Flying Economy

We know the economy is having a hard time. We don't have to be rocket scientists to figure this out. All we have to do is look around at the number of foreclosures, the slowness of the real estate market and the stock market, the number of families having to refinance their homes, or cancel their heating because they cannot pay for it in winter, or see the growth in the numbers of residents at family homeless shelters.

And now, a new survey released by the Spectrem Group, shows that even the growth of millionaire households in the country has slowed. This survey shows that millionaire households rose by 2.2% to 9.2 million in the U.S. in 2007. It was the slowest growth rate for households with a net worth greater than $1 million since 2004.

This is a tad bit misleading. Spectrum does not include primary residences in measuring net worth but does include real estate owned for investment. About 8% of millionaires' money is held in the latter category.

One implication of this slowed growth rate: well, if you've been trying to get your hands on a private-jet recently and were told you wouldn't receive your newly purchased plane until 2012 or 2013, be patient. One analyst has found that jet prices drop about three to four quarters after the GDP does, and since we seem to be headed for a recession, that means the supply of jets will go up and the demand will go down.


And here is some proof of supply (each of these notices were released in the past two months which really really surprised me):

"Gulfstream has announced their fastest business-class jet ever. The new G650 jet can fly nearly as fast as the speed of sound, .85 Mach and is their biggest plane to date. It will have a nautical range of 7,000 nautical miles meaning it can fly nonstop from Los Angeles to London. The plane will cost $59.5 million and is aimed at the highest end of the private jet market."

"Sir Richard Branson's Virgin Charter Marketplace, a place to shop for private jet charters online, just launched and already they have their first air taxi service offering trips on the Eclipse 500 very light jet. Linear Air which is based on Concord, Massachusetts is the only air charter in the Virgin Charter network offering this plane."

"In 2005, Lufthansa started their private jet program, partnering with NetJets. Things must be going well Lufthansa has announced their plans to have a private jet fleet ready for summer 2008. The company will receive seven private jets from Cessna soon and will continue to work with private jet companies. They plan to offer four different categories of planes ranging from four to 12 seats. The number of private jet flights for Lufthansa rose 26% last year."

"More proof of Russia's economic power: the Eclipse 500 Very Light Jet will soon be made in Russia. The Eclipse is the first foreign jet aircraft to be made in Russia. Production will start next year in Ulyanovsk, the hometown of Lenin. Dutch investment company Etirc Aviation, Eclipse Aviation and the Russian Aviastar aircraft complex have laid the foundations for the new assembly plant. Russia's growing crop of millionaires will be able to pick up the plane for $1.5 million."

"Gobosh Aviation unveiled a new luxury sport aircraft at the U.S. Sport Aviation Expo in Sebring, Florida last month. The new 800XP is an all -composite Light Sport Aircraft which will be manufactured in the Czech Republic. It has a Dynon ERIS-D100 glass cockpit and an airframe parachute system. The top of the line 800XP Elite+ Edition is designed fro the private owner and has leather seats, Garmin 396 with XMWX capabilites, Bose headset jacks and much more."

I don't know about you, but I'm sick to my stomache.