Fleet will grow 33 per cent over the coming decade
Ten-year projection points to new business cycle, improved absorption rates of pre-owned aircraft and predicts the trend for widebody aircraft will continue
Jetcraft, the leader in business aircraft sales, marketing and ownership strategies, today released its third annual 10-year business aviation market forecast. The global business aviation installed base of just more than 21,000 aircraft will surpass the 28,000 unit mark (net retirements) in 2026, growing 33 per cent during the forecast period.
Jetcraft’s 2017 forecast calls for 8,349 unit deliveries representing $252bn in revenues (based on 2017 pricing) to be realized by 2026. North America will again lead the way with 62 per cent (5,176 units) marketshare of unit deliveries, followed by Europe with 17% and Asia with 12 per cent (1,420 units and 1,002 units, respectively).
“Pinpointing the transition into a new business cycle is challenging,” said Jetcraft’s Chairman Jahid Fazal-Karim. “Our forecast indicates we are finally exiting the post-2008 recession period, entering several years of steadier, healthier growth and expanding revenues. This new business cycle should shape our industry for years to come.”
Pre-Owned Market Pace Improves
If market assumptions established over the previous business cycle remain, absorption rates in the pre-owned market will shorten over the forecast period. This trend characterizes a healthy pre-owned market across all aircraft categories, with significant improvement in the Large aircraft segment. Furthermore, absorption rates for pre-owned aircraft should shorten during a period of important new program releases during the coming years.
Larger Aircraft Preference, Substantially More Revenues
Through 2026, our forecast projects significantly more revenue, peaking at $31.4bn in 2025. This trend is despite limited incremental growth from a unit delivery perspective, as demand continues to shift more toward widebody models at the expense of narrowbodies. The Large jet category will constitute 31 per cent (2,589 units) of the total unit delivery forecast, accounting for more than 63 per cent of total revenue.
“Large aircraft will drive a higher-revenue market in the coming decade,” said Jetcraft President Chad Anderson. “Jetcraft’s experience reinforces this trend, as we’ve seen more and more customers preferring larger, long-range aircraft to support their needs in today’s global business environment.”
Over the past decade, the average aircraft list price increased by 56 per cent. The forecast sees that number growing by an additional 16 per cent by 2026, as 98 per cent of the forecasted revenues from new programs are for widebody models such as the Hemisphere, Global 7000, and Gulfstream 500 and 600.
Other Key Forecast Findings and Observations Include:
- Bombardier will re-acquire the highest revenue market share over the forecast period, with 29.2 per cent.
- Cessna maintains the top position for unit deliveries, at 27.3 per cent.
- For UHNWIs, wealth creation prospects will continue to grow, especially in Asia, further affecting the business aviation market.
- Transaction bandwidth from public companies should see an uptick when their current focus on share buybacks recedes and they turn their attention to capital expenditures.