Bright Spots for European Business Aviation Sector

Commentary by Scott Plumb, Jetcraft’s former Senior Vice President of Sales
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Last week’s European Business Aviation Conference and Exhibition (EBACE) was a major event and helped put the spotlight on the European sector of our industry. For the last few years, Europe has remained more or less stagnant, with only slight growth reported overall. However, there are some bright skies ahead for the continent.

First, it helps to remember that the European fleet is indeed growing. In 2001, Europe held 1,517 aircraft according to the European Business Aviation Association (EBAA). As of 2014 this number had more than doubled to 3,301 aircraft. So growth is occurring, though slower than perhaps the industry would like.

Europe remains the world’s second largest private jet market (behind North America) and accounted for 14 percent of deliveries in 2013. Bombardier’s latest market forecast states that Europe is expected to remain one of the main markets for new business jet deliveries between 2014 and 2033, at 3,575 unit deliveries. This represents a growth rate of around six percent for the period.

There are some good deals to be found in Europe as the fleet as a whole is relatively young. Sellers are more and more likely to make deals now that pricing has stabilized. Another factor helping sales is that the dollar has strengthened, giving Europeans a better return on deals with North America buyers.

But not all the activity is on the sell side. Jetcraft has seen an uptick in buyers in the United Kingdom, Spain and Italy. There are certain businesses and high net worth individuals (HNWI’s) who have grown in the face of challenging economies. They see advantages in purchasing before the market moves to full strength. There are also those owners of private aviation aircraft who have held onto their aircraft long after their warranty coverages have expired and seek to get back into an aircraft that is comprehensively supported.

How does Jetcraft see the next 5-10 years playing out for European business aviation? Much like the US market has bounced back over the past twelve months, we suspect that over the next few years similar improvements will be viewed in Europe. As stronger economies and businesses drive the need for business aviation assets, the European sector will start to see stronger growth in the long run.