Large-cabin business jet demand could drop 20 percent later this year as a result of the Covid-19 pandemic, while the light and midsize segments could “hit a new low,” according to Teal Group v-p of analysis Richard Aboulafia. “Watch fuel prices—resource-rich countries and energy-extraction companies drive large-cabin demand, so that segment will likely be hit the hardest,” he said. “Large cabins are clearly in very dangerous territory. All of the market indicators are either orange or red.”
Aboulafia expects the light and midsize business jet segments to be down only modestly from current demand since they never really recovered from 2008. “For the past decade I've argued that we're not at risk of a small-/medium-cabin downturn, because we never had any kind of sustained post-2009 recovery,” he told AIN. “We're about to see if I was right. I'm starting to suspect that I was not right.”
Meanwhile, the anecdotal upsurge in private aviation demand “whenever something bad happens to airlines [pandemic or terror]…has never proven to be sustainable,” Aboulafia added. “In fact, business jet demand gets clobbered by crashing equities markets and corporate profits.”
As far as manufacturers, "Bombardier looks uniquely vulnerable in the business jet industry," he said. "They’re overwhelmingly reliant on high-end jets, with no exposure to defense markets. Two months ago, this wasn’t a problem, but it now looks bad."