Mesinger Pulse – The Aviation Business Pendulum
Many global economic factors have shifted the business aircraft activity primarily back to North America. I have been talking and writing for the last year about these Global economic shifts of the emerging markets. The lower price of oil, the sanctions placed on Russia for their incursion into Ukraine, anti-corruption laws in China and economic stagnation in Europe.
Why is North America so strong? A myriad of factors including business growth, increased confidence in the economy and a basic return to profitability in many business segments. I do not mean to paint too rosy of a picture. Not all companies are enjoying this return to profitability and many are shifting their need for long range travel or working to keep costs down. As well, energy producing companies and the ancillary companies that supply goods and services to the oil producing countries and oil producing companies are struggling and may take years to recover. While we wait for recovery in other parts of the world, we in North America, have to work harder than ever to keep the transaction level strong here. Upholding the confidence of the market place is something we as aircraft sales professionals and for that matter every facet and segment of aviation industry providers has a responsibility to participate in a positive way. If we all do our part to be a force of strength our segment of the market will stay strong and give the leg up the industry needs to keep growth in our sights at home and around the world.
As I talk to clients and financial minds I do hear that there could be a downturn in our North American economy coming. They can point to many obvious and less obvious signals from the financial sector of our country.
So, what if our economy slows? The overall effect of that on our North America sales surge will be greatly determined by the timing of the recovery in other parts of the world. If the emerging markets have not gained speed when and if a downturn occurs, then inventory levels could continue to rise even higher, with corresponding reductions in transactions in the North American sector. Might it be fair to say that what is probably prudent to always consider is that a global industry may be hit from many sides at many times and a complete directional shift by all participants at the same time is unlikely.
But, what if economic indicators from the United States continue the positive trends exhibited in higher than expected job growth and wage growth and your business could now benefit from the use of a business aircraft. Don’t delay getting in to the markets, with the right expectations of residual value, the cost of ownership and the tremendous impact an aircraft could have to your success, whether buying new or pre-owned. Legacy aircraft can represent tremendous values with foundations and upgrades capable of taking you in to the future. New aircraft have technology never before seen and can take you farther and faster than ever before. What if you stepped up and made a positive difference to your business’ bottom line and personal well-being?
Let’s face it, business aviation will not go away. The need and desire are firmly planted in our being. There will be markets and there will be buyers and sellers. One aspect of our industry growth that has been so smart has been the corresponding advent and growth of the important industry advocate associations, NBAA, EBAA, AsBAA, LABAA, MEBAA and on and on. Not to mention the powerful work of the regional and local associations. These groups both in North America and all over the world have sought to strengthen the awareness of the benefits of business aviation and build upon global regulatory work to open airspace and keep the political focus in perspective regardless of the sectors current economic woes. We are so lucky as an industry to have these powerful alliances.
I will be speaking at the NBAA Regional Forum in White Plains on September 15, 2016. My speech time is at 10:30 am and will focus on this exact topic. In fact, I am excited to create a presentation that will include input from everyone in the audience. Not just questions at the end but actually building on the segment strengths of the audience. So if you are planning to attend the event, please come so your industry segment can be included in this discussion. I assure an invigorating and meaningful presentation that will connect the dots of our industry.
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