Corporate jet makers eye revival led by North America
By Cyril Altmeyer
GENEVA May 21 (Reuters) - Business jet makers, hit badly by the financial crisis, expect an upturn in mature economies such as the United States will encourage companies to once again buy new corporate planes or replace ageing jets, executives said this week.
Many companies in North America and Europe, from carmakers to banks and tech firms, scaled back usage or sold their corporate jets in a bid to cut costs, resulting in a 50 percent drop in deliveries of business jets between 2008 and 2010.
The market for business jets, whose key players include Bombardier, Textron's Cessna, Dassault and Embraer, was worth $22.34 billion in 2014. IHS Aerospace, Defence & Security forecasts this will increase 10 percent to $24.61 billion by 2018 thanks to a recovery in North America and Europe.
Market growth is expected to be driven by demand for smaller jets costing anywhere from a couple of million dollars up to around $26 million, IHS predicts.
"For a lot of businesses, a small corporate jet doesn't cost that much and isn't a particularly bad investment when you look at the cost of first-class tickets," Ben Moores, IHS senior analyst, told Reuters.
Bombardier, in its latest 10-year market forecast unveiled at the EBACE business aviation show in Geneva, forecast 9,000 business aircraft valued at $267 billion would be delivered over the next 10 years. Of that, about 3,400 will be jets in the light category.
In North America, the largest market by some way at over 40 percent of deliveries, fleets are expected to grow by an average of 2 percent a year, Bombardier predicts, tracking average annual economic growth of 2.6 percent.
"The North American market is clearly leading the way," Larry Flynn, president of General Dynamics-owned Gulfstream , told Reuters on the sidelines of the EBACE show. "We see people replacing their fleet, getting newer airplanes". Continued...