FW: The Rockwood Report, October 2007

Welcome back from the NBAA convention. I couldn’t attend this year (first since 1977). However, I’m anticipating the press release saying, it was “the biggest, best attended, and spectacular” show ever. Wow! That was uncharacteristically cynical.

I promised some thoughts on winners and losers resulting from the projected phenomenal growth in corporate aircraft (jet) sales. The first group to benefit will be the manufacturers. Well DUH!!

Beyond the obvious though is the fact that, with huge back logs, they will be able to force more and more standardization. As any manufacturer will tell you, the more you can standardize your product, the lower your costs and the higher your profit margins.

The second group will be the folks you are just now starting to see come on line; completion centers and modification shops that will specialize in more exotic customization, including those that are linking with a high end stylization name (Pinafarina; Hermes; etc.). Don’t be surprised if you see a brand new G-550 deliver with a Gulfstream interior, then go straight to another completion facility who will then add personalized touches.

High end products hate commoditization.

More thoughts next month.

Bob Rockwood

202-682-4000 (Main phone number)

540-554-8113 (Direct phone number)

racersblue@earthlink.net (Direct email)

www.bristolassociates.com (Web address)

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