All posts tagged 'aviation economy'

The Emissions Trading Scheme Debacle, i.e. “The Carbon Tax.”

Before I start with the meat and potatoes of this month’s article, I do want to publically state that I am not a believer in the ‘Sky is Falling’ point of view regarding ‘Global Warming.’ So before any reader starts to berate me for having a biased point of view, or acting like an ostrich by sticking my head firmly into the ground to avoid seeing what is going on around me, please allow me to at least explain why I take this stand of non-belief:

When I was attending my local Comprehensive Secondary Education High School back in Rural England in the nineteen seventies and eighties, I distinctly remember the world’s scientific community trying to whip up the public’s attention and concern regarding the then great fear that we were on the edge of a modern Ice-Age and all life on Earth was in mortal danger thanks due to ‘Global Cooling.’ Now today, thirty five years later, scientists are proclaiming that the planet is now in massive danger thanks to ‘Global Warming.’ Apart from saying “I wish that they would make their minds up” I do know that much of the data created by both Mr. Gore and his scientific cronies was either misinterpreted, misrepresented, and/or hyped beyond the value of what it can tell us (Please watch The Great Global Warning Swindle, that was produced for Channel Four in Britain in 2007, as well as exhaustive research and documentation that is available on the counter-view against Global Warming.) You know the phrase: “79% of all statistics are pulled out of someone’s rear-end.” I know that there are many indications of a change in nature, but obviously the Global Warming activists do not believe in the ability of the earth to manage its own environmental systems better than mankind will ever be able to.

Okay, with that said onto the main feature...

The European Commission, a cabinet government that consists of twenty seven bureaucrats who conduct their legislative assembly in Brussels, are an executive arm of the European Union (E.U.) The Commission has taken on the perceived issue of climate change as one of their top priorities. Their belief is that the production of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulphur hexafluoride and their release into the earth’s atmosphere by humanity is the principle cause of global warming due to a greenhouse effect. They have mandated that all E.U. member countries starting in 2013 must cut their carbon emissions by 30% of what they were measured to be in 1990, within the next eight years (year-end of 2020.) When that milestone is reached, further reduction shall be mandated.

This mandated reduction will be achieved by the E.U. by requiring their member states to require all greenhouse producers (i.e. all companies that operate in the E.U.) to measure, monitor and record their averaged historical production of carbon dioxide, and then dispense a wallet of Carbon Trading Credits to them all in an amount that is equal to 85% of their credit need, as well as selling credits to make up the 15% shortfall and also to non E.U. members who shall be emitting greenhouse gases within the borders of the E.U. These wallets all go into effect next year (2013.)

Even though most of the documents available at the Commissions website regarding the Emissions Trading Scheme, are peppered with the phrase ‘un-due burden’ as references to the many legal challenges against the scheme, the commission believes that ETS is as a simple, fair and cost effective measure against global warming, as well as recognizing that it is creating a brand new commodities market that is based entirely on the trade of unused ETS credits. The credits are loosely labelled by the E.U. as ‘financial instruments’ and frighteningly as far as I see it, they are viewing the trading of credits as a new creator of venture capital that will be injected into the economies of the E.U. member states, further shoring up the damage wreaked upon them by the Global Financial Crisis. Officially these credits are also called European Union Allowances or EUA’s. One credit (EUA) and shall have an opening price on January 1st, 2013 of €25 or approximately $33.50 at today’s rate of exchange.) 1 Credit = 1 Metric Tonne of Carbon Dioxide release.

Jet-A apparently, has 21.537 pounds of carbon dioxide locked up inside one U.S. gallon. This is released when it is burnt.

A typical current production, mid-size business jet is purported to emit 6.2 LBS of carbon dioxide per NM. For a flight from the Midwest U.S. to London or Paris, the total carbon dioxide emission shall equal 24,800 LBS (12.4 Short Tons or 11.272 Metric Tonnes.) At the rate of $33.50 per Metric Tonne, the Carbon Tax shall equal $377.62. It is predicted however, that due to speculating traders and government meddling, the cost per credit will go up by as much as 700 times the initial offered value, i.e. almost $24,000 per credit. Never say never regarding this not happening, because no-one ever expected a change in the Italian government that occurred recently, whereby the new Prime Minister and his cabinet are implementing a residency tax on all private aircraft per visit that can amount to almost $400,000 per visit for a Gulfstream sized aircraft as an example.

