Bizav’s Slow Climb Predicted To Continue in 2014
Recent predictions by industry soothsayers show business aviation continuing its slow climb next year. “GDP is up, U.S. stock markets and corporate profits are setting new records and pre-owned inventory has declined, with aircraft prices now bouncing along the bottom,” aviation consultant Brian Foley told AIN. “These positive indicators are expected to continue in 2014.” The result is that “FBO, MRO, charter, catering and fractional companies will continue to benefit from a slowly rising business jet utilization rate,” he said.
Adam Twidell, CEO and founder of UK-based PrivateFly, a booking service for private jet charter, sees “more tentative steps toward recovery” amid the still challenging economic climate. “Flight volumes in Europe were down 2.7 percent year-to-date,” he said. “The market is going to be tough in 2014, but I do think some optimism is justified.” At October’s NBAA Convention, Avinode Business Intelligence released a forecast that predicts a 0.9-percent decline in business aviation activity in Europe for next year compared to 2013.
Meanwhile, Foley pointed to improved piston and turboprop deliveries in the U.S. as being a likely “harbinger to imminent improved small and midsize jet deliveries, although these won’t manifest themselves until later in 2014.” Catalysts will be “pent-up demand, continued worsening of the airline experience and the incentive to lock in low interest rates before the Fed’s tapering causes rates to rise. This [increased demand for small and midsize jets] will be perfect timing, as the large-cabin segment takes a bit of a breather,” he said.
Foley estimates that total business jet deliveries this year will be close to 2012’s 672 aircraft and that next year will see as many as 755 jets delivered, a 12-percent increase. “2014 will be the year the industry lets go of the notion of ‘how things used to be’ and realizes that things may not be so bad after all,” he predicted.