| Show S L IS I'S A GROWTH INDUSTRY PRIVATE PLANES By Babson's Baboons Reports Incorporated Wellesley Hills Mass The Business Business- Private Aircraft Industry known to the trade as General has more planes In the air uses more air facilities serves more places and logs more hours ours than all the major airlines together The rapid growth in the number num num- ber her of certified private pilots and students students stu stu- dents in training and the boom in flying clubs indicate the strong term long-term potential potential po po- for the industry paced by a swing toward fleets of owned company planes and a new trend to taxi com muter line operators Attractive Issues In 1968 the three leaders Beech Cessna and Piper recorded strong advances advances ad ad- vances and a well regarded aerospace marketing research fi firm n forecasts forecasts fore fore- cas casts s that thai by bv 1973 there will be a 47 per cents cent gain in unit sales of small planes over the number produced in 1967 Over 85 per cent of annual unit sales and 80 per cent of dollar doUar volume are generated by bv the Big Three Of these the Research Staff of Babson's Baboons Reports currently favors purchase of the common common com com- common mon stock of Cessna Aircraft for near near- term appreciation and growth We maintain main taro tain a hold position on Beech Aircraft Piper Is Js being wooed by Craft Chris and Bangor Punta with the outcome not yet resolved The common stock of Narco Scientific Industries is recommended for appreciation appreciation and term long growth This company company com com- pany is a leading producer of avionics electronic equipment for small air air- craft Air Commuter Commuter Line Market Currently representing a minor portion portion portion por por- tion of total epner general l aviation sales is the so called so-called called third level airlines or air ait taxis market representing those air taxi operators offering scheduled flights in areas not served by the regional and national airlines These air taxis Increased increased increased in In- creased from 12 in 1964 to last year a 69 per cent gain in passenger traffic was recorded for 1967 compared to a 22 per cent gain for all scheduled domestic domestic do do- airlines By designing new aircraft aircraft air air- craft both for passenger and cargo operations the Big Three are assured of a substantial share of this market Corporate Market Since 80 per cent of new ing plant facilities are located in areas not served directly by commercial carriers carriers car car- the demand for owned company-owned planes plane is creating general aviation's largest largest lar lar- lar gest market Only 10 per cent of this markets market's potential of businesses that could profitably use one or more aircraft has been penetrated Key indicators of the he growth of this market are the 50 per cent increase in the number of student pilot certificates certificates cates from 1964 to 1967 and the rise in the number of flying clubs to 2500 opera operating aircraft The manufacturers ers help foster this growth by offering inexpensive instruction and assistance in financing purchases of new aircraft through a substantial dealership network net net- work Bright Term Long Prospects Manufacturers of private planes have enjoyed a good but variable upward trend in the number of aircraft sold However r over oyer the past decade a shift to hither higher I nel priced and more versatile planes by both flying enthusiasts and corporations has resulted in a faster and more even pace for revenues This trend i is expected to continue in ill the future as shipments rise More extensive extensive exten exten- sive distributor dealer organizations and plans for closely factory branches should also favor an acceleration acceleration of growth over the long term A cessation of the Vietnam conflagration conflagration ration would in our opinion also contribute contribute con con- tribute importantly to the future pro pro- More commercial business would t. t be sought by many companies to replace replace re reo place government business this would i require more business aircraft travel 0 Finally the strong and expanding export ex ox- port market 20 per cent of sales is growing at a faster rate than the domestic domestic do do- market U. U S. S producers have ave a definite edge over foreign manufacturers ers and this is expected to widen in inthe inthe inthe the next decade |
