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Czech aircraft face heavy crisis

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AirVenture Oshkosh 2009, the world’s biggest aviation trade fair, ended Sunday. This year’s event was missing the usual stand sponsored by Czech Ministry of Industry and Trade, which is where Czech producers of small sport aircraft can usually be found.

But the Industry and Trade Ministry prefers the air show in Friedrichshafen this year. “Supporting the same events as always would not be efficient,” ministry spokesman Tomáš Bartovský said, adding that CZK 1.3 million has been earmarked for Czech presence at the German fair (the same sum was allocated for Oshkosh last year).

The Light Aircraft Association of the Czech Republic said this is an unfortunate step. “It is a pity because the official stand considerably supported the efforts of domestic producers in past years. Continuity is important,” association vice-president Jan Fridrich said.

The absence of Czech support in Oshkosh, Wisconsin, closed the door to the trade fair for small producers. Last year, 11 Czech manufacturers participated in the fair (and concluded contracts worth CZK 66 million). This year there were only seven, including Evektor-Aerotechnik, Czech Sport Aircraft, TL Ultralight, and the aircraft engines producer Walter Engines, which was acquired by US company GE Aviation last year.

Czech participants in the air show estimate that the volume of orders signed there this year could be half of last year’s sum.

“Even though visitor numbers increased to nearly 580,000, the exhibitors confirmed that it is harder to sell this year,” Fridrich said. The global market for light sport aircraft is estimated to have fallen at least 30%.

Weak dollar makes planes more expensive
Favourable legislation once made the US the most important market for Czech aircraft producers, but the economic crisis and the weak dollar slashed overseas sales significantly. Two years ago, US customers could buy a small, well-equipped, Czech-made aircraft for USD 70,000. The same plane now costs USD 30,000 more on average. “Our producers have to go down to the very threshold of profitability in order to sell something at all. Despite that, sales in the US have fallen more than 50% compared with the previous period,” Fridrich said.

Jiří Tlustý, owner of TL Ultralight, agrees. He sold around 70 planes on the US market in the past few years, but has sold only two this year. Foresight is helping his company through the hard times, however. “We did not rely on the US boom but continued to sell in Europe, too. That is paying off now,” Tlustý said, adding that the crisis would cut sales in his company by 35% this year anyway. To reduce the slump, the company is searching for new markets. “We have been successful in supplying our products to Israel, for example,” he said.

Other manufacturers are not so lucky. Fantasy Air, known for its Allegro model, ended up in insolvency proceedings last year. A US representative of the firm saved the brand in the end, and is now launching production in the US. Another producer, Urban Air, was declared bankrupt in July.

The difficult situation that aircraft producers are experiencing benefits their customers. When ordering planes and equipment, they can ask for more. “Today, when a client comes and says that he wants special devices which we normally do not supply installed in the cockpit, we accommodate him. That was not common practice in the past,” said Milan Mach, sales manager at Evektor, one of the large Czech producers with turnover of about CZK 500 million a year.

What could help producers is the introduction of a unified global category of small aircraft, which Czechs are trying to push through.

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