Deliveries of business jets will increase by 10% in 2019
Analysts and experts in general give a favorable outlook for the industry-class aircraft for 2019, linking the warming with the entry of new models of business jets to the market. However, a number of factors raise doubts that positive dynamics will be sustainable.
"This year, the number of deliveries of business jets may increase by 10% compared to 2018 due to the simultaneous entry to the market of several new models, such as the Gulfstream G500 and G600, Bombardier Global 7500 and Citation Longitude," says Brian Foley. consultant from Brian Foley Associates. - However, the sustainability of the upward cycle will be under increasing threat as the effect of novelty diminishes and gives way to economic realities."
In absolute terms, this would be about 705 aircraft this year.
However, he warned: "The duration of the climb will be in doubt, as the novelty of the new aircraft is dulled and economic reality sets in." And this growth will be far from the 1,300 aircraft delivered in 2008, although Fowley said this finest hour was unstable. But, he added, “something positive after almost a decade of“ flat ”supplies would be more than desirable.”
New models that are driving the market this year include the Gulfstream G500 and G600, the Bombardier Global 7500 and the Cessna Citation Longitude. “I feel that the year 2019 will be better than last year, since these jets will contribute to the growth of total supplies in the industry,” he noted.
But Brian Fowley warned that several factors cast doubt on the sustainability of this growth. These are, first of all, emerging markets, which once accounted for 40% of all deliveries of business jets and which today can only accept 15%. “This forces the North American region, mainly the United States, to control the market,” he said, adding that consumer sentiment and other indicators in the United States are declining, along with “increased talk of recession that looms somewhere around the corner.”
Another factor is depreciation. The new reality is that owners should expect that their new business jet will lose about 50% of its value within five years. "The market came to this after just 10 years ago it was not surprising that in five years the cost of the aircraft increased due to the simple economy of supply and demand." Today's active fleet has around 22,000 business jets worldwide, which provides more than enough supply, “which is currently causing private jets to depreciate, like other capital assets,” he concluded.