Industry experts provided insights into the current state and future prospects of business aviation during a panel discussion at NBAA-BACE in Las Vegas on Monday.
Sheila Kahyaoglu of Jefferies expressed some doubts about a forecast from Honeywell indicating an average annual growth rate of 2 percent. “We only have our forecast out for 2026,” she said, adding that they consider the growth of the five major bizjet OEMs. Their business jet models take into account used jet inventories, as well as insights from companies and business jet management teams.
“We do it on a per-model basis. We find that we're most accurate when we look at it that way,” she said.
Kahyaoglu described their perspective on business jets as “a little bit more subdued” when considering the coming few years.
Jefferies’ 2024 forecast is only 5 percent above 2019 levels, she noted, and these levels are roughly equivalent to those in 2013. “The industry has not really grown over the last decade, but the market obviously has doubled since that point.”
The company expects the market to be robust over the next three years or so—primarily because the supply chain is sustaining current levels of demand, Kahyaoglu remarked. “We are hesitant on the long-term growth. I don’t know if 2 percent is right.”
Ron Epstein of Bank of America Global Research for Aerospace & Defense commented on the current supply-chain difficulties and particularly those in the engine market. “There’s going to be more pent-up demand for aircraft for a longer time, and that’s actually good. We’re going to have a ramp-up that’s more controlled.”
He shared that his group is also considering that the industry was “basically dead until 2018, then started to have a real recovery.” There were ups and downs that came with the pandemic, but now the industry is normalizing back to where it was in 2018.
“Fractional programs are a much bigger share than they used to be,” Epstein said. “I’m expecting to see that trend down over time, partly due to Covid distortions.”
He also expressed excitement about the new technologies on display this week at NBAA-BACE, including advanced air mobility and electric propulsion. “Some of the most advanced technology, like cockpits and engines, a lot of it started here.”
“Why doesn’t this industry grow faster?” Rollie Vincent of Rolland Vincent Associates asked. “Generally speaking, we don't grow at the rate we could. Long-term, our forecasts have a growth of around 2 percent CAGR.”
He noted that the complexity of the industry creates a wide variety of different job types. However, there’s an urgent need to bring in more talent and diversity.
JetNet predicts roughly 775 jet deliveries this year, compared to a little over 800 in 2019. “We’re back to pre-pandemic,” Vincent said. “The pandemic was the great accelerator for this industry.”