GJC: Industry Remains Strong Despite Economic Concerns

 - August 24, 2022, 1:33 PM
Embraer's 2:1 book-to-bill contributed to the business jet industry's 1.8:1 book-to-bill and a $46 billion backlog. (Photo: Embraer)

Persistent inflation and rising interest rates have raised concerns but strong industry backlogs, new and returning business aviation users, and healthy business jet trends are steering the industry through the economic uncertainties, according to the latest Global Jet Capital (GJC) report.

Released today, GJC’s Business Aviation Market Update covering the second quarter noted that new users have entered the business aviation market while established users are returning. The culmination of these movements is a 20 percent year-over-year jump in flight operations in the second quarter. 

At the same time, orders continue to surge, leading to book-to-bill ratios of 1.8:1 in the second quarter, the business aviation financing specialist added in the report.  “With backlogs of $46 billion, OEMs have substantial cushion against any potential downturn.”

Also, business jet transactions are up by 14 percent in dollar volume in the first half, compared with the same period in 2021.

Inventory levels inched up in the second quarter but remain well below historic values, GJC further noted, adding used aircraft values tracked by sales data companies are increasing.

“Challenges to the broader economy mounted during Q2, including inflation, rising interest rates, and economic contraction in some countries,” GJC said. “However, strengths in the business jet market, including high OEM backlogs and demand from new and returning users, have increased its resilience against a future downturn.”