Andrew Douse
Analysts are predicting a bright outlook for the executive aircraft industry over the next decade, but say there could be a black cloud on the horizon for two firms in particular.
A total of 3,789 business aircraft, valued at $46 billion will be produced worldwide from now until 2006, says the Teal Group in its annual world business aircraft production forecast.
The study, released at Dubai '97, says the executive jet market is enjoying a period of healthy growth. Last year there were 352 business jet deliveries worth a total of $3.6 billion.
"Even better times are on the way," says Richard Aboulafia, lead analyst for Teal Group's World Military and Civil Aircraft Briefing. "Deliveries will rise to 408 jets worth $5.1 billion this year, one of the best single-year increases in the market's history. And 1998 should see deliveries of 420 jets worth $5.4 billion."
Teal analysts say three factors are providing the fuel for market growth:
The economy, and confidence in it.
New technology, particularly engine technology.
Fractional ownership, or business jet time-sharing.
The Teal study reports that the business aircraft market is dominated by five major players: Raytheon, Bombardier, Dassault, Gulfstream and Cessna, which together have more than 90% of the market.
"This dominance will continue, as these companies have the resources and critical mass to develop ever-important new models, and to withstand market downturns," predicts Aboulafia. "The other players will either remain niche players, or be absorbed by Bombardier, Cessna or Raytheon."
Teal analysts count 17,300 business aircraft worldwide, including 8,700 turbofan-powered models. Almost two-thirds of both the turboprop and turbofan fleets are in North America. Europe has almost 2,000 business aircraft, and South America is third largest market with 1,620. Asia is the hoped-for emerging market with China alone representing a sizeable new market.
In his briefing, Aboulafia says: "There will be the inevitable, but not too-harsh, downturn, but deliveries should stay around 1996 levels.
Overview
"The most notable thing about the luxury market sector is that it will soon be eclipsed. Once the GV and Global Express come on line, customers who want nothing but the best will move on."
Aboulafia also highlights 'two targets' in his briefing, saying: "IAI is trying to reinvent its business jet unit as US-based Galaxy Aerospace. It's going from a government-supported, money-loser, building small numbers of Astras, to a slightly larger independent player, offering the upper-middle Galaxy design as well.
"Since Bombardier wants an aircraft in this class, there is a strong chance that Galaxy Aerospace has been created as an acquisition target."
* A glitch in Monday's story on the Boeing Business Jet and Airbus A319CJ saw the prices for the two machines being transposed. The 'green' version of the BBJ currently sells for $32 million and that of the A319CJ, for $35 million.
Source: Flight Daily News
