Business aviation flight hours worldwide climbed by 4 percent in the second quarter of the year, according to the Q2 2016 Business Aviation Index released by maintenance support and financial services company Jet Support Services (JSSI). The index tracks business aircraft flight hours by region, industry and cabin type. According to the report, business aviation exhibited the typical uptick in activity over the first quarter but declined by 1.2 percent compared to last year’s second quarter, a drop that could be attributed to cautiousness about the presidential election next month. It could also indicate what the Chicago-based company describes as a “new normal” of modest but prudent business aviation usage.
“Businesses are using private jets in a disciplined manner today,” noted JSSI president and CEO Neil Book. “Q2 2016’s flight activity, while slightly up over last quarter and down from last year, reflects a flat U.S. economy.”
While usage by the healthcare sector was up by 17 percent quarter-over-quarter, that was largely cancelled out by retrenchment in other industries. “Over this quarter, oil prices rose to $48 from $38, but we saw a major slide in flight hours in the power and energy sector as many energy companies have taken cost-reduction measures to manage the significant decline in the price of oil over the last two years,” said Book.
Usage Stats
During the first quarter JSSI saw growth in Asia-Pacific, Europe, the Middle East and North America. Of the four, only North America backpedaled year-over-year. Europe and South America recorded growth year-over-year. According to JSSI, since 2013, flight hours for most of the regions have become more stable with the exception of Africa, which continues to decline after peaking in 2011. “With five consecutive years of declining average flight hours, the African market is showing little signs of recovery,” the report stated.
Overall, newer aircraft (zero to five years old) have seen a steady decline in average utilization over the last 20 quarters, JSSI noted, with several factors driving this trend: the breaking-in period for new owners necessitated by entry into service of new aircraft models, deliveries of new aircraft to emerging markets with lower utilization, and the immediate remarketing of newly delivered aircraft.
Older aircraft (six to 10, 11-15 and 15-plus years old) continue to see improvement from the lows of 2009, the result of broader availability of older aircraft on the resale market and depressed sales prices, JSSI determined.
Broken down by cabin size, only the small-cabin segment saw improvement in JSSI’s 2Q index, up more than 7 percent over this year’s first quarter and nearly 4 percent from a year ago.
“Flight hours in the large-cabin segment have seen a steady but gradual decline since Q2 of 2011, and after experiencing its lowest first quarter since 2009, Q2 saw more declines, hitting all-time lows in average flight hours,” said Book.