From the editors of Aviation International News

This issue sponsored by Gulfstream, Jet Professionals, and Cutter Aviation.
January 29, 2009

Russian Investors Seek Partners or Buyers for AAI
Russian investment firm Industrial Investors today announced it is seeking to sell all or a portion of AAI Acquisition, the company formed to buy the assets of bankrupt very light jet developer Adam Aircraft Industries last April. According to a company spokesman, “All options are on the table, and our goal is to see [the A700 very light jet] succeed.” He added that Industrial Investors would prefer to find a partner to develop the A700, but it would also sell AAI outright if needed. The Russian firm has set a deadline for “initial requests” of February 28. In November, AAI downsized from about 100 to 35 employees and further slowed development of the A700. A month later it said it revised its business plan to offer engineering and composite manufacturing services to other companies. The spokesman said this plan is going well, with two OEMs already selecting AAI for consulting work, while more talks are continuing with other companies.

NBAA Folds LBA Show into Its Annual Convention
Citing the state of the economy, NBAA yesterday announced the cancellation of the inaugural Light Business Airplane Conference (LBA2009) scheduled to be held in San Diego in March. The move comes just one month after NBAA “recalibrated” the show from a three-day schedule to two–March 13 and 14. However, the LBA event will live on in some form, as programming and other elements from the anticipated event will be incorporated into the NBAA Convention in Orlando, Fla., from October 20 to 22. “In this economic climate, it is difficult to launch an event that our members and exhibitors expect from NBAA. We all know that our industry is finding it necessary to limit travel and marketing expenses, so we are going to combine all of the elements we’d planned for LBA into the convention,” said NBAA president and CEO Ed Bolen. “By incorporating the conference into the convention, the entrepreneurs and pilots for whom LBA was specifically designed will now be able to participate in the full two days of education sessions–including the Cessna Single-pilot Safety Standdown–and still have an additional day to see all of the general aviation products and services” at the NBAA Convention.

Grob Aerospace Deal Paves Way for SPn Resurrection
An agreement for German investors to take over the trainer aircraft activities of the insolvent Grob Aerospace group might have cleared the way for a separate deal to resurrect Grob’s SPn light business jet program. Grob’s insolvency administrator, Dr. Michael Jaffe, yesterday announced a deal under which the Fortius Mittelstandskapital AG financial group backed by H3 Aerospace will assume control of the trainer activities at Grob’s Tussenhausen-Mattsies site in southern Germany, starting on Sunday. The financial terms of this agreement have not been disclosed. Following a creditors meeting in Munich, Jaffe also stated that the SPn program is expected to be taken over by one of Grob’s main creditors backed by some other undisclosed investors. He indicated that SPn development and production work might stay at Tussenhausen-Mattsies and that the separate deal to secure the future of aircraft manufacturing at this site has been a prerequisite for proceeding with any plans to save the SPn. In the first instance, the resumption of training aircraft manufacturing and support will secure about 100 jobs at the former Grob plant. According to Jaffe, Fortius and H3 are committed to expanding the company and increasing employment.

GD Upbeat about Gulfstream, Jet Aviation
Bucking the current economic tide, Gulfstream Aerospace and Jet Aviation parent company General Dynamics yesterday posted strong revenues and profits for 2008, thanks in no small part to its aerospace division. Overall the company posted $29.3 billion in revenues and $2.48 billion in profits last year, up from $27.2 billion and $2.1 billion in the respective previous periods. In the fourth quarter, the aerospace division recorded $1.5 billion in sales and $264 million in profits. In all of last year, Gulfstream and newly acquired Jet Aviation accounted for $5.5 billion in sales and more than $1 billion in profits. According to General Dynamics chairman and CEO Nicholas Chabraja, sales of large-cabin Gulfstreams are holding strong despite the economy, though sales of the midsize G150 and G200 “dramatically softened” since the middle of last year. He expects these trends to continue throughout this year. While Gulfstream’s backlog has slipped slightly year-over-year, Chabraja said that order intake is “stronger than expected,” fully due to increased orders for large-cabin jets. Gulfstream last year delivered 156 green aircraft (87 large cabin, 69 midsize), compared with 138 (79 large, 59 midsize) in 2007. This year Gulfstream expects to deliver 94 large-cabin jets (seven more than last year), but will more than halve midsize shipments to “about 30.” Chabraja said Gulfstream’s 2.5-year backlog for large-cabin jets should allow the division to “manage through” the tough economy.

