New Pilots

Bizjet Fleet To Grow by One-third, Retirement Wave Ahead

2015 11 18

JetNet is forecasting that the world business jet fleet will grow by 33 percent over the next 10 years, approaching 27,000 by 2024. But the industry data specialist also is anticipating a wave of retirements, with nearly 3,000 aircraft going out of service in that timeframe.

The business aviation market analysis specialist released its latest JetNet iQ market intelligence findings and long-term outlook here at NBAA 2015, predicting a market for 9,365 business aircraft worth $255 billion over the next decade. That is close to Honeywell’s latest 10-year forecast for 9,200 new business jets, but JetNet’s outlook includes personal jets, such as the single-engine Cirrus SF50 Vision.

The market analyst believes the emerging personal jet segment will account for 7.4 percent of the units delivered over the forecast period but just 0.5 percent of value. Long-range jets, meanwhile, are expected to account for 17.7 percent by volume and 40.2 percent of value. The fleet is anticipated to grow from 20,193 in 2014 to 26,774 by 2024, even with an expected 2,784 retirements.

Detailing its forecast, JetNet analysts also pointed to mixed indicators in the current market environment. Rolland Vincent, the director of JetNet iQ, noted the unprecedented corporate profitability, but said that is not translating into a full recovery of flight hours.

In fact, Vincent estimated that as many of 3,300 business jets are idle; many are believed to be older models suggesting there is a “retirement wave” ahead. Also, companies proportionately are spending less on business jets, he said, pointing to a “decoupling” of corporate profits and business aircraft sales.

Used sales are a leading indicator, Vincent noted, and inventories have returned to pre-recession levels. But pricing remains a top concern, both with used and new aircraft, as soft and aggressive pricing is lowering residual values. JetNet iQ surveys of 500 operators found that nearly 60 percent cited residual values in their decision to put off aircraft purchases in the past two years.

Nearly two-thirds of those surveyed believe the public image of the industry has improved, but more than 17 percent said they either somewhat or strongly agreed when asked if the public image of the industry has caused them to seek other forms of transportation. “We need to get our public image back on the right side,” Vincent said.