The biggest business aviation news from 2013
Wheels Up, Beechcraft, Pilatus and FlexJet were the main headline-makers as we take a look back at the biggest news stories from the private jet industry in 2013.
As is usually the case with business aviation, most of the year’s biggest news stories were generating from the annual trade shows, with a number of new aircraft launches. But in 2013, the federal shutdown in the US and the launch of an ambitious new company named Wheels Up gave the industry a lot more to talk about.
There was also plenty of acquisitions and mergers, substantial aircraft orders (see: Beechcraft, FlexJet, VistaJet, Wheels Up) and more doom and gloom as the annual total of new business jet deliveries continued its downward trend, which started back in 2008.
Below, we take a look at the seven biggest business aviation news stories from 2013 in chronological order.
Beechcraft emerges from bankruptcy and then – at the end of the year – Textron agrees to buy it for $1.4 billion
We are in a much stronger position now and I am focused on getting the good news to our staff, our customers and prospects.
— Bill Boisture, CEO of Beechcraft
After entering into Chapter 11 protection in in May 2012, Hawker Beechcraft eventually left bankruptcy as a standalone company named Beechcraft Corporation – following the collapse of a takeover from Beijing-based Superior Aviation – in February 2013.
Beechcraft announced it would focus solely on selling Beechcraft, military and trainer aircraft, while continuing to support the existing owners of both Hawker and Beechcraft aircraft.
On December 26 – when most of its employees are off on vacation for Christmas – Textron announces that it will be buying Beechcraft for $1.4 billion. The sale will not close until mid-2014 and it is not clear how it will be integrated with Cessna.
Pilatus launches its first private jet
Over ten years ago, we started asking our PC-12 customers what they would like to see in the next Pilatus aircraft. The answers were always the same: further and faster.
— Oscar J. Schwenk, chairman of the board of directors of Pilatus
Pilatus, a Swiss-based manufacturer of fixed-wing aircraft since 1939, entered the private market with the launch of the Pilatus PC-24 twin-engine light jet at EBACE 2013.
Due to be delivered in 2017, the aircraft will cost $8.9 million and will compete in a market that is already heaving – if not saturated – with the likes of the Phenom 300s and Citation CJ4s.
Wheels Up arrives and plans to revolutionise private aviation
Wheels Up will be private aviation’s number one brand in the next five to six years; we want to be the Google or the Twitter or the Facebook of the space.
— Kenny Dichter, founder and CEO of Wheels Up
Wheels Up launched its private aviation flight club in August 2013 with an order for up to 105 brand new King Air 350i turboprops from a newly-revitalised Beechcraft. The order looked a bold move at first, but it merely hinted at the extent of the company’s ambition, having since placed a substantial aircraft order with Cessna and declaring plans to add an enormous range of business aircraft (including large-cabin jets and helicopters) to its fleet.
With an annual membership starting at $15,750, the company is forecasting membership revenues of over $26 million from the 1,500 members it expects to sign-up by 2015.
Bombardier sells Flexjet to Directional Aviation Capital
Our vision for Flexjet is of a luxury brand with a young fleet, the latest technology, hand-crafted interiors and an unmatched owner experience.
— Kenn Ricci, head of Directional Aviation Capital
Bombardier ended its 18 year relationship with fractional jet provider Flexjet, by selling the company to Flexjet, LLC, a newly-created company funded by a group led by Directional Aviation Capital, a US private investment firm owned by Kenn Ricci.
The final sale was thought to be worth around $195 million, which includes the assumption of an estimated $70 million of customer advances by Directional Aviation.
VistaJet plans to move into the US
I would distance myself as far as I can from the word ‘gamble.’ We have teamed up with the two best businesses in this industry and we have made some very, very calculated decisions.
Thomas Flohr, chairman and CEO of VistaJet
In September, the prolific business jet buyer announced plans to base 12 brand new Bombardier Global private jets in the US from 2014. The Swiss company announced that Jet Aviation would operate and manage the aircraft, with Wheels Up acting as a sales agent.
The new aircraft are part of VistaJet’s record-breaking $3.1 billion order for 56 Global jets – plus options – placed in November 2012 and Bombardier is expected to deliver one aircraft per month starting from January 2014.
The US federal shutdown slows down aircraft transactions
I’ve heard from a number of dealers and brokers from around the country that are calling and saying: ‘We have no revenue coming in the door unless and until that registry in Oklahoma is reopened.’
— Ed Bolen, president and CEO of the NBAA
Having deemed the FAA Aircraft Registry, based in Oklahoma City, as “non-essential,” the effect of building’s shut down was that prospective buyers were unable to register their aircraft, meaning that aircraft sales ground to a complete standstill.
With more than 10,000 US aircraft registrations expiring each month, many owners also feared that their aircraft would be grounded.
Business jet buyers fail to start spending again
There’s no question, we’ve been in a very, very deep down cycle… But the cycle will come back around and you’ve got to make sure that you’re positioned to capitalise on that.
— Scott Donnelly, chairman of Textron (owner of Cessna)
Corporate Jet Investor predicted that a total of 653 new business jets would be delivered in 2013, down from 672 in 2012. Although we won’t know the exact figures for the year until February, by the end of the third quarter, 421 business jets had been delivered, reflecting a 2.1 per cent decline, when compared with the first three quarters of the previous year.
Cessna’s announcement that it would slow down production of it light jet models meant that deliveries would certainly be down, but manufacturer managed just 86 units in the first three quarter, down by 52 per cent.
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