Global business jet market continues to be weak
The global business jet market continues to be weak amid an unusual, sustained cyclical trend which has affected demand levels for new business jets globally with the industry delivery volumes staying way below the pre-crisis levels on a routine basis with this becoming the new normal for industry, according to the “Global Business Jet Market – 2017-2026 – Market Dynamics, Competitive Landscape, OEM Strategies & Plans, Trends & Growth Opportunities, Market Outlook” report that can be downloaded here.
As stated in the report, the significant competitive pressures from used jet inventory, fastidious buying behavior from businesses and downturn in the global energy sector have been impacting demand for new jets as reflected in the order intake & book to bill ratios across most key industry OEMs over the recent years. The market, however, has shown signs of a slow movement towards stabilizing & recovery in 2017 with a spurt in activity level for the first half of the year despite continued pressure from the used jets market. The aircraft utilization levels across most operators & users, however, remain at a pretty good level, thereby, driving the requirements & revenues from aircraft service & aftermarket activity for the industry. Further, regulatory mandates, like the FAA's upcoming ADS-B requirement and aircraft upgrades are likely to drive the aircraft modernization & upgrade activity over near term translating into a fillip for the industry value chain.
At the same time, the industry OEMs, are taking a long term view of the market with continued pursuit of R&D activity focused on technological evolution and new aircraft development programs aimed at the long anticipated demand upturn. For instance, supersonic business jets; powered by the under development supersonic flight technologies meeting regulatory requirements; are likely to become a reality towards the early to mid-2020s, and are likely to alter the dynamics of business travel fundamentally while transforming the market landscape subsequently. Additionally, there has been a significant focus amongst the industry OEMs on trimming & ultra-efficient cost base management as mandated by the prevailing difficult market environment. The long term demand drivers & market fundamentals for business travel, however, remain intact, robust & firmly in place indicating towards sustained, steady demand growth for business jets over medium to long term.