By reading the ETS legislation that is applicable to aviation, you will find that no aircraft is exempt if it produces more than 10 Metric Tonnes per annum. As you have seen, this allowance is pretty-much obliterated on the first flight across the pond from the U.S. to Europe.

The ETS legislation that targets the aviation industry reads as follows:

Aviation Flights which depart from or arrive in an aerodrome situated in the territory of a Member State to which the Treaty applies. This activity shall not include: (a) flights performed exclusively for the transport, on official mission, of a reigning Monarch and his immediate family, Heads of State, Heads of Government and Government Ministers, of a country other than a Member State, where this is substantiated by an appropriate status indicator in the flight plan; (b) military flights performed by military aircraft and customs and police flights; (c) flights related to search and rescue, fire-fighting flights, humanitarian flights and emergency medical service flights authorised by the appropriate competent authority; (d) any flights performed exclusively under visual flight rules as defined in Annex 2 to the Chicago Convention; (e) flights terminating at the aerodrome from which the aircraft has taken off and during which no intermediate landing has been made; (f) training flights performed exclusively for the purpose of obtaining a licence, or a rating in the case of cockpit flight crew where this is substantiated by an appropriate remark in the flight plan provided that the flight does not serve for the transport of passengers and/or cargo or for the positioning or ferrying of the aircraft; (g) flights performed exclusively for the purpose of scientific research or for the purpose of checking, testing or certifying aircraft or equipment whether airborne or ground-based; (h) flights performed by aircraft with a certified maximum take-off mass of less than 5700 kg; (i) flights performed in the framework of public service obligations imposed in accordance with Regulation (EEC) No 2408/92 on routes within outermost regions, as specified in Article 299(2) of the Treaty, or on routes where the capacity offered does not exceed 30000 seats per year; and (j) flights which, but for this point, would fall within this activity, performed by a commercial air transport operator operating either: fewer than 243 flights per period for three consecutive four-month periods, or flights with total annual emissions lower than 10000 tonnes per year. Flights performed exclusively for the transport, on official mission, of a reigning Monarch and his immediate family, Heads of State, Heads of Government and Government Ministers, of a Member State may not be excluded under this point."

Is there any way to avoid the Carbon Tax?

Our only hope is that the 26 or so countries that include the U.S.A., China, Russia and India, that all oppose this legislation that is being foisted upon all visitors to Europe, will manage to defeat it through trade embargos and other means. With as much financial strife that the Eurozone is feeling now especially with Greece, let’s not allow this Euro-Tax scheme to become cause for a military war.

So, what do you think about all of this? Do you think ETS/Carbon Tax is a good thing, or do you find it demonstrable like I do?

Cirrus reports growth despite uncertain economy

Cirrus reports growth despite uncertain economy

By Dan Namowitz of AOPA

Cirrus Aircraft reported increased production during the third quarter in an announcement that differentiated company performance from overall industry statistics showing a slowing rate of decline in aircraft deliveries

During the third quarter, Cirrus completed 68 new aircraft, seven more than during the third quarter of 2010, said Todd Simmons, vice president of sales and marketing. Although only 48 deliveries were reflected in the third-quarter industry report released by the General Aviation Manufacturers Association, "an additional 20 aircraft were completed in Duluth, Minn., and are currently in transit to the Civil Aviation Flight University of China (CAFUC) in Luoyang, China," Cirrus said in a news release.

Cirrus cited market-share statistics and strengthening revenue as highlights of the reporting period, pointing to a 37-percent share of the single-engine piston, tricycle-gear, certified aircraft sector versus 32 percent for its closest competitor (which according to GAMA figures appears to be Cessna), and a 77-percent share of the high-performance four-seat airplane market. Average revenue per aircraft increased 20 percent over the 2010 third quarter, Cirrus said.

