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Business Jet Industry Will Weather the Storm, But How Much Longer?
Business aircraft manufacturers such as Bombardier, Cessna, Dassault,
Gulfstream and Raytheon, suffered through a second consecutive
year of slumping deliveries, leading to production rate cuts and
substantial employee furloughs by many firms, according to The
World Market for Business Jet Aircraft 2003-2012, a report written
by Raymond Jaworoski, senior analyst with Newtown, Connecticut-based
Forecast International.
The fortunes of the business aircraft industry ride almost in
direct proportion to leading economic indicators. Flat or sinking
corporate profits, coupled with shareholder wrath over top management
scandals, are causing many firms to shy away from high-profile
business aircraft acquisitions. In addition, fuel price hikes,
airport access restrictions and local noise curfews have hurt
the business aircraft market. Looming tax proposals and possible
regulatory hassles also discourage market growth.
The growth of fractional ownership, the darling of the high flying
firms of the 1990s boom times, has slowed to a fraction of its
former pace, leading many to cancel or defer new aircraft orders.
Long-term, though, Jaworoski is optimistic about industry prospects
during the next ten years. And the business jet industry is well
poised to weather the storm in the short term, in large part because
many key business travelers are fed up with airline travel. They're
sick of wasting time in airports in an era when it's essential
to optimize productivity.
Capitalizing on this sentiment, business aircraft makers are developing
a new generation of jets to satisfy the needs of business travelers
for speed, comfort and efficiency. These range from Cessna's entry-level
Mustang, the Eclipse 500 and possibly the Sino Swearingen SJ30-2,
through Citation CJ3, Learjet 40 and Gulfstream G150, along with
several Gulfstream G-IVSP and G-V derivatives, Bombardier G5000
and Dassault Falcon 7X.
The result? Jaworoski estimates that 9,769 bizjets, with a retail
value of more than $135 billion will be delivered between 2003
and 2012. That's nearly double the number of business jets built
during the previous ten-year period.
By Fred George
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