Cessna Deliveries to Drop 20 Percent This Year
Textron, parent company of Cessna Aircraft and Bell Helicopter, released its fourth-quarter and full-year financial results this morning amid continued concerns of a weakening economy. In a conference call with reporters, chairman and CEO Lewis Campbell underscored the seriousness of the situation. “We believe 2009 is setting up to be the most challenging year ever for most manufacturing companies.” While Cessna delivered 131 jets in the fourth quarter of 2008–bringing the full-year totals to a record 467 jets–the company today announced another 2,000 job cuts and lowered its 2009 delivery estimates to 375 aircraft due to the economy’s having what Campbell described as “an especially egregious impact on the business jet industry.” Cessna reported gross orders for only 30 new jets in the last quarter of 2008, along with 23 cancellations of previously ordered jets and “an unprecedented number of deferrals.” The news for Bell was somewhat better, with the company predicting delivery of 180 commercial helicopters this year, a conservative increase from last year’s tally of 167. Both divisions posted increases in their backlogs over the year, with Cessna’s rising $1.9 billion to $14.5 billion, and Bell’s increasing by $2.4 billion to a total backlog of $6.2 billion.

NBAA's Letter to White House Defends Bizav
In the wake of political influence that forced Citibank on Tuesday to ditch plans to take delivery this year of a $42 million Dassault Falcon 7X it ordered in 2005, NBAA president and CEO Ed Bolen penned a letter to President Obama defending companies’ use of business jets. Citibank, which accepted $45 billion in government loans late last year to avoid collapse, has been vilified by politicians and the media this week over the jet purchase, which was made when the bank was enjoying better times. “While we support the need for wise stewardship of taxpayer dollars, we are deeply concerned about a pattern that seems to be emerging in which policymakers are discouraging and disparaging the use of general aviation for business purposes,” Bolen wrote to Obama. “While the actions may be directed at a certain individual or a certain company, the reality is that a vital U.S. industry is being devastated by the economy, and some of the recent steps by policymakers are adding to the pain and job losses. This has to stop–policymakers need to understand that general aviation is about jobs…[which] are important to the people who perform them and to the companies they work for.” In the letter, Bolen also likened business jets to “an investment in good computer software,” both of which “boost employee efficiency and productivity.”

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Also Noted...

According to the FAA, about 1,000 general aviation aircraft are expected to fly into Tampa, Fla.-area airports this weekend for the Super Bowl. The agency issued a notice explaining the ATC changes for the event. In addition, the FAA will implement three separate TFRs around Raymond James Stadium on Super Bowl Sunday. Tampa International Airport’s Runway 9/27 will be closed for aircraft parking and air traffic controllers from Tampa Tower will staff airport FBOs to issue departure clearances to pilots on Sunday evening and Monday morning.

Despite the recession, XOJet yesterday reported strong year-over-year increases in revenue, flight hours and customers. Last year, the fractional/charter hybrid company said it experienced a 66-percent increase in revenue and 60-percent increase in flight hours over 2007. XOJet ended the year with more than 1,500 customers, up from 1,000 the previous year, and flew charter and guaranteed-availability customers to 52 countries.

During an investor call on Monday, manufacturing supplier Moog said its business jet segment showed a sales decline of 18 percent in the fourth quarter. The company attributed a large part of that drop to “the reduced level of shipments on the Hawker 4000.” While Hawker Beechcraft claims it will maintain its delivery schedule for the super-midsize jet, Moog has “already delivered more hardware than they were able to use. So our effort has slowed down.”

Telluride (Colo.) Regional Airport will be closed between April 7 and November 2 so the runway can be improved, airport officials announced this week. A $21 million FAA grant that was recently awarded will allow for Phase 2 of a runway improvement project to begin this spring. A recently completed $9.4 million initial phase reinforced and stabilized fill underneath the dip in the runway’s center. In the second phase, the runway will be replaced, reducing the grade of the dip, and crushable concrete overrun areas will be added.

Private aircraft charter broker Virgin Charter and travel services marketing company today announced a partnership that makes the former a charter air solution for the latter. As such, Virgin Charter will offer travel professionals a complete online solution to manage clients’ private jet charter needs. travel professionals will have a dedicated Virgin Charter toll-free number for 24/7 customer service by Virgin Charter Advisors.

Tom Appleton has left retirement to rejoin Piaggio America as president for a year until a replacement can be found, according to a Piaggio spokeswoman. Previous president and CEO Eric Hinson left Piaggio America this month to join FlightSafety International as executive vice president. Piaggio America is the West Palm Beach-based U.S. subsidiary of Piaggio Aero, the Italian manufacturer of the Avanti II turboprop twin.

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