Business Jet Market Still Growing, But Nearing Its Peak
Forecast International's new study on "The Market for Business
Jet Aircraft," expects annual business jet production to reach
nearly 1,400 units in 2008, and exceed 1,600 units in 2009.
However, the company projects that annual production will then
suffer a three-year decline, dropping to a level of 1,515 units by
2012. Growth is expected to resume in 2013, with yearly production
exceeding 1,700 units by 2017, the final year of the time period
covered by the study.
Overall, Forecast International projects that 15,936 business
jets, worth an estimated $223 billion, will be produced from 2008
through 2017. This total includes some 5,600 Very Light Jets
Despite the current shakiness of the VLJ segment, Forecast
International still expects the VLJ sector is expected to be a very
dynamic portion of the market. VLJs are the smallest aircraft on
the business jet market, and include such models as the Eclipse 500
and the Diamond D-Jet.
"The business jet market has experienced tremendous growth since
2004 and, though the growth track continues, the question on the
minds of nearly everyone in the industry concerns how long the good
times will last," states an FI release. "While continuing to rack
up strong sales, business jet manufacturers are sitting on high
order backlogs and cannot get aircraft to their customers quickly
enough. Manufacturers and completion facilities are bumping up
against capacity limits, while customer waiting times for new
aircraft are lengthening.
"Nevertheless, warning signs are appearing that seem to indicate
that a market downturn is on the way. The United States and parts
of Europe are experiencing an economic slowdown. US corporate
profits are down. Fuel costs are surging. New fees and operating
regulations may soon be imposed on business aviation operators.
Large numbers of business jets delivered in recent years have led
to conditions of market saturation in the US. And the inventory of
used business jets for sale has been growing in recent months,
often a sign of a weakening business jet market."
Though the new study anticipates a decline in business jet
production between 2010 and 2012, Forecast International believes
the decline is expected to be relatively shallow, with the industry
emerging in very good shape. Projections indicate that production
will drop by only about seven percent over the three years, thus
paling in comparison to the double-digit production decline
experienced in the industry’s last downturn in 2002-2003.
The study lists a number of reasons for this anticipated
shallowness of the upcoming market downturn. One is the strong
order books enjoyed by manufacturers, which include large numbers
of orders for models still in development that are targeted for
service entry after 2010. Another is the increased diversity of
geographic demand for business jets.
According to Forecast International senior aerospace analyst
Raymond Jaworowski, "Though the US is still the largest single
geographic market for business jets, non-US customers now account
for more than half of business jet sales. Robust sales in other
parts of the world will help offset slowing sales in the saturated
Also helping to fuel business jet sales will be continuing
dissatisfaction with scheduled airline travel, as well as the
popularity of fractional ownership and jet card programs that
enable easier access to private jet travel.