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Old 10th Jan 2009, 18:51
  #71 (permalink)  
gordon field
 
Join Date: Jan 2004
Location: UK
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Chrispler, a great and very comprehensive reply.

I entirely agree with you on most points particularly on OEMs and EBACE, they live in a fantasy world! The OEMs are just order takers and the salesmen get 50% of their commission when they have 'sold' an aircraft. The management count the aircraft as 'sold' when in fact they have received an 'order' for an aircraft but never really qualify the buyer at the outset and on a regular basis as to whether or not they have the ability to purchase the aircraft. Now they are stuck with inventory.

There are many Dealers, brokers and individuals that have placed forward orders for jets and turboprops and when asked to complete payment a large number will 'walk away' from the deal, lose their deposits and just disappear.

If you have cash now you can get a substantial discount and very early delivery on most light jets. If you want one with a few hours then there are yards of them laid up and not flying. All prices are 'make offer.'

As for the the charter companies co-operating I hope that there will be some rationisation among the more mature members but historically many leave it until too late. The others will probably default on fuel, airport charges, rent or finance payment and cease trading.

There is going to be a 'Big Chill' with lack of customers and lack of funding as many of the finance deals are no longer available due to lack of profits to prime the pump.

The growth with new users of the light biz jet were typically either ex owners who flew less than 100 hr pa (not cost effective) or often spent upwards of €50,000+ on annual travel. After 9/11 with the delays on scheduled flights many were tempted by personal jet travel.

It made sense whilst their companies were making 'profit' as most travel could be offset against company profits. A no brainer, rather than give 40% to the taxman why not fly to your villa in Spain or visit some 'clients' in an exotic location. Now the 'profits' have disappeared and a large number of the users will not renew their agreements.

Watch this space, the 'good guys' that have not overtraded or have already started to downsize will probably survive, we shall see.
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