STG professionals have assisted firms and investors participating in the regional aviation industry since US airline deregulation in 1978.  Our support for business aviation manufacturers started in the mid-1980’s, while our support for general aviation businesses began around the time of the General Aviation Revitalization Act in 1994.  Assistance to these clients has typically included:

• Strategic and competitive assessments
• Market analysis and forecasting
• Program and facility cost analysis
• Due diligence for mergers and acquisitions
• Expert Witness for legal proceedings

The types of aircraft products have ranged from 2-seat GA piston aircraft through supersonic business jets; they include both fixed and rotary-wing aircraft (helicopters and tilt-rotors).  In addition to product markets, we have addressed the FBO business and product support needs for companies in this business.  Our studies have evaluated service options such as air taxis, corporate shuttles and the benefits of alternative ownership models.

The following are a few sample project descriptions undertaken in recent years.  A fuller set of qualifications and prior project abstracts are available upon request.

Study of Air Taxi Prospects in the United States

STG professionals undertook this study on syndicated (multi-client) basis for five sponsoring airframe manufacturers who wanted an independent assessment of the prospects for air taxi services in the United States.  We undertook a critical review of the NASA-funded research in this area, highlighting the strengths and weaknesses of the various studies.  We undertook additional research of our own invesetigating domestic airline service deficiencies, economics of the newly introduced Very Light Jets, the annual volume of other (existing) forms of premium-priced air service and the length of time (years) it has taken for prior air service innovations to become widely accepted.  We combined these results into a forecast of passenger and aircraft demand.  The results were provided to our clients, the air taxi industry’s  trade association and to selected government agencies investigating possible future impacts of Air Taxi industry growth.  Our report was one of the major sources cited in a US Government Accountability Office (GAO) study of air taxi industry prospects and possible airspace impacts.

Business Aircraft Demand Forecasting Methodology Review

STG was requested to review the history and outlook for business jet deliveries by market segment by management of an established OEM. New management desired to confirm that a recent downturn was not likely to indicate a more fundamental structural change.

Our project team worked with client staff to provide a review of the market, buyers and competitors. We reviewed the various quantitative approaches to modeling business jet deliveries, including both "fleet" and "econometric" approaches to forecasting annual deliveries. While both showed advantages, we concluded that the econometric approach (incorporating supply-side attributes) provided the most accurate quantitative approach. We utilized this methodology to provide a 10-year forecast by segment. The client has since adopted this process internally.

Analysis of Business Aircraft Product Support Networks

This study was undertaken for a business jet airframe OEM to help them benchmark their product support efforts against those of competitors.  We reviewed the components and terms of 9 other business jet support programs and two independent programs.  We provide information on basic warranties, extended coverage available to either supplement or extend the basic warranty and ratings of the various support programs using public sources.  We also profiled the support networks as regards their use of company-owned support centers, authorized support centers and inventory practices. The competing support networks were evaluated within the context of the size and geographic distribution of their aircraft fleets.  Following our study, our client made revisions to their support network system and plan.

FBO Acquisitions:  Market Perspectives

In one study, STG’s client was conducting a due-diligence assessment in support of possible acquisition of two Fixed Base Operation (FBO) chains.  Our staff was retained to evaluate the market for services provided by the chains and to identify customer and competitor opinions about the quality of services and reputation of the chains.  The project team conducted a review of the various service, sales, overhaul and maintenance businesses in which the FBOs competed.  The team identified trends in these businesses and the risks or opportunities they presented to each of the chains.  We conducted interviews with over 40 competitors and customers as well as over 100 interviews with pilots in the region.  The results of our analysis were used to identify opportunities and threats that would need to be addressed as part of the client’s acquisition planning.  The client proceeded with the acquisition, and has subsequently expanded the chains.

In another study for an investment bank, we were requested to provide an analysis of the revenue sources and trends within the US FBO business, and information on the competitive ranking of the major chains.  We undertook a series of interviews with pilots around the United States, to assess their attitudes toward the various FBOs.  We compiled industry data and interviewed FBO operators to obtain their perspective on changes in their industry.  Our findings enabled our client to refine their financial models and a bid for one of the major chains.

Corporate Shuttle Opportunity Analysis

The STG study team worked with the management of a major Silicon Valley manufacturer to assess the viability of operating a dedicated corporate shuttle to connect their operations in Northern California with those in the Austin Texas area and possible other markets.  We identified sufficient travel in this corridor to justify the use of a dedicated EMB135 aircraft as the basis for the service.  The economics for such an operation were mildly favorable, and timing benefits relative to commercial travel on their partner airline would have also reduced overnight stays to the further benefit to company and employees.  However, the effect of diverting traffic to shuttle service was seen to have a larger, adverse effect on all other air travel by raising the negotiated rates with their major airline partner. 

Helicopter Operational Issues

This study was undertaken to provide members of an aerospace trade association a detailed understanding of helicopter operational issues in six nations with major helicopter fleets.  We undertook case studies of successes and failures for such applications as passenger transportation/air taxi, VIP transportation, material transportation and external loads, sightseeing, fire-fighting, Emergency Medical Services (EMS), and offshore oil support.  From these studies, we identified the factors that led to success or failure of helicopter operations for particular missions.  Interviews were conducted with helicopter operators to identify their requirements for special design features and special mission equipment that could enhance the success of their operations.  And finally, a review was undertaken of government regulatory activities that would influence helicopter manufacturing and operations, and of changes in the air traffic management system that might have similar effects.

Reciprocating-Engine General Aviation (GA) Aircraft Industry Evaluations

Two piston-engine, general aviation evaluations have been undertaken by STG staff.  In both of these studies, the existing airframe market was evaluated, and forecasts were provided of piston-engine aircraft deliveries.  The forecast results were subsequently presented at public conferences, where they were well received. 

The studies provided background information on the existing and emerging manufacturers of GA piston aircraft.  Data on the use of these aircraft, and fleet sizes in the United States and other world regions was summarized.  Drivers for piston aircraft demand, such as population demographics, the number of pilot starts, and the number of licensed pilots (in the United States) were reviewed.  The forecast provided three scenarios (including a preferred scenario) based on expectations of changes in the pilot population.