June 28, 2012
Even amidst a slowing global economy and a financial crisis in the European Union, most forecasters remain optimistic, predicting a gradual, but sustained period of business aviation market growth lasting well into the next decade.
For example, in June, Bombardier Aerospace issued its annual 20-year forecast for the industry. While the company expects business jet deliveries in 2012 to equal last year’s numbers, it predicts that a sustained period of growth will begin in 2013, with roughly 24,000 business jet deliveries, valued at $648 billion, expected from 2012 to 2031.
Bombardier said most of that growth will occur in North America, where new business jet deliveries will reach about 9,500 units, followed by Europe with 3,920 deliveries. Bombardier predicts that China will become the third-largest business aviation market, with aircraft deliveries expected to total about 2,420 units in the 2012-2031 period.
Bombardier joins a number of other companies that over the last six months have forecast growth for business aviation starting this year. Among them is Teal Group, which is holding true to its most recent forecast issued in April. The firm looks for a decade of growth to begin in the second half of 2012, according to Richard Aboulafia, Teal’s vice president of analysis.
Teal forecasts deliveries of 10,249 traditional business jets worth $249.5 billion; 568 corporate aircraft and regional jets valued at a combined total of $42.3 billion and 3,062 business turboprops between 2012-2021. It predicts the industry will grow by 6 percent this year and 8 percent next year, followed by four years of much stronger 12-percent annual growth starting in 2014.
Meanwhile, business aviation market analyst Brian Foley, of Brian Foley Associates, is more sanguine about the industry’s prospects in 2012 and long term.
“There’s a lot of impatience, and understandably so, for things to have measurably improved by now,” said Foley. “However, the industry seems to be forgetting that historically the business cycle has averaged five years up and five years down. Normally, we’d still have another year to go before expecting the next up-cycle.”
Nonetheless, there are signs that the business aviation market improved through the first quarter of 2012 and into the second. In June, Cincinnati-based ARGUS International Inc. reported that the aircraft charter market posted its first increase in activity in more than a year in May 2012 as flight activity increased 3.5 percent overall from April 2012. Looking at the various categories, Part 135 charter activity rose by 5.3 percent in May, while Part 91 activity rose by 3.9 percent. The Part 91K segment posted a 1-percent decline, according to the company’s ARGUS TRAQPak report. Year-over-year, overall business aircraft activity was up by 1.9 percent.
Also in June, the business aviation market research firm JetNet said inventories of available pre-owned business jets fell to 13.6 percent of the total market in April, a 0.7 percent decline from the 14.3 percent market of April 2011. Business jet transactions also increased by 4.1 percent in the first four months of 2012, while prices were generally flat, posting a negligible 0.1 percent increase.
The for-sale inventory of turboprops declined 1.3 percent from a year earlier to 9.2 percent, while turboprop sales rose by 3.1 percent in April.
International Business Aviation Council Ltd.