22.09.2019

How private jet market would decline in near future

Business jet deliveries all over the world have their own cycles, lust like the economy. After 2008 financial crisis there was a significant decrease in shipments, from 1,300 to under 700. It was a serious drop, but it could be worse. 

Business jet industry is not a mass-market, so every delivery of the jet is counted. There are 5 main players on the market - Bombardier, Textron Aviation’s Cessna, Dassault Falcon, Embraer and General Dynamics’ Gulfstream - as well as another 5 players, in their own niche. 

After the crisis in 2008, thing could have been much worse, but emerging markets saved the producers. Developed countries have much more demand for this products, but they suffered more from the crisis, while emerging markets represented much smaller total market demand, but they helped to keep the lights on. Moreover, the locations of this regions, which are quite remote, made the most expensive jets to be build for them, to meet all the requirements of the comfort and range.

Nowadays there are weak situations on the markets of Brazil and Argentina because of oil prices, Russia is under sanctions, China is suffering from market wars with USA, and there is a number of reasons in Saudi Arabia, due to corruption crackdown.

Now, there is no region in the world that can sustain current jet delivery level, so the market will decline again. U.S. economic slowdown is forecasted in a 1-2 years. The next industry decline is predicted at 10-20% percent, which is lower than typical 30% decline, as the deliveries were quite flat for the period. 700-unit deliveries would probably go down to 500-600 per years, making a competition on the overcrowded market more tough.

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