Convenience, Markets, Advances Lead to General Aviation Backlog

by Mark Hengel  on Monday, Aug. 25, 2008 12:00 am  

Carl Finch and Cheri McKelvey, co-founders of AirResource Group of Little Rock, say it's a good time to be in the business of brokering and managing aircraft for private and business clients.

AirResource Group of Little Rock is in the right business at the right time.

General aviation manufacturers are facing a massive backlog of orders, totaling $58 billion industrywide, according to a General Aviation Manufacturers Association spokeswoman.

And Carl Finch and Cheri McKelvey, AirResource's co-founders, are taking advantage of the increased demand and short supply.

The two act as brokers for private and business airplanes, while also assisting owners with staffing and management. They have also found an interesting new business niche: Helping people cut in the long line of buyers waiting for new aircraft.

"Say someone has an airplane to deliver in October" but decides not to purchase the plane, Finch said. "We can sell [the place in line] to someone who wants it."

The backlog has formed thanks to a number of converging phenomena. Many companies now have company-owned aircraft that allow top executives to better use their time; businesses have developed that allow companies to purchase a plane in what amounts to a timeshare agreement; and the market for jets and airplanes is growing in markets outside of the United States and Europe.

Two of the five major general aviation manufacturers have completion facilities at the Little Rock National Airport. Hawker Beechcraft Corp. and Dassault Falcon Jet Corp. recently expanded their Arkansas operations to keep up with demand. The two are both facing backlogs worth billions of dollars. Dassault's general aviation backlog totals more than $15 billion, according to company documents. Hawker's backlog totaled $7.4 billion as of June 29, according to filings with the Securities & Exchange Commission.

Despite AirResource's location in Little Rock, the company has developed a clientele that reflects the worldwide demand in business aviation, McKelvey, the company's vice president, said.

"As far as sales, we do business worldwide," McKelvey said. "As far as management, it's typically local."

Advances in small and mid-size airplanes have resulted in increased demand, she said. Plus, the ability to bypass commercial airlines is leading many businesses to invest in aircraft.

"A lot of the airplanes the manufacturers are building now are upgraded," she said. "And with the airline industry being what it is, it is more advantageous for a company to own its own aircraft."

It's Good Business

John Nance, aviation analyst for "ABC World News," said people often draw the wrong conclusion about why personal jets have experienced a boom in recent years.



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