Embraer sees indicators of a slow market recovery ahead
Embraer expects “a good recovery” from the recession, according to executive aviation market intelligence vice president Claudio Camelier.
At a recent press briefing, he commented that 24-month global stock market trends are “getting close to where they were in 2008” and that the number of billionaires has recovered from 2009’s near- 15-percent dip to 1,011 this year. He then contrasted the European billionaire population (up 33 percent from 2009) with that in Middle East and Africa (down 23 percent) and pointed out that the leader is Asia/Pacific (up 73 percent, which is 12 percent above its 2008 total).
Similarly, business jet traffic in Europe and the U.S. is increasing, he said, with early figures this year up 8.7 and 10.9 percent, respectively, after 20- to 30-percent dips in 2009. The overall U.S. market remains depressed, Camelier added, predicting it would be “a year or two” before activity in the two regions recovers to pre-recession levels.
Numbers of available good used aircraft, another key indicator, are “still a lot higher than historic levels,” he said, with March inventories comprising more than 2,700 units–almost 16 percent of the active fleet, or one aircraft in six.
Despite apparent early signs of recovery, it will be almost 10 years before returning demand for new business jet capacity will translate into higher overall annual market value, Camelier said. He predicted that 2008’s $22 billion worth of new deliveries would not be repeated until around 2018. For the period to 2019, total demand is valued at $190 billion, covering “more than 10,000” business jets, according to the Embraer analysis. This compares with $155 billion for 8,000 aircraft during 2000-09.
In the short term, Embraer sees a reduced number of deliveries this year, with the market essentially flat in 2011 before recovery starts thereafter. The Brazilian airframer estimates a global business jet market value of $24 billion in 2019.
China will be the most voracious market, according to Embraer, with demand growing at 11.1 percent each year, but accounting for just 3.5 percent of deliveries worth $6.7 billion. Asia/Pacific (excluding China) will grow 7.4 percent annually, it predicts, absorbing aircraft valued at $15.7 billion, or 8.2 percent of deliveries.
Demand in Africa, Europe, the Middle East, and Russia–one third of the market–will expand 2.2 percent each year and be worth $65.5 billion, according to the Embraer forecast. The outlook sees North America, including the Caribbean, representing half of global demand, increasing 4.7 percent annually and worth $91 billion, while Latin America, including Mexico, will grow at 5.5 percent to account for 6 percent of shipments valued at $11.4 billion.