Monday, December 21, 2009

Is Civil Aviation Still Profitable?

With the Eurofighter Typhoon selling like hotcakes during the 2009 Dubai Air Show, is the civilian side of the aviation industry still profitable?

By: Ringo Bones

Maybe it was Michael Keith, managing director of BAE Systems’ Middle East branch, pointing out that military aviation industry as recession proof due to their Eurofighter Typhoon selling like hotcakes during the 2009 Dubai Air Show has got me thinking whether the civil aviation industry is still profitable. After all, given the long delays of the rollout of the Airbus A380 Super Jumbo and the Boeing 787 Dreamliner, you could be forgiven for doubting the long-term profitability of civil aviation. But is the civil aviation business really that badly affected by the current global economic downturn?

The private jet / executive jet business has been negatively hit – both financially and ethically – not only by the global economic downturn. But also of the environmentally “unethical behavior” of the executives of America’s Big Four carmakers who used their private jets to fly to Washington, D.C. back in 2008 in order to ask a financial bailout from Capitol Hill. Thus hurting the image of the private jet / executive jet manufacturing business.

Graeme Deary, executive director of Net Jets has recently been resorted to find “creative” ways to make a profit in the executive jet manufacturing business. Like their company’s timeshare scheme of offering ½, ¼, 1/8, and even 1/16 ownership of their famed executive jets which some fortunate few top company executives can’t do without. Even their latest pay-as-you-go or pay-as-you-fly scheme has had them making their executive jets available to be used as a flying taxi or a jet limousine for rent at prom night just to keep their company afloat. Or maybe just to make it to next year’s Dubai Air Show.

While Andrew Hoy, executive director of Execujet Aviation had to pitch his latest offering to the civil aviation industry much harder during the 2009 Dubai Air Show. Execujet Aviation managed to make – though still in its “vapor ware” stage – a supersonic capable executive jet that costs only 10 to 15% more than its current subsonic contemporaries. Even though this upcoming executive jet could cross the Atlantic in half the time of most current subsonic executive jets, unless enough advance orders are made, a prototype could not ever be built soon due to lack of funds.

The present state of the civil aviation business – whether it is on mass transport wide-bodied jumbo jets or smaller privately owned executive jets – seems to be in the doldrums and some are even teetering on bankruptcy. Not only because of the current global economic downturn or the widespread “pessimism” of our post – 9 / 11 world, but also of growing environmental concerns. If you are growing tired over the media frenzy over excess carbon dioxide produced by air travel. Wait until you hear the media mull over excessive nitric oxide emissions of widespread civilian supersonic air travel busting a hole in our ozone layer.

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