October 29, 2015

North America to Dominate Business Aviation Market

Jetcraft’s first-ever business aviation market forecast (free to download here) projects North American dominance of the global market throughout the coming decade. As the infographic above shows, aircraft deliveries to customers in North America are forecast to outpace the rest of the world combined, with 54% of the market.

Key analysis:

  • Our forecast is a bit different than some of the other business aviation market forecasts. Other forecasts are more optimistic about performance outside of North America, with many predicting deliveries from the rest of the world between 60-65% throughout the next 10 years. Jetcraft’s forecast sees North America leading the way, outperforming the rest of the world combined through 2024.
  • Our forecast also modulates a bit the emphasis on Asia-Pacific as a growth driver. Some of the softening of Asia-Pacific overall is due to the recent slowdown of the fast pace of economic growth in China, the nation that has been the primary driver of aircraft orders across the region. It’s likely that the projections of the past five-to-ten years, calling for private aviation growth rates of 15-20% per year in China were overly optimistic.
  • It’s no secret that North America, the U.S. in particular, is making a faster macroeconomic recovery than other regions of the world, Europe in particular. That’s the key reason we see North America driving the majority of demand for the industry, with total aircraft unit deliveries of 4,728 units projected.
  • It’s also worth pointing out that North America is leading an asynchronous recovery, compared to the rest of the world. In other words, North America deliveries might have been even higher, during the forecast period, if business confidence in other regions were greater.
  • An overwhelming driver is that North America is home to the greatest number of Fortune 500 companies and high-net-worth individuals. The U.S. possesses the longest history and greatest experience in business aviation ownership of any country.
  • The U.S. economy has grown in every one of the last five years. At the same time, economists are concerned that the trajectory of this growth is relatively flat, under 3%, hampering a robust aircraft transaction environment. Mitigating that flat growth is the availability of financing as a result of all the liquidity in the market. Another bright spot is the bonus depreciation allowance which allows individuals and companies to benefit from an aggressive depreciation schedule on capital equipment. Both examples favor business aviation by facilitating aircraft transactions.

Time will tell as to what economic climates await over the coming decade, and how the industry will fare as a result. North America should anchor deliveries in the period, providing a stable base for the industry.

Download your free copy of the Market Forecast for more insights.