Confidence was high yesterday at the Corporate Jet Investor (CJI) London conference, driven by the strength of ultra-long-range business jets such as the Bombardier Global family and Gulfstream G650. Aircraft brokers told delegates that 2018 was a bumper year for preowned business jets, while they don't expect the raft of new models to dampen the preowned market. However, some, including Jay Mesinger of Mesinger Jet Sales, admitted that finding good preowned aircraft has become more challenging.
Bombardier Business Aircraft president David Coleal gave the opening address. Setting the scene, he noted business aviation was on a high and that Bombardier is preparing for growth, while underlining the company's commitment to the environment, especially biofuel.
Meanwhile, Pascal Bachmann of Jetcraft said 2018 was the company’s “best year ever” as it notched sales of more than 100 aircraft for the first time. “We expect the market to continue in the same fashion," he said. “One-third of total deliveries [going forward] will be long-range aircraft." This third, Bachmann noted, will account for 60 percent of manufacturers' revenues.
Possible brakes on the industry included the strong dollar and shortages of skilled workers, a challenge Stephen Friedrich, Embraer chief commercial officer, highlighted.
Asked if Embraer would enter the popular ultra-long-range aircraft market he said the segment was “very well serviced" and that the Brazilian OEM was focused on, and “very comfortable” with, the super-midsize market. On the economy, Friedrich noted questions about monetary policy, foreign exchange rates, which “affect global demand,” and “how long fiscal stimulus will last.”
Jim Simpson of First Republic Bank said the robust year was the result of a “confluence of factors: the equity markets were strong, hedge funds strong, and real estate has done well.” He added he did not believe the 100-percent depreciation tax writedown in the U.S. was driving sales as much as people assumed, with many being cautious about claiming it.
Others reporting a healthy 2018 included Dave Labrozzi of Global Jet Capital, which had “a really strong year; we came into 2019 with one of the strongest backlogs I’ve seen in my career,” and Tim Obitts, COO of the National Air Transport Association. “2018 was a great year for our members,” he said, adding that despite the government shutdown in the U.S., the FAA would be “back to normal.” Jonah Adler, chief revenue officer of JetEdge, said 2019 had started well in charter but economic and political uncertainties have “got us spooked.”
Mike Dwyer, managing partner of GuardianJet, described 2018 ultra-long-range aircraft deal activity as "boom time" with 110 sales in 2016, 139 in 2017, and 165 in 2018, while the number of brokers transacting deals increased as well, to 37. He also noted that the U.S. consumed 72 percent of aircraft built, a new high, and questioned, "Are we really a global market?"