General Aviation Manufacturing is in the Tank

• July
• 7

7:21 am Aircrafts

Change is a constant, Outsourcing Jobs, Capital flows, Emerging Markets are a given and this includes the Aviation Manufacturing Sector as we watch the current Migration pick up speed.

It appears that the technological advantage that we have here in the United States is no longer going to sustain us without further advances. Previously our work in aerodynamics (during and after WWII), our industrial capacity and our ongoing capitalization of the aerospace industry was enough to keep us ahead of the game. Currently in the US we see job losses in the aerospace mount in cities like Everett, WA and Wichita, KS. We see other areas trying to carve out a niche in the aviation manufacturing market cities like Albuquerque, NM and Centennial, CO. Yet in reality there are few niches, which do not have many competitors. One new market the mini-Business Jet, seems to be a potential as many companies are building these under 1 million dollar jets. Even so we are seeing the small business jet opening market as a long term positive in the private jet market, but a short-term problem for the small single engine turbo prop and piston markets of Beechcraft, Cessna and others. Long Term will be good because these are considered starter jets attracting new buyers to the market, however short term they will pull buyers away from the higher priced turbo cabin class singles of 4-8 seats. They may also pull buyers away from popular models such as the Beechcraft Bonanza, Cessna 210, Piper Malibu, Saratoga, etc. We will also see problems in this market as insurance carriers increase prices as less experienced pilots and single pilot mini-business jets experience a higher percentage of will occur. In fact such accidents are already causing friction in the corporate jet insurance costs, showing that certain companies are separating out the categories to keep the mini-business jets in their own realm and pricing points.