a fund for laid-off workers to help them pay their bills and make ends meet until they can find new jobs.

"We're asking the community to come forward and offer us an extra special boost as we can help the other members of the community who've lost their jobs," said Patrick Hanrahan of the United Way of the Plains.

http://www.msnbc.msn.com/id/29417556/

[geckosfeet]

9. Yeah. And my 401k and home value helped as well. So what?

Take that kind of value out of the economy and you have real economic slowdown with hundreds of thousands of jobs being lost across every sector.

Cars sales are down. Home sales are down. Electronics and home improvement sales are down.

Why should we feel any special empathy towards luxury business jet manufacturers.

[bdab1973]

28. Many business jets are not "luxury"...

I flew in the biz jet world for a while, and most of the jets I saw were not luxurious. A few were outfitted with wet bars, leather captains chairs and the like, but most are equipped more like a mini-airliner, maximizing seating on the airplane so that more people can fit on it. Granted, the seats are more comfy than airliner seats, but it's not as opulent as people think. Biz jets are used to maximize business travel and efficiency 90% of the time. Sure, you can find some companies that use their jets for other purposes, but most use their aircraft to further their business interests (which helps everyone at that business, not just the execs).

[rfranklin]

13. And there are no other parts that your company could make?

It seems to me that your management could find some other markets to compete in.

[Shipwack]

17. We already are...

Rockwell Collins has a different few irons in the fire, but we are primarily an aviation electronics company. It is als oa largish comapny, so we can't magically start creating new product lines on a moments notice.

Small aviation sales are down. The new jumbo jets that we supply are down also. The thing that is helping us right now are our government contracts, but it looks like even the military aviation contracts (such as the F-22) are being cut back also.

[bdab1973]

29. Easier said than done...

Most companies, like the guy's employer above, already have diversified markets. But even if they don't, it's not simply a matter of "oh, gee, maybe we should just make these widgets instead...Bob, start the production line up of Widget X tomorrow".

[llmart]

24. On the other hand......

if they're forced to take commercial planes then the demand for them will increase:)

[FarCenter]

4. It's time to get the politicians and military brass off the fleet of Air Force jets

The Air force maintains a fleet of C-xx jets that are essentially the same as corporate jets. These are placed at the disposal of Congresscritters, military brass and high-ranking members of the executive branch.

They should all fly commercial.

[bdab1973]

30. Many of them already do fly commercial...

Those jets aren't just used for everyday transportation. They are often used to transport government officials to destinations that either don't have airline service, or transport official parties that would be too large to book on a single flight (given the security it would entail) and a host of other reasons. Much of the flights are considered "opportune" flights, in other words, we're letting them use the jets because the aircraft aren't needed for higher priority missions. When I flew C-21s, we had three basic categories of missions...combat support, mission essential and "routine". One trumped the other. I'll just say that in certain situations, trying to get somebody from point A to point B on an airliner just won't work. That's why the jets exist, not simply to be a "perk". They have an actual mission and purpose.

[NealPetersen]

6. Fixing airlines

Maybe if these guys fly commercial and get stuck in long lines, TSA searches, miss flights, crap food if they can get any, lost bags, stuck for hours on flights that cannot get to gates, they will talk to their buddies on the airline boards to fix the airline industry.

[Synicus Maximus]

8. Remember before you get to happy about a downturn in corporate jet

sale, that translates into less jobs and hours, for the workers that build the jets and for the suppliers of parts. Remember
the luxury tax they put on yachts a number of years ago? It sounded good until they realized it put thousands of people in the yacht business out of work.

[geckosfeet]

10. Right. Yachts and jets for everyone. You are really tugging at my heart strings Synicus.

[hack89]

11. No - manufacturing jobs for everyone

does that bother you?

[Catch22Dem]

15. You're being a dick for no reason

I work in the aviation industry. This is news that affects me. Why are you refusing to acknowledge that the drop in manufacturing demand causes job losses for people like me and the others in this thread? If you have no sympathy or empathy, perhaps you could find another thread, because you're adding no value whatsoever to this one.

[geckosfeet]

19. Hey - don't be calling people names. I watched people in my company get layed off too.

I am just saying that certain industries - including mine cater to a higher end customer. When the economy gets hit we get hit harder, but when the economy is rolling its the gravy train. Your not the only ones hurting so get lost with your violins.

[Dreamer Tatum]

21. So now YOU want special consideration?

Boo friggidy hoo - you get hit harder.

You were asked to not laugh because the market for luxury jets is down. You obfuscate, therefore you fail.

[bdab1973]

27. The corporate jet world employs way more people and does more good

than the yacht business. The two are not even in the same category. Biz jets are used as transportation tools among all businesses, large and small, and afford them efficient and flexible transportation that the airlines simply cannot provide with their fixed schedules and limited destinations. The yacht industry is almost exclusively a pleasure product, as very few yachts are used for business productivity. The business jet industry employs more people by many orders of magnitude, and contributes greatly to our nation's production and overall aerospace industry.

[Sen. Walter Sobchak]

12. Private jets can save money, just not when there used as executive toys

We charter a Challenger when we have a bunch of people going to the same place at the same time, it saves time since a bunch of people aren't hanging around in airports a day in each direction and when enough people are going it is less expensive than flying everyone commercially.

Some people don't like it though because they miss out on their frequent flyer miles and the plane we use has the same interior as a CRJ.

[ConcernedCanuk]

14. Daaaaayuuuum - I'm gonna lose sleep over these poor jet owners loss in equity

.
.
.

try living on $7,000 a year and keeping one vehicle on the road

and somewhere in this thread - says it saves the company MONEY??

gimme a break

how many commercial flights, train rides, bus rides, rental cars/whatever can you get for $30 MILLION???

I suspect quite a few

[Catch22Dem]

16. It' not about the owners

It's about the blue collar workers in the aviation industry. Manufacturing, maintenance, training, etc...

[Synicus Maximus]

18. Is it just me or does it seem that some people

don't care how much a down turn hurts the average worker as long as it hurts or inconvenience's the rich a bit.

[Catch22Dem]

20. Oh, it;s not just you

I haven't been this pissed off in a thread since the primaries. HAHA. ;)

[Dreamer Tatum]

22. Makes you wonder how many DUers are just PRAYING that their jobs get cut

because some rich guy somewhere enjoys his product or service.

It's ALLLLLLLLLL connected, folks.

And you NEED IT TO BE CONNECTED VERY DESPERATELY if you point to your 401K balance in anger.

[Dappleganger]

23. Everyone is hurting...

join the fucking club.

[BrightKnight]

25. MADE IN USA!!, 1.2M great jobs, Exports = 40% of sales, lost tax revenue

We make the best general aviation jets in the world in the USA. We had an export rate of about 40% of total sales. It was a very bright spot in our economy. Tens of thousands of very good jobs have been lost in the past 3 months.

[bdab1973]

26. Most jets are NOT used as "toys" for the rich...they are transportation tools

used by companies that are always on the go. Most of the passengers tend to be middle-management, and the jets get them to many small-town USA production facilities that aren't near major airports served by the airlines. Overall business jets HELP business and are a "force multiplier" and generating business and production. If they were really that wasteful, they would only be operated by the largest companies, but business jets are used by many small and middle-sized companies as well because they are so useful at getting people where they need to go quickly and efficiently.

Finally, this industry is an industry the US has long been a leader, and it's ashame that politicians are more willing to ridicule the industry for some cheap political attacks.