Embraer Legacy 450 business jet

Is business aviation on the rise?

Embraer Legacy 450 business jet

On a global scale, experts have been touting the business aviation industry to continue its year-on-year growth. According to Honeywell Aerospace’s latest Global Business Aviation Forecast, jet operators across the world can expect to enjoy an average predicted annual growth of 4% over the next ten years. Programme schedule recoveries, new model introduction and additional fractional uptake have all been attributed to the industry’s growth figures. Through to 2024, the OEM forecasts that the industry can expect up to 9450 deliveries of new business jets – valued at a staggering US$280 billion.
These latest figures have buoyed the Middle East’s business aviation industry, and MEBAA, the Middle East’s Business Aviation Association, has placed its futuristic value on the regional business aviation industry at $1.3 billion by 2020. This would raise the market value of the sector to double its value today. “Working closely with our members and partners we believe this to be a realistic prediction for the region,” says Ali Al Naqbi, founding chairman of MEBAA, confident that the sector is earmarked for ‘tremendous’ growth over the next few years. “I predict we’ll see an influx to the existing FBO’s, MRO’s and operators, increasing competition and ultimately benefitting the end-user and the industry as a whole,” he says.

The advent of newer, more cost-efficient and longer range business jet models has also led to a surge in fleet renewal plans amongst the world’s business aviation operators. On average, operators interviewed as part of Honeywell’s outlook planned to replace around 23% of their fleets with new jets in the coming five years. Comparably, levels in the Middle East and Africa were considerably lower. Only 18% of regional respondents planned fleet replacements or new jet purchases – a drop from last year’s figures of 26%.

With the numbers appearing to show a loss of industry confidence this year, Al Naqbi prefers to put the discrepancy down to political instability in some parts of the region. “The current climate of political issues experienced by many countries in the Middle East and Africa are major causes affecting purchase plans,” he says. “That’s why we have seen a decrease of 4%-7% this year.”
Raghed Talih, sales director for the Middle East, Turkey & North Africa, Business & General Aviation at Honeywell Aerospace, agrees. Although the level of purchasing plans may be under the world average, he says, the figures are unsurprising considering some of the macro trends affecting the region. “This includes the serious medical challenges continuing to affect Africa and the impact of political conflicts and fluctuating oil prices on the region as a whole,” says Talih. “As a consequence, operators in the region are scheduling their purchases later in the next five-year window than expected last year, with only 21% of purchases planned before 2017.”
Despite this slight downward year-on-year trend, both Al Naqbi and Talih assert that the region remains a very important market for business aviation as a whole. “Operators in the region are committed to investing in the best of the best when it comes to performance and comfort-oriented technologies,” says Talih. “Therefore while the industry must continue to operate cautiously, we still see reason for market optimism in the long term.”
Meanwhile, global purchasing continues to tend towards larger and longer-range aircraft, with more than 75% of new business jet purchases expected to be large-cabin models. Talih finds that this trend is particularly prevalent in the Middle East, where buyers and passengers expect unrivalled levels of comfort, performance and efficiency from their aircraft. “Passengers in the Middle East want to fly further, faster and benefit from cabin sizes that can support larger travelling parties than in other parts of the world,” he says. “There remains significant growth in the large cabin and VVIP business liner aircraft categories, which also have considerable value attributed to them.” Unsurprisingly, new technologies, from high speed connectivity capabilities to the latest high definition multimedia cabin management systems, continue to also play an important role in new jet choices.

With its high concentration of HNWI’s, Saudi Arabia remains one of the most promising of the GCC markets in terms of this demand. As Saad Al Azwari, CEO of Saudi-based private aviation operator Nasjet points out, Riyadh is one of the top wealthiest cities in the world, with 57 billionaires holding an estimated combined wealth of $166 billion. “Private jet usage in KSA is also higher than the global and regional average and is estimated to be growing by an average rate of 7%,” he says. “In our experience the market is still dominated by the HNWI, particularly when it comes to aircraft ownership.”

More… http://www.arabianbusiness.com/is-business-aviation-on-rise–573682.html

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