Business Aviation Outlook: The Bright Decade Ahead
The business aviation sector has a promising future for the next decade, with forecasted projects valued at $251bn, equivalent to around 7,700 new aircraft being delivered between 2019 and 2028. Most of this growth is expected to occur in 2020 when 24% of these deliveries are scheduled for operators. Furthermore, one of the key factors influencing this market performance is the annual growth rate of 4% worldwide, triggered by the improved economic performance of new models.
The key players in the industry; Bombardier, Honda, and Embraer provided an optimistic outlook for their operations during this year’s Business Aviation Convention & Exhibition (EBRACE), held in Geneva. Honda stood out and launched its new HondaJet Elite with 17% range increase, shorter take-off and improved avionics. Embraer did not fall behind and presented its newcomer; Embraer Phenom 300E, whose cabin has been entirely re-designed including the well renowned Lufthansa Technik’s HD Cabin Management System. Additionally, records were broken by the Gulfstream G600, which appeared in Europe for the first time. The jet used a renewable fuel blend and set a city-pair record by completing the journey from Savannah, Georgia in 7hrs 49mins.
The Canadian manufacturer Bombardier impressed experts this year with the unveiling of its Global 5500 and 6500. The jets feature stunning new Rolls-Royce Pearl Engines and a redesigned wing, which Bombardier claims would make the aircraft some of the cleanest and most efficient worldwide.
These operators continue to focus on larger-cabin aircraft classes, ranging from the Super Mid-size through Ultra Long range, which are expected to represent nearly 90% of all expenditure of new business jets in the next 5 years.
Breakdown by Region
North America:over 60% of the worldwide demand will be generated by operators in this region, which remains as the industry’s largest market with nearly 70% of the installed base.
Europe: Brexit represents one of the biggest threats with its uncertain effects for operators, notwithstanding this, demand from this region raised by 16% in comparison to the previous decade.
Latin America: Brazil’s high demand from operators was shadowed by a drastic reduction in demand from Mexico, which reduced the region’s demand by 6% and represents 12% of the global demand.
Asia Pacific: Geopolitical and regional tension have affected slightly the demand with a reduction of 1%, nevertheless, generating a stable global demand for new jets of 7%.
Middle East & Africa: Conflicts continue attacking the market in these regions, with the lowest purchase plans reported with 4% over the last 5 years.
The main challenge expected with the rapid incorporation of these new models is the negative effect on the trade of the used jets (0-10 years old), which already in North America has declined due to the increased asking prices, adding to the annual decrease of resale of 30% of 0-10 years old aircraft worldwide.
Business Aviation is an industry focused on innovation and investment in the future with the new aircraft models and their flight-efficiency upgrades, expanded propulsion offerings and enhanced connectivity shaping the future of the industry. Brookfield Aviation International is a key player for the evolution of this industry sector, having provided pilots and engineers since 1993 to not only some of the biggest airlines worldwide but also directly to some of the key shapers and renowned manufacturers of the aviation industry.