Which way now? This is the question beckoning business jet manufacturers as 2012 unveiled yet another year of stagnant growth in aircraft sales. Annual sales figures from last year suggest a flat result over 2011, with an aggregate 675 jet deliveries – barely half the number sold five years ago. However, despite the slump in demand attributed to the current economic downturn, the business jet industry is seeing something of a resurgence with the limelight focused firmly on emerging markets.
Strong growth and ensuing maturation of the aviation industries across India, China, the Middle East and Latin America has whet the appetite for executive jet travel, with manufacturers responding accordingly. As emerging economies capture a further 20 percent of the market share held over the past ten years, this would appear to be driving the commercial focus further away from the traditional markets of Europe and North America. Perhaps nowhere has the shift been more profound than China. Manufactures including Gulfstream, Beechcraft, Bombardier, Cessna and the later entrant – Embraer, have all sought the untapped potential in the country’s rising business aviation sector by shaping a marketing presence through airshow exhibitions, joint collaboration and the proposal for service centre construction.
Over the course of the next 20 years, North America is expected to receive 9,500 business jet deliveries, with 3,920 to Europe and 2,420 reaching China alone
Over the course of the next 20 years, North America is expected to receive 9,500 business jet deliveries, with 3,920 to Europe and 2,420 reaching China alone. Current fleet numbers in China (inc. outlying territories) are modest at a little over 330, but the current backlog of orders and enormous 40 percent growth last year mandate further interest from manufacturers. Further afield, expansion plans and an increasing drive for fleet replacement over the next ten years are likely to see a broadening of the business jet fleets in other emerging markets, including some 525 jets for the CIS, 325 in Africa, as well as 410 in the Middle East and 925 in Latin America.
Zilvinas Sadauskas, the CEO of Locatory.com, states that, ‘The Asia Pacific region itself is poised for a burgeoning expansion, with recent forecasts by Embraer suggesting that by 2021 the region will have between 1,363 and 1,690 business aircraft valued at 40-48 billion dollars. India represents another focal point, predicted to capture somewhere between 390 and 485 – a market share of $10-12 billion – of the total business jets forecast for the region. Underlying this demand will be a growing economy, an increasing number of high net worth individuals, rising corporate revenues and a greater need to save time connecting outreach communities.’
On the basis of current demand trends, higher-end business aircraft appear to dominate overall sales in the Asia-Pacific region. In the case of China, Gulfstream registered sales of 36 jets over the past 12 months, followed closely by Bombardier, having delivered 31 Challenger and Global Express aircraft. Conversely, sales for Cessna corporate jets and Bombardier’s Learjet family offerings have failed to take off in the region, with little net growth in fleet numbers in the region evident for last year.
Z. Sadauskas, Locatory.com CEO, comments, ‘Yes, it is very easy to spread forth the wealth of opportunities the region offers for business aviation. However, curtailing the industry’s growth in the two tiger markets – China and India, are likely to be a handful of distinct but equally pressing issues. Inadequate infrastructure, punitive regulatory barriers and the lack of a solid policy framework are all things that characterise the industry in India. Add to this the curfews on private air services at major airports and the exorbitant duties applied to the importation of aircraft and aircraft parts and, well, it makes it increasingly difficult to do business there.’
Adding further, ‘On the other hand, for China the problem surrounds the limited access to low-altitude airspace as well as the current shortage of qualified air traffic controllers the country is facing. Taken together, this makes executive jet travel a considerably less practical form of getting around. Nevertheless, both India and China have the capacity to harness a positive outcome for the sector – as already witnessed with plans for aircraft service centres to be established in the upcoming few years. But given an influx of new jets, regardless of the market, there are likely to be supply issues for spare parts over the interim period. Business jet operators may go a long way in bypassing such a dilemma by taking advantage of e-procurement platforms, which have already measured considerable success for air operators both big and small.’
