The business class aviation industry is officially feeling the pinch of the recession. Hawker Beechcraft Corporation, known for its high-end private jets for the business class, has reported lower net sales and an increased operating loss for the first quarter ending March 29, 2009. The lower sales were imminent with response to the cancellation of private jet orders from prospective customers; even the big corporations and elite of the society were forced to part with their corporate jets to cut down on their extravagance including Starbucks, Citigroup and Time Warner, to name a few. Hawker reports that business and general aviation aircraft deliveries were impacted by the deterioration in the overall economy and totalled 57 for the quarter, compared to 72 for the first quarter of 2008. Net sales for the first quarter were $537.6 million, a decrease of $38.9 million compared to the same period in 2008. Though the company has enough cash on hand to meet its cash requirements for the next 12 months, the company has notified its employees of likely further reductions in production volumes and in the size of its work force in the coming weeks.

The private-jets segment is not the only one to bear the brunt of the recession. Times are tough industry wide and, world’s biggest airlines are reporting heavy losses and cut-offs. American Airlines reported a $375 million loss for the quarter after sales fell 15 percent. Qantas slashed 1750 jobs to cope with the recession. Qantas chief executive Alan Joyce said -

“The airline had no choice but to lower its profit forecast and make major changes to ensure it could weather the current commercial environment.”

Even the private jet firms offering fractional ownership are seeing a slowdown. NetJets, the biggest fractional-ownership corporation in the U.S., has experienced a significant reduction in revenue. “The jet market stinks,” said Richard Santulli, the chief executive of Netjets, the private jet company owned by Berkshire Hathaway, the holding company led by Warren E. Buffett- reports NYTimes.

But, as Frank Ketchan, a Economist reader says,

More than 70% of the time the [corporate] aircraft fly with one or two people as passengers and they often fly empty after dropping someone off or picking someone up. To add insult to injury, corporate aircraft utilize the same resources that commercial aircraft use. The resources required of the air-traffic control and airport system to fly a chief executive in his jet are the same required to fly a 767 full of passengers. Corporate jets further clog up our already crowded airspace.

The super rich are criticized for triggering the worst recession the world is facing – how far this allegation hold the grounds? Share with us your views in the comments section.

Via: PRWeb440788