Cirrus also noted nonfinancial milestones that occurred during the period.

The company delivered its tenth and final Limited Commemorative Edition SR22T, a model developed to recognize the anniversary of the first SR22 delivery in 2001. Another landmark event occurred at AOPA Aviation Summit in Hartford, Conn., in September, when Cirrus delivered its 5,000th SR-Series airplane—a production achievement the company heralded as "an astounding accomplishment in aviation" because it occurred in "just over a decade."

Simmons ventured a cautious outlook for the industry, but also optimistic, "especially when you add in the most generous tax incentives ever for U.S. customers."

"At the same time, we are still facing the challenge of a stubbornly slow recovery in the traditional North American and European general aviation markets, and currency fluctuations and economic uncertainty remain present in so many countries around the world," the company said.

On the research and development front, Cirrus reported steady progress on the Cirrus Vision SF50 personal jet program, noting that "exciting program announcements are just ahead."

March aircraft flight activity shows significant increase over the previous month.

ARGUS Releases March Business Aircraft Activity

 

 

Cincinnati, Ohio, April 13, 2011….ARGUS TRAQPak data is serial-number specific aircraft arrival and departure information on all IFR flights in the US (including Alaska and Hawaii).  The tables below reflect business aircraft activity data for March 1-31, 2011 vs. February 1-28, 2011 and March 1-31, 2011 vs. March 1-31, 2010 respectively.  Note: Part 135 charter certificate flight activity reflects flights of aircraft on Part 135 charter certificates irrespective of the mission type.

 

March flight activity shows significant increase over the previous month. TRAQPak data indicates March business aircraft activity was up 17.2% over February. Looking at operational categories, the Part 91 market segment saw the biggest month over month increase at 18.6%. The fractional segment came in second, up 17.0%, and the Part 135 market was positive as well at 15.0%. Reviewing aircraft categories, the turboprop market saw the biggest month over month increase, up 19.5%.  Small and mid-size cabin followed with increases of 18.2% and 15.2% respectively. The large cabin market also posted an increase at 12.7%.

 

 

 

Business Aircraft Activity

March 2011 vs. February 2011

Part 91

Part 135

Fractional

ALL

Turbo Prop

21.5%

17.0%

16.1%

19.5%

Small Cabin Jet

18.9%

17.4%

17.0%

18.2%

Mid-Size Cabin Jet

15.7%

11.5%

17.8%

15.2%

Large Cabin Jet

14.4%

8.3%

13.6%

12.7%

All Aircraft Combined

18.6%

15.0%

17.0%

17.2%

Source TRAQPak © 2011  ARGUS International, Inc.   +1 513.852.1010

 Comparing year over year results (March 2011 vs. March 2010), aircraft activity increased 4.7%.  The Part 91 and fractional markets both saw activity increase at 9.5% and 5.7% respectively. The Part 135 market was the only sector that saw a decline in activity, down 3.2% year over year. In reviewing aircraft category results, large cabin and mid-size jets were up 9.4% and 6.4%. The turboprop sector experienced an increase of 3.4%. Looking at individual market segments, Part 91 large cabin jets showed the largest gain with an increase of 12.1%.

 

 

Business Aircraft Activity

March 2011 vs. March 2010

Part 91

Part 135

Fractional

ALL

Turbo Prop

10.4%

-6.0%

6.0%

3.4%

Small Cabin Jet

10.0%

-7.0%

-5.8%

2.5%

Mid-Size Cabin Jet

5.4%

5.6%

8.3%

6.4%

Large Cabin Jet

12.1%

2.2%

11.1%

9.4%

All Aircraft Combined

9.5%

-3.2%

5.7%

4.7%

Source TRAQPak © 2011  ARGUS International, Inc.   +1 513.852.1010

 

 

 

 

 

TRAQPak Aircraft Categories

Turbo Prop

Single Engine Turboprop Aircraft and Multi-Engine Turboprop Aircraft

Small Cabin Jet

Very Light Jets (VLJ) and Light Jets (LJ)-Jet aircraft with a maximum takeoff weight of less than 20,000lbs.

