JetNet Forecasts Uptick in Business Aviation Industry
The global business aviation industry is anticipating a modest increase in flight utilization, according to statistics released by data tracker JetNet at its second annual iQ Summit in New York City recently. The Utica, N.Y.-based company conducts quarterly surveys through its JetNet iQ product, which it uses to gather information about the current state of the business aviation market and predict future trends.
Based on the results of its most recent quarterly survey of bizav operators in more than 50 countries, the company foresees nearly 5-percent growth in flight hours worldwide over the next year and a 7-percent increase the following year. Half of the respondents in the survey believe that the industry is currently at the low point in the business cycle, while approximately 24 percent say business aviation has yet to reach bottom. Those pessimists are countered by the remaining 26 percent who believe the industry is on an upswing.
Acquisition Plans on Hold
In its surveys JetNet asks operators about their intent to purchase new aircraft. Of the respondents in this latest survey, 36 percent reported that they have delayed the purchase of a new business aircraft since the start of the economic downturn in 2008. Uncertainty about the economy or regulatory environment was among the top reasons for the delay; nearly 5 percent mentioned perceived unfavorable public opinion toward business aviation as a factor in their decision to delay their purchase.
When the company asked its respondents who indicated a strong probability of their buying a new business jet what size jet they were considering, the results bode well for the suffering small jet category. Of those who indicated a better than 60 percent chance they would buy a jet within the next 12 months, only 4 percent indicated that their purchase would be a light jet; however, of those who said they would buy a jet within the one- to five-year time frame, more than 27 percent said they would be interested in a light jet.
At the event, JetNet also released some long-range prognostications regarding the global business aviation market. Based on the link between regional gross domestic product (GDP) and the percentage of the world’s business jet fleet, the company predicts that by 2021, North America and Europe will each claim approximately only 25 percent of the world’s GDP, down from 31 percent and 34 percent, respectively, in 2001, while Asia and Oceania will grow from approximately 23 percent to nearly 33 percent in that same period, becoming the largest of the three regional economies. As a result, the company sees changes in the regional weighting of the world’s business jet fleet, which is expected to total more than 27,000 by 2021, an increase of 47 percent over the end of 2011. North America is predicted to drop from more than 70 percent of the global private jet fleet to less than 60 percent; Asia’s share of the market will double to account for nearly 10 percent of all registered business jets. Bucking the trend, while Europe’s share of global GDP is expected to decline, its percentage of ownership in the business jet fleet is predicted to rise from just under 10 percent in 2001 to approximately 18 percent by 2021. “I would almost define Europe in some ways as still discovering business aviation,” said Rolland Vincent, Jetnet iQ’s director, “[The markets in] some countries are mature, such as Germany and the UK, but there’s still a lot of growth potential. There is a lot of wealth there and they don’t buy pre-owned airplanes.”