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Tue, Dec 06, 2011

Analyst: Better Times Ahead For Bizjet Market

Study Predicts Nearly 11,000 Jets Will Be Built By 2020

In a new study "The Market for Business Jet Aircraft," Connecticut-based market research firm Forecast International predicts that 10,907 business jets will be produced between 2011 and 2020. The value of this production is estimated at $230.3 billion in constant 2011 U.S. dollars. The study projects that business jet production will resume growing in 2012, after declining each of the previous three years.

Cessna Citation M2

According to FI Senior Aerospace Analyst Raymond Jaworowski, "Business jet production in 2012 will show some minor improvement over 2011, but more substantial growth in build rates will have to wait until 2013." Production is forecast to total 728 units in 2012, signaling the start of a gradual, though potentially long-lasting, market recovery. The anticipated recovery is expected to be quite measured in its pace, with the 2008 production total of 1,313 business jets not expected to be reached until the year 2018.

Manufacturers have a number of new business jets in development. These range from the Cessna Citation M2 light jet up to ultra-long-range models such as the Bombardier Global 7000 and 8000 and the Gulfstream G650. The manufacturers are hoping that the new models will not only benefit from the improved market conditions expected in the future, but also contribute to the recovery themselves by stimulating demand.

The worst of the industry downturn is over, but much of the business jet market remains sluggish, especially the light and medium jet segments of the market. Demand is considerably stronger at the top end of the market, in the large-cabin and long-range sectors. This tale of two markets will not continue indefinitely, however.

Gulfstream G650

In the meantime, other indices look promising, as business aircraft utilization is up and the market for used business jets has stabilized. Economic growth has returned, though it remains weak in key regions such as the U.S. and Europe. Corporate profits, a key leading indicator of future business jet demand, are strong.

Forecast International's market forecast indicates that the top three business jet manufacturers in unit production during the 2011-2020 timeframe will be Cessna, Embraer, and Bombardier. When the market is measured in monetary value of production, the top three companies are projected to be Gulfstream, Bombardier, and Dassault.



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