Press Release

Contact: Adam Feld, Airborne Retrofit & Modernization Analyst

Phone: (203) 426-0800

Fax: (203) 426-4262

Web site: www.forecastinternational.com

E-mail: adam.feld@forecast1.com

Forecast International, Inc.

22 Commerce Rd. Newtown, CT 06470 USA

FOR IMMEDIATE RELEASE

Light Aircraft R&M Market Healthy, but Mercurial

NEWTOWN, Conn. [September 29, 2009] — In its new analysis entitled “The Market for Light Aircraft Retrofit & Modernization,” Forecast International estimates that nearly $1.7 billion will be spent on upgrades for fixed-wing aircraft weighing less than 70,000 pounds during the 2009-2018 period.  As the electronics sector has stabilized after a spike fueled by FAA mandates, the market will be led by propulsion upgrades.

“In the light aircraft market, emotion and personal preference play a much greater role than in other markets,” said Adam Feld, airborne R&M analyst and author of the report. “An operator may choose one aircraft over another purely due to taste, and a new aircraft is often preferable to an older one, even if modernization has bridged any gaps in performance.”

With a new generation of very light aircraft entering the market – with some as cheap as $1.5 million – the retrofitting option is losing its cost advantage.  Some of the more appealing electronics retrofits, such as Wide Area Augmentation Systems (WAAS), are relatively affordable, while others, like re-engining, can cost more than an entirely new aircraft.  However, private operators are often more interested in maximizing their investment through performance upgrades rather than focusing on efficiency.  Comfort can also be a priority, one that is rarely affordable in other markets, such as the military sector.

Re-engining and refurbishment programs that include engine modification are also more popular in the light aircraft market. “While militaries and large carriers struggle to find funding for expensive fleet-wide re-engining efforts, a private individual or corporation may have an easier time fitting in a new engine or two,” said Feld.  "Smaller fleets and cheaper engines can make the price easier to manage, even with a comparably smaller budget."

Meanwhile, a modest but steady market for cargo conversions remains.  Small cargo aircraft have shorter ranges and are less efficient than their larger cousins, and as a result the cargo conversion market is but a fraction of comparable programs on larger platforms.  The airframe modification market is also fed by a number of winglet upgrade programs, though their popularity is expected to decline as more new-build aircraft come with winglets already installed. 

Despite these trends, the FAA and other aircraft associations have a large influence on the light aircraft retrofit market.  An FAA mandate can easily lead to a dramatic increase in activity, particularly in the electronics sector, as operators hurry to comply.  In recent years, mandates for traffic collision avoidance systems (TCAS) and reduced vertical separation minimum (RVSM) compliance had temporarily revitalized the electronics aftermarket.  However, these spurts of activity rarely last long, as associated programs rapidly run their course.

The light aircraft retrofit market shows no signs of weakening over the next 10 years, though the exact course it will follow depends on a number of factors that are notoriously difficult to predict.

Forecast International, Inc. (www.forecastinternational.com) is a leading provider of Market Intelligence and Analysis in the areas of aerospace, defense, power systems and military electronics.  Based in Newtown, Conn., USA, Forecast International specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide.  To arrange an interview with Forecast International’s editors, please contact Ray Peterson, Vice President, Research & Editorial Services (203)-426-0800, ray.peterson@forecast1.com.