AINsight: Bizav OEMs Jolly in 2019

 - December 26, 2019, 10:01 PM

Looking for that special holiday gift that will make that special person in your life delighted, connected, and forever in your debt? There is still time to surprise with a shiny new offering that ticks all the boxes–and that will be long regarded as the ultimate addition to even the most discerning person’s toolbox.

With more than 50 models to choose from in a variety of shapes, sizes, and performance packages, a new business aircraft is the clear choice for the season–although we certainly recommend both a very large Christmas tree and getting the manufacturer to take care of the wrapping and delivery to your front door.

The year 2019 has been a very good year for most business aircraft manufacturers, with strong customer interest in some of the latest offerings that have been recently certified and introduced into service. To their immense credit, many original equipment manufacturers (OEMs) wisely decided to invest in all-new and substantially upgraded models over the past several years—ones that were marked with relatively flat demand over an extended post-2008 period in the aftermath of the worst financial crisis our economies have faced since the Great Depression.

Customer interest is reflecting in sales contracts for new aircraft that collectively drove up the industry’s firm order backlog for the first time in 10 years. Although the year-end numbers are yet to be finalized and reported, it looks like total backlog value will finish 2019 up by as much as 10 percent year-over-year. Impressively, each of the major OEMs has been active in understanding their customer needs and requirements and, working with their supplier partners, translating these into hardware and related services.

With the product-development realities of modern aerospace, the timeline from concept to reality (from the earliest stages of product conceptualization to having an active and productive production, completions, delivery, training, and service/support network in place) is long enough for even Santa to consider engaging wave after wave of highly-paid consultants to examine and re-imagine end-to-end elf factory productivity.

While the holiday season is a special time to be reminded of the many blessings and joys of family, OEMs who have continuously invested in their own families of products and services are experiencing good times and all of the benefits that come from delivering value to their loyal customers. With business aircraft purchases remaining an infrequent event for all but a few business aircraft shoppers, the loyalty factor–measured by, say, the proportion of existing customers who would recommend their chosen aircraft or brand to a friend, or who intend to purchase another model in the chosen OEM’s family–is truly at work separating the highest performers from the others in our industry.

In keeping with the spirit of the season and in interests of kindness and camaraderie, we will not speculate or (heaven forbid) even pontificate on who amongst the OEMs may be on Santa’s naughty and nice lists this Christmas season. For that, please call or email in early January.

Convincing someone to purchase their first aircraft from a particular OEM can truly begin a lifelong and mutually rewarding customer/supplier relationship. OEMs that have been in the business of business aviation for many years have some natural advantages in this situation, particularly those with a broad family of entry-level products that might be the first airplane that a future customer ever experienced first-hand. While Piper and Cessna and their piston and entry-level turbine models might immediately come to mind, other OEMs facing high barriers to entry have also succeeded in this space in more recent years, including Cirrus, Daher, Pilatus, and Embraer in particular.

In what is today a global yet still quite tiny industry (with relatively few customers measured in the tens of thousands), an OEM’s ability to identify, build, and nurture its own trusted customer base and supplier partnerships should be near the very top of any list of their strategic core competencies. Sadly, at least in our view, this is too rarely isolated as such in an industry where the shiny new aircraft commands that attention—an understandable but product-centric view of what makes things tick in our industry.

Our industry continues to keep customers at the absolute center of what we do. On this journey, business aircraft manufacturers are uniquely positioned to lead us all forward, building on the successes of what has been for many a good year in 2019. 

With January 1 looming, might you find renewed inspiration, energy, and enthusiasm for the work that you do, helping in your own way to bring people together with the finest air travel tools yet created for the most demanding customers.