In our last blog post, we took a look at some of the trends that could be seen by JETNET LLC, a leading provider of corporate aviation information and a member of the National Aircraft Resale Association, in its JETNET iQ Global Business Aviation Surveys. Today, we will look at the current business aircraft flight trends and the jet delivery forecast for the next decade.
JETNET iQ Fly/Buy Index
JETNET’s Fly/Buy Index provides a forward look at the intentions of aircraft owners and operators to purchase new aircraft and to change their overall levels of flight hour utilization. The JETNET iQ Fly/Buy Index is a composite measure of expected flight activity and new aircraft orders over the next 12 months. Based on responses to their Global Business Aviation Surveys, the JETNET iQ Fly/Buy Index was established at a value of 100 based on market conditions at the beginning of 2011. Index values above 100 indicate a growth in flying and ordering intentions over the levels anticipated by owners and operators in Q1 2011, when JETNET iQ surveys began. The Q3 2012 Index stood at 94.0, down 6 points from the Q1 2011 baseline value. On a regional basis, Index scores have fallen below the baseline in North America and Europe, but are stronger in all other world regions.
JETNET iQ Business Jet Delivery Forecast
In the 10-year period from 2012-2021, JETNET iQ forecasts that 10,424 new business jets will be delivered, with a total delivery value of $US 253 billion, based on 2012 dollars and equipped list prices. Unit deliveries are expected to be 699 in 2012 and 732 in 2013, up 3.7% and 8.1% respectively over 2011, which they believed to be the “trough” year in the current business aviation cycle.
Current market conditions aside, JETNET iQ forecasts a strong rebound in business aviation operations and demand over the next 10 years. Primary drivers of this resurgence include a return to economic growth, the increasing internationalization of business aircraft flight operations and customers, and fleet renewal among existing customers. Replacement demand, which has been stymied by reduced business and consumer confidence in the wake of the 2007/2008 economic recession, is expected to rebound, stimulated by aging aircraft issues and an excess of new aircraft coming onto the market. The largest volume of deliveries over the next 10 years will be in the Light Jet class, with 37% of delivery units accounting for about 9% of delivery value over the next 10 years. Medium Jets will account for 33% of delivery units and 27% of delivery value, and Large Jets about 30% of units and 64% of value. By region, North America (U.S. and Canada) is expected to take delivery of 49% of all business jets over the next 10 years, followed by Europe (19%), Asia Pacific (13%) and Latin America & Caribbean (11%).
JETNET iQ Business Jet Fleet Forecast
JETNET iQ forecasts that the business jet fleet will grow to 26,793 aircraft worldwide by the end of 2021, an increase of 45% over the 10-year forecast period. They expect about 2,100 jets to be retired or otherwise removed from service in this timeframe. North America (U.S. and Canada) will remain the predominant base for jet registrations, but will decline as a percentage of the world fleet as other regions increase their rate of intake of new and pre-owned aircraft. North America, which today accounts for about 63% of the world jet fleet, will represent about 58% of the fleet by the end of 2021. The fastest jet fleet growth will occur in Asia Pacific.
JETNET is currently compiling information from its 4Q 2012 survey respondents and will release results of this survey in late February.
For more information about JETNET and the company’s market research services, go to http://www.jetnet.com/.