Signs of growth lift the mood in business aviation
By Rohit Jaggi (Special Reports)
of FT.com aims to provide a dynamic barometer to a sector that has been described
as a bellwether for the health of the whole economy.
path to recovery, after the severe turbulence of the past months.
in early 2008, the mood of the sector was unabashedly upbeat, with aircraft orders, utilisation and expectations of continued growth all rising.
out-run. While the effects have been severe, though, they have not been uniform
across the industry. Indeed they have wrought a significant and lasting split
that has never before been seen in business aviation.
optimistic than they had been for a long time.
director at consultancy Ernst and Young. "The mood is definitely better than it
body for Europe, in May pointed to a rise in aircraft movements at the start of
this year, after steep falls in 2009. Business aviation traffic was up 11% in March compared with the same month last
year. That compares with a fall of 14% in 2009 as a whole from the year before.
hours are coming back pretty well," says Richard Aboulafia, vice-president for
analysis at the Teal Group consultancy. "Utilisation is still below the peak of
December 2007-January 2008. But at one point it was 30 per cent off."
he says. "Now we’re hearing that the top sector is, if anything, growing. Dassault
actually grew production in 2009.
business jets than any other single manufacturer, is an example of the pain that
the sector suffered. It cut its workforce by half as new orders plummeted and
existing orders were cancelled. It was also forced to shelve plans for the Columbus,
a long-range, large cabin jet that would have given it an additional model at
the top end to help stop customers moving up and beyond its product range.
in the market. "After the severe market contraction of the past two years, we
are beginning to see customer interest picking up again," he says. "The problems
still facing many economies mean the recovery will be slow and fragile, and we
only expect that process to really begin in 2011. However, potential customers
are back talking to us, which gives us grounds for cautious optimism."
downturn have also helped reinforce another trend.
company TAG Aviation, started in the industry "four economic cycles ago".
Now, the rest of the world accounts for more than half – and rising.
and we are finding pockets of interest in Europe, the Americas and Middle East,
although a clear pattern has yet to emerge.
growth in sales and we have upped our product development spend to prepare for
that demand when it comes."
fits into the entry-level or very-light-jet category.
extravagant claims made at the height of the bull market.
light jets [were] oversold. I said the market was good for a couple of hundred
a year, but no more."
would-be air taxi operators, many of which have either gone under or never actually
got off the ground.
– I aimed too high."
US, the focus is on the other side of the Atlantic. Many still hope air taxis
will prove to be successful in Europe.
jets on order. But partly as a result, he says, the market for entry-level jets
is "the most fragile of all".
the market froth has been blown away. Orders for the $80m ( £54m, €65m) aircraft
are still there, but the management team is also still looking for a manufacturer.
first – courtesy of French plans to make an example capable of at least high-speed
but still more rapid than for aviation as a whole. It predicts that the market
share of business aviation in Europe will recover from 6.9 per cent in 2009 to
pass 8 per cent around 2015.
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