For the past five years (at the time of writing in October 2006) the aerospace industry has been trying to gauge the real impact of the emerging VLJ sector - its potential size and impact on existing air travel markets - with little real success. For aviation forecasters the idea of a relatively cheap but advanced form of personal jet travel has divided the market between cynics and optimists.

Even now, on the eve of the launch of VLJ services, the picture is not really much clearer. While Eclipse Aviation is preparing the ground to manufacture up to 1,500 VLJs a year, some aviation forecasters are far more downbeat with their predictions.

"Market demand for VLJs is speculative at this point, and business aviation and owner-operators may be slow to buy the new models, which basically are smaller versions of more luxurious business jets," writes Vaughn Cordle, CEO and chief analyst at Airline Forecasts, LLC, in June 2006. "One analyst believes that few commercial airline customers will want to move up to the higher costs of VLJ air taxis, while well-heeled charter and fractional jet users will not want to use the smaller and less comfortable aircraft."

Mr Cordle concludes: "In my view most of the air taxi orders will never materialise. Most will be not be able to raise the capital to get off the ground, at least to the degree currently envisioned."

The reason for this continuing debate is that there are two new concepts to consider - a new type of aircraft and a new type of travel package. The idea of an air taxi operation based on VLJs offering bespoke, cost-effective services to individuals and small groups of customers via a network of small, accessible and passenger-friendly airports has caught the imagination of many in the air travel industry. And the considerable success of the Eclipse 500 programme, not just in sweeping up over 2,500 orders but also in finding the finance and partnership deals to support the programme in the long term, has suggested this is indeed an important new market.

But the VLJ concept also raises as many challenges as opportunities to those trying to gauge its real impact. Will the air-taxi operators be able to sell their product, and thrive as planned? Will the real cost of owning a VLJ - with the added expenses of training, maintenance and insurance - increase beyond the original customers' scope? Will the current airport, ATM and regulatory structures be able to cope with a sudden and huge influx of these new aircraft?

There is no easy answer, largely because every aircraft poses a different challenge to the forecasters.

The success of the Eclipse 500 is indeed remarkable. For Eclipse, 60 percent of its customer base is in the air taxi and air charter market; but at the other end of the spectrum 80 percent of Cessna Mustang sales are expected to come from the owneroperated market. Of the 341 Adams A700 sales (September 2006) only 65 have come from private owner-operators. The Diamond D-Jet is designed primarily for the owner-flown market but Embraer Phenom 100 orders are split evenly between the private owner market and the air taxi/air charter market.

The objective of this study is to gather as many of the salient facts as possible and generate a realistic forecast of the potential of this market. On the eve of VLJ operations some of the early questions - such as will the aircraft make it to certification and production - have clearly been answered. But the key question remains: are we really at the start of a new era in aviation?

This study is not being produced as a stand-alone publication; the authors will revisit the forecasts and assumptions on a regular basis to update and refine production figures, programme details and other analysis contained within the publication. Further details of these plans can be provided on application to the publishers.

EXECUTIVE SUMMARY

INTRODUCTION

• Reason for and timing of the work
• Methodology - top-down and bottom-up approach
• Report writers
• Sources

SECTION 1: THE VLJ CONCEPT

• 1.1 Origins of the VLJ market and lessons learned
• 1.2 Technical and market drivers
• 1.3 Impact on the global aircraft manufacturing market
• 1.4 VLJs and the aircraft interiors sector
• 1.5 The challenges - financial and maintenance support
• 1.6 The global air transport industry and the role of business aviation,especially VLJs
• 1.7 Potential impact of VLJs on current travel patterns, scheduled and charter aircraft operators
• 1.8 Differences between continents - a global view of the market
• 1.9 The current air taxi market - dominated by turboprops
• 1.10 The VLJ air taxi market
• 1.11 Owner-operators

SECTION 2: DELIVERY FORECASTS

• 2.1 Global VLJ market trends - high-level predictions
• 2.2 Relevant economic and industry trends
• 2.3 Forecast delivery and production figures, annually 2007-2016, by manufacturer
• 2.4 Forecast customer demand, by geography and type
• 2.5 Impact on other general aviation sectors - turboprops, light jets

SECTION 3: VLJs AND REGULATIONS

• 3.1 Current regulatory analysis for VLJ operators, manufacturers and support companies
• 3.2 Potential new regulatory challenges

SECTION 4: VLJS AND AIRPORTS

• 4.1 Impact of VLJs on the current airport infrastructure
• 4.2 The Florida experience
• 4.3 Opportunities and challenges for major hubs
• 4.4 Opportunities and challenges for secondary airports/small airfields
• 4.5 Global differences

SECTION 5: TRAINING

• 5.1 Training issues
• 5.2 Manufacturer' s training programmes
• 5.3 Training market implications - estimated number of pilots and support staff required

SECTION 6: VLJs AND AIR TRAFFIC MANAGEMENT

• 6.1 The current and planned ATM network
• 6.2 ATM future funding levels - impact on business aviation

SECTION 7: INSURANCE

• 7.1 Insurance packages and potential cost implications for owners

SECTION 8: PROJECT-BY-PROJECT ANALYSIS

• 8.1 Current production/development status
• 8.2 Major partners - technology suppliers and partners
• 8.3 Programme strengths and weaknesses

APPENDIX 1

• Technical details of current projects

APPENDIX 2

• Manufacturer details - company profiles

APPENDIX 3

• Manufacturer training packages

APPENDIX 4

• Cost and performance comparisons