While business aviation usage in North America continues to creep up and some domestic service providers report business approaching or even exceeding 2007 levels over the past year, that hasn’t held true for the rest of the world, for a variety of reasons.
According to FAA statistics, while U.S.-registered business jet operations grew by just over 1 percent between 2014 and 2015, that improvement came entirely at the expense of international operations. In 2014 the industry recorded a year-over-year rise of 4.57 percent in international flights at a total of 708,872, but that number fell by 3.31 percent last year, to 685,398.
“The traffic out of North America has been down a little bit in terms of legs flown, and I think that’s really reflecting what’s been going on in the U.S. and global economies,” said Jonathan Howells, senior vice president international with Universal Aviation, Universal Weather and Aviation’s ground handling subsidiary. “We feel there is a lot of pent-up travel waiting to happen.”
Oil Giveth, Oil Taketh Away
Looming heavily over the global economy is the price of oil, which has lingered below $50 per barrel for far longer than anyone in the petroleum industry could have imagined. “Of course it’s a paradox: it’s good for the industry in some ways, [and] it’s not good for the industry in other ways,” Howells told AIN. “Right now fuel pricing has been greatly advantaged by what’s going on with oil pricing, but a lot of the business aviation economy and community is driven by oil-dependent and oil-producing countries and also some of the large corporate aviation departments around the oil industry, so oil price has a distinct impact on our industry.”
“In areas where the economy relies heavily on resources, for example mines, oil and so on, the business has slowed down quite a lot in movement through our FBOs,” said Gerrit Basson, CEO of ExecuJet Aviation Group. “For example, we used to be much busier through our two FBOs in South Africa and the one in Nigeria than we are at the moment because a lot of the traffic was driven by internationals and resource companies traveling through Africa to all of their assets.”
The strong U.S. dollar is another factor affecting operators outside North America, said industry analyst Brian Foley. “Usually fuel is based on dollars too, and with a lot of foreign currencies not too strong right now, that can be a disincentive to fly more,” he said, pointing out that even though the cost has declined significantly, it hasn’t dropped as much as it has in the U.S., with its stronger currency.