Editorial: A lot of proof and a little faith
Business jet sales continue to impress
March 28, 2008 By Stacy Bradshaw
Last year, aircraft manufacturers shipped a record 1,138 business jets worldwide – an increase of 28 per cent over 2006. Over the last three years, the industry has seen an overall increase of more than 50 per cent, rivaling the kind of growth that was seen in the late 1990s.
In total dollars, billings for these aircraft last year came to US$19.43 billion, representing a 17 per cent increase over 2006.
While we’ve yet to see the full impact of VLJs and PLJs, it is noteworthy that Eclipse alone was responsible for selling 98 new aircraft in the VLJ category, while Cessna sold 45 of its Citation Mustangs in the same category.
Bombardier delivered 226 business jets with industry-leading total billings of $5.2 billion, while Gulfstream billed $4.83 billion, Cessna $3.91 billion and Dassault $2.32 billion. Cessna sold more units than anyone else with 1,274 business jets delivered during the year.
The market continues to be diverse. The main driver for the upsurge in sales is still the continuing economic growth in India, China, Russia, Eastern Europe and the Middle East.
Bombardier has seen a lot of growth throughout both Eastern and Western Europe and Russia. Meanwhile, places such as India and the Asia Pacific are considered to be emerging markets, which will become even more dynamic once infrastructures are in place to support the widespread use of business aircraft.
Historically, North America has been the centre of the business jet universe. But Bombardier is now delivering about 70 per cent of its business jets to non-traditional (international) markets. This trend started about four years ago and has reversed the traditional 70 per cent North America, 30 per cent international, sales pattern that had always existed.
An important reason for the growing acceptance of business jets internationally is that manufacturers have been able to market their products as business tools. Still, international buyers have their own approach to business jet ownership. One interesting difference between traditional North American customers and European business jet owners is that when the aircraft is not in use, the Europeans are much more likely to offer it for charter, in order to bolster the business case.
While many economists are warning us of a global downturn caused by the continuing economic woes in the US, the effects on the business jet market might be somewhat cushioned by the current backlog of orders.
US economic problems notwithstanding, some manufacturers are expecting a leveling off of the market by 2010 anyway, but no one is predicting much of a downturn over the next decade.
As evidence of the confident attitude among manufacturers, Cessna has affirmed its faith in the future of the market by announcing its new large-cabin intercontinental aircraft, the Model 850 Citation Columbus, while Bombardier has recently released plans for its new all-composite Lear 85. Barring some unforeseen catastrophe, the future still looks very bright.