Story ID: 040NewJets2016AINNov16EditedByAY_NM
New Business Jets 2016
By: Mark Huber
Caption: Splitting the eye of the niche in a lackluster market
Word Count: 391
The new business jet market used to be predictable. You could correlate rising sales to readily recognizable economic benchmarks such as country gross domestic products and the proliferation of ultra-wealthy people. But those predictors are no longer of particular use. For those schooled in traditional sales and marketing, the new reality must be especially discombobulating, akin to the awful feeling a pilot gets when he looks at his instruments and realizes that they are wrong. The number of billionaires in the world has doubled since 2008, the stock market continues to bump into record territory and Asian GDP is ripping along. Yet sales of new jets are on track to be less than half what they were in 2008 and the used jet market continues to suffer from bloat, with one in four of the offerings less than 10 years old.

During the first half of the year, a mere 288 new jets were delivered, and the consensus is that the flat delivery numbers of the last few years could continue for another four to five years. The current new jet sales market is challenging, and competition is intense. In this environment, OEMs are looking to create any market advantage, any new product niche, they possibly can. Many of the new product offerings reflect this in terms of new technology, longer maintenance intervals, better warranties and overall product support, or more mission flexibility all the way along the food chain, from the Airbus ACJ320neo to the Eclipse Canada. OEMs realize that in the current market the case for new aircraft acquisition must be made across multiple parameters. The term “game changer” is going to be heavily overused in the next few years. New aircraft coming to market that truly fit that description should do well.

Still, compelling product alone might not be enough to restore the robustness the business jet market enjoyed in the past. Embraer Executive Jets CEO Marco Tulio Pellegrini is pushing an initiative intended to create non-traditional markets for his company’s aircraft. The “premium transportation” plan is designed to move professionals off the airlines and into light jets serving select city pairs and to get leasing companies more involved in business jets. Pellegrini believes it is not merely enough for companies to sell technology; they must also educate consumers about how to use it.