Mid Size Cabin Jet

Mid-size Jets (MJ) and Super Mid-size Jets (SMJ) - Jet aircraft with maximum takeoff weight of over 20,000 to 41,000 lbs.

Large Cabin Jet

Large Jets, Ultra-Long Range and Heavy JetsJet aircraft with maximum takeoff weight of over 41,000 lbs. For weight over 41,000 lbs and Ultra-Long Range and Heavy Jets having an NBAA IFR Range above 6,000NM.

 

Notice of Disclaimer:  Readers are advised that this report is issued solely for informational purposes.  ARGUS also makes no promise and/or warranty to maintain and/or update the published information. Suspension of this service may occur at any time at the discretion of the Institution.  ARGUS shall not be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or any delay or interruptions in, the transmission thereof to the users.

 

About ARGUS

ARGUS International, Inc. (ARGUS) is the industry leader in providing specialized aviation services to companies that manufacture, finance, operate, maintain, and market commercial and business aircraft, as well providing products and services to end-user consumers worldwide. ARGUS is the worldwide leader in performing on-site safety audits for corporate flight departments, charter operators, and commercial airlines. Founded in 1995, key ARGUS services include Charter Evaluation & Qualification (CHEQ) and CHEQPoint, PRISM Safety Management Support systems and training, TRAQPak market intelligence data service, aircraft operating cost reports, market research, and aviation and travel consulting.

 

ARGUS is headquartered in Cincinnati, OH, with additional offices in Philadelphia, PA, Denver, CO, and Columbus, OH.  For more information, visit www.argus.aero

 

###

 

Media Contact:     Julie Stone                          912-898-8673

ARGUS Contact:  Kendra Christin                    513-852-1010

2011 Business Aviation Outlook

2011 Outlook

New Year’s Eve was an early night for me. I was fighting off a nasty cold and despite the intake of grape-related products, ran out of energy before 2011 said hello.  But as I didn’t sleep much either, I guess I was awake for the New Year. With some drugs in my blood, the cold’s effects are waning as I write this. If my outlook for 2011 is a bust, I will claim it is the after-effects of decongestants!

2010 was a year of what I’ll call a stagnant recovery. Economic signs were generally positive. The US stock markets finished 2010 with double digit gains versus 2009. NASADQ was the biggest gain up almost 17% over the year. However, rising corporate profits and stock indices have not resulted in job gains here in the US.

Business aviation is tied in with corporate profits, so that much bodes well for our industry in 2011. Aircraft sales are expected to be (relatively) strong for the last quarter of 2010 if the December activity of aviation tax and legal folks are any sign. Flight hours flown seems to be on the rise as well as charter activity. But again, new jobs and rehires are not showing strength just yet.

So here go my picks for 2011:

Business aviation activity will continue to show steady, but slow, growth. I think aircraft sales will slowly increase here in the US, be flat in most of Europe, and show some strong growth in the Middle East and Asia. As with the past several years, I think more than half of the new aircraft sales will be outside the US.  So for US-based aircraft brokers with International experience, this should be a better year for you.

More...

Change of guard in Washington, D.C. should be good for aviation in the U.S.

The elections should be good not only for business aviation, but also for the overall aviation industry in the United States. Less government meddling and more free-market forces will ultimately lead to a more efficient system.

 

A significant change has taken place with the defeat of Rep. James Oberstar, D-Minnesota, who was the powerful chair of the House Transportation Committee.

 

Even had he not been defeated, with the change in party control, Rep. John Mica, R-Florida would still take the leadership position on this committee. Josh Mitchell, writing for the Wall Street Journal in a Nov. 5 article, talks about this in more detail.

 

If you have tracked Congress’s work (or lack thereof) in passing the FAA Funding Reauthorization Bill, you know that this bill has been held up from final passage due to non-related issues being attached to it regarding unionization of FedEx drivers. Mr. Oberstar was a friend of the unions, but his tenure in Congress is over.

 

Could it be that the gamesmanship might finally be over? Maybe we will get funding of NextGen and the FAA can take a long-term view of the development of the infrastructure this country needs to have an efficient air transportation system.  


More...

End of content

No more pages to load