Business Monday

Miami trade trends: Regional jet imports at record pace

ROBERTS
ROBERTS

New York became a “world city” thanks to the steamship and open water. Los Angeles became one of the world’s great cities because of the automobile, which freed Americans to head west on open roads. Miami is generally viewed as the first major U.S. city to gain its stature from the airplane, that most “modern” form of transportation, which freed people to fly across the country and continents.

Rising to great prominence here were Pan American World Airways, Eastern Airlines and National Airlines. Though they are all long gone, South Florida is still one of the world’s leading centers for aviation maintenance, repair and overhaul — MRO, as it is called in the industry — as well as vendors. Companies like HEICO and B/E Aerospace, Barfield and AAR Corp. are headquartered here or have an important presence.

It doesn’t end there. Flight training centers that bear the names of the world’s two largest jet manufacturers, Boeing and Airbus, operate just north of Miami International Airport, and would-be pilots from around the world learn to fly on simulators here.

But when it comes to the impact of aviation on South Florida import-export trade, an 84-year-old Brazilian by the name of Ozires Silva might be just as important as anyone these days. Silva is the founder of Embraer, one of the world’s leading manufacturers of regional jets.

And so far this year, no South Florida import has grown more in value over 2014 than aircraft.

This is the third in a series of columns focused on South Florida’s leading imports, gold and gasoline having been covered in the previous two. Aircraft actually ranks fourth, trailing “exports returned for repair.” I decided to spare you a column on exports returned for repair.

U.S. rank: Aircraft is one area of trade where the United States is a net exporter, thanks to Boeing. While apples-to-apples comparisons are difficult because the U.S. Census Bureau treats exports and imports slightly differently, aircraft is the United States’ leading export this year, replacing oil, and No. 20 on the import side — which is still significant. Just four years ago, aircraft ranked No. 35 on the import side.

Canada, home to Bombardier, one of Embraer’s chief rivals, is the leading source of aircraft entering the United States this year. It is replacing France, which had been No. 1 since this time in 2009. France is home to Airbus, of course, but also to the regional jet manufacturer Dassault, of which it is a part owner.

While overall jet imports are up 10.41 percent this year, and imports from Canada are up 14.20 percent, imports from the fourth-most-important market, Brazil, are up a far more robust 79.97 percent.

South Florida trade: That increase in aircraft from Brazil explains why the category, ranked No. 7 among South Florida imports just one year ago, now ranks No. 4. Through the first six months of the year, aircraft imports into South Florida totaled $1.16 billion, a 60.04 percent increase over the same period in 2014. The total puts it ahead of the record pace set in 2005, the last time imports topped $1 billion midway through the year.

But, even though many of training centers and much of the MRO business is centered around Miami International Airport, and even though MIA is the dominant airport in the state and one of the most dominant in the nation for export-import trade, almost all those jets are touching down about 30 miles north, at Fort Lauderdale/Hollywood International Airport.

In fact, though Fort Lauderdale International does little export-import trade overall, it ranks second in the nation for the value of imports of regional jets, trailing only the airport in Bangor, Maine. Imports into Fort Lauderdale have tripled in value from two years ago, from $305.02 million to $915.06 million.

In terms of the number of new passenger aircraft imported this year, the South Florida Customs district ranks No. 1, with 29 jets, one ahead of the Portland, Maine, district, which includes the Bangor airport.

Where it originates: In South Florida, it all comes back to Silva and Embraer, which has its North American headquarters at Fort Lauderdale/Hollywood International Airport.

Through the first six months of 2015, 65.05 percent of all aircraft, by value, have come to South Florida from Brazil. While that’s impressive, the $754.90 million in Brazilian aircraft is only the fifth highest total in the last 12 years.

Higher totals were reached in 2003, 2004, 2005 and 2008. The most significant growth of late is coming from France, which this year is capturing 28.24 percent of the import market into South Florida, up from less than 1 percent a decade ago. Those jets, too, are almost exclusively touching down on the runways of Fort Lauderdale’s airport.

Importance to South Florida: So far this year, aircraft are accounting for 4.81 percent of the value of all imports into South Florida. While that may not sound impressive, no import is accounting for more than 10 percent. There are, after all, more than 1,000 import categories. But the percentage, while a strong uptick from the 2.87 percent one year ago, is well below the 7.59 percent from 13 years ago. Through the first six months of 2002, 2003 and 2004, aircraft was South Florida’s leading import.

South Florida competition: You might have noticed that imports into the United States from Brazil were up more than 79 percent while imports into South Florida were up about 60 percent. The difference is Puerto Rico.

Aircraft imports into the Puerto Rico Customs districts have grown substantially. From 2008 to 2013, there were no imports into San Juan’s Luis Munoz Marin International Airport in the first six months of the year. Last year, the total jumped to $159.48 million. This year, the total is $479.49 million — or more than 40 percent of the total U.S. imports.

Coming next: South Florida’s fifth most important import is cellphones and other phone equipment.

Reach Ken Roberts, president of World City, at kroberts@worldcityweb.com. Twitter: @tradenumbers.

South Florida regional jet imports

June 2015 YTD

1 Year

1 Year

10 Year

10 Year

World Total

$ 1,160,570,215

$435,406,336

60.04%

$136,812,502

13.36%

Brazil

$ 754,898,287

$250,678,308

49.72%

($229,115,027)

-23.28%

France

$ 327,800,000

$143,300,000

77.67%

$327,446,840

92719.12%

Canada

$ 48,023,451

$29,773,451

163.14%

$9,173,451

23.61%

Italy

$ 14,835,000

$1,324,578

9.80%

$14,835,000

NA

Israel

$ 9,000,000

$9,000,000

NA

$9,000,000

NA

Czech Republic

$ 3,044,085

$2,831,491

1331.88%

$2,644,445

661.71%

Spain

$ 2,500,000

$2,500,000

NA

$2,500,000

NA

New Zealand

$ 369,180

$369,180

NA

$369,180

NA

Hungary

$ 64,212

$64,212

NA

$64,212

NA

Russia

$ 36,000

$36,000

NA

$36,000

NA

Source: WorldCity analysis of U.S. Census Bureau data

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