Frost & Sullivan: Bizav Sales To Rise 13.8% by 2020

A business aircraft forecast released today by analyst Frost & Sullivan predicts the market will be a $27.94 billion business in 2020, a 13.8-percent increase over the $24.55 billion in billings reported last year. “Charter, lease and fractional business models will be affected as companies look to reduce costs," said Frost & Sullivan aerospace and defense director Wayne Plucker. “As the economy stabilizes, the operating efficiency of innovative designs will push sales and pilot the global business aircraft market to new heights.”

While the global business aircraft market fell after the economic downturn in 2008 and was largely sustained by large-cabin jet sales, Plucker said the market is now showing “substantial signs of recovery” thanks to the midsize jet segment. According to the forecast, North America and Europe will remain the largest markets, even as Asia-Pacific, China, India and the Middle East become “significant” growth centers.

“Business aircraft manufacturers can finally profit from the demand that has intensified as businesses waited for an improvement in the economy,” said Plucker. “While the heavy aircraft segment will maintain production levels, the light aircraft market will experience a rapid growth in the near future.”

Global economic conditions continue to be the most notable challenge to the industry, the firm said. Though North American sales have improved, Frost & Sullivan noted that those in Europe are still “restrained.” It expects that European purchases, especially for midsize and large-cabin jets, will pick up as the economy improves and the need for replacements “rekindles consumer confidence.”

In Asia, “Unsuitable business models and government restrictions affect sale volumes, although booming economies should suggest strong growth,” the company said. “Social and governmental restrictions inhibit revenues in the Chinese market.”