EBACE Convention News

Business aviation industry is less dependent on U.S.

 - May 21, 2008, 11:42 AM

Ask former Bombardier Aerospace senior vice president for worldwide sales Jahid Fazal-Karim about the current state of the business aviation market and you’re likely to get a lesson in geography as well. Fazal-Karim, who this week became the managing director of aircraft sales and acquisition company Jetcraft Trading, said the business is increasingly becoming less U.S.-centric.

“The world is much more global now, and there is less dependence on the U.S. market,” he told EBACE Convention News.  “The business aircraft market has stabilized in the U.S., but in emerging markets such as China, India and Russia it is growing.” Europe is also contributing to the growth of business aviation, though Fazal-Karim attributed this to the former Soviet bloc countries and Russia, not the more mature states like the UK and France.

While the U.S. economy continues to wobble, he said there is no such slowdown occurring in the emerging markets. In Europe, which Fazal-Karim described as “diverse,” the aircraft charter business is primarily driving business jet sales. Despite the fact that NetJets Europe is growing, “Fractional programs in Europe are hard,” he said, noting that the region is composed of “several countries with a patchwork of tax laws.”

Fazal-Karim said the business aviation market in China could literally skyrocket at some point because the Asian country has the biggest spread between gross domestic product (GDP) growth and private aircraft sales. Business jet sales typically follow GDP growth, but government regulations and little general aviation infrastructure in China have kept this from happening. If more general aviation reliever airports and FBOs pop up in China and/or government aviation rules are relaxed, bizjet demand could finally catch up with the country’s roaring economy, he said.

Though most eyes are on Eastern Europe and Asia these days, Fazal-Karim believes a potentially good business aviation market exists in South America, especially in Brazil. “The currency in Brazil is much stronger and the country is much less of a credit risk than it was just ten years ago,” he noted.