Since the economic slowdown in 2008, the global sales of business aircraft has been less than 50 percent of the annual sales in 2007; however, as aircraft fleets get older and the economy improves, pent-up demand may stimulate purchases.
New analysis from Frost & Sullivan's Global Business Aircraft Market finds the global market produced revenue of $19.28 billion in 2013 and estimates it will reach $25.74 billion in 2020. Asia-Pacific, China, India and the Middle East will witness significant growth, although North America and Europe will remain the largest markets.
"The operating efficiency of novel designs is driving the global business aircraft market," said Frost & Sullivan Aerospace and Defense Research Director Wayne Plucker." The procurement of large airframes, in particular, is at record levels and will continue to rise."
However, the adoption of medium and light jets has gone down as Europe and North America struggle to break the negative effect of the downturn. Economic stagnation and high costs have also decreased the number and extent of modification programs in these regions. Many aircraft may not return to service, while the modification projects that do take place are limited to the replacement of worn materials and compliance avionics, according to Plucker.
In addition, innovation in the global industry has taken a hit as consolidation activities gather momentum and competition weakens. Acquisitions and business failures have reduced the number of market participants, and the companies that remain are reluctant to take risks with new designs, according to Plucker. In fact, aircraft manufacturers are focusing on improving production rates, as their traditional metrics do not work well in the low end of the production spectrum.
"Meanwhile, service offerings have evolved into one of the more promising segments of the market," noted Plucker. "Operators and aircraft brokers that provide a host of aircraft management packages will be well-positioned for success in the global business aircraft market."
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