“The information contained in our databases and used in this presentation has been assembled from many sources, and whilst reasonable care has been taken to ensure accuracy, the information is supplied on the understanding that no legal liability whatsoever shall attach to Ascend Advisory – A Flightglobal Advisory Service – Reed Business Information Ltd, its offices, or employees in respect of any error or omission that may have occurred. 1 WHICH WAY NOW? WHAT IS THE OUTLOOK FOR THE BUSINESS JET MARKET? CHRIS SEYMOUR, HEAD OF MARKET ANALYSIS 2 Deliveries by Region – The Changing Trend 100% Unknown area Percentage of Deliveries 90% Middle East 80% 70% Africa 60% Asia Pacific 50% 40% 30% Latin America & Caribbean 20% Europe 10% North America 0% 2003 Source: Ascend Online Fleets 2008 Delivery Year 2012 Deliveries by Region – The Changing Trend Although 2012 business jet deliveries saw another ‘low year’ with just 675, virtually flat compared to 2011 and only half of the total five years ago, there are some interesting trends to be observed. North America and Europe still remain the two key markets for new business jet deliveries. However, their share of deliveries has fallen from almost 90% ten years ago, to just 70% in 2012. Emerging markets accounted for 30% of deliveries last year, highlighting the increasing importance to manufacturers of these markets, especially in Latin America and Asia/Pacific. Emerging Markets are Driving Fleet Growth Emerging Markets are Driving Fleet Growth Outside of the USA, the ten year business jet fleet growth is led by Brazil with over 750 aircraft added. This market has been stimulated by ‘home’ producer Embraer’s growing portfolio of business jet types. These emerging markets do differ in what sizes of aircraft being added. For example, China, which is seen as one of the leading markets for the future, has concentrated on adding larger cabin jets, for international travel. Once Chinese airspace opens up more, a market for smaller aircraft for domestic use should develop. Delivery Trend Shows Move to Larger Sizes Delivery Trend Shows Move to Larger Sizes There has been a definite shift in focus towards larger business jets in the past five years – the medium (mid-size) and larger types accounted for 53% last year, compared to less than 40% ten years ago. What many predicted would be a ‘boom’ in Very Light Jet sales was hit by the financial crisis – five years ago the smallest jets recorded a 28% share of deliveries; this was more than halved to 13% last year. The market for new smaller jets (light-mediums and under) has been affected by a high used inventory (many young aircraft available) and a lack of financing. However, there may be signs that the availability of new models could stimulate new sales. New Models Seeking to Stimulate Demand New Models Seeking to Stimulate Demand The business jet manufacturers have always been active in developing new variants of existing types (usually offering improved performance, uprated engines, avionics, interiors etc) and launching all-new types, albeit often with ‘family’ heritage. This has helped to stimulate sales as operators will replace aircraft on a much more regular basis than in the commercial airline market. In the next five years there are at least 20 brand new types or upgrades of existing aircraft coming into the market. This should help to bring new business jet sales out of the doldrums. It is possible that new deliveries will once again pass 1,000 per year by the end of this decade. Thank you for your reading News, Data, Analytics – Flightglobal.com Advisory – Ascendworldwide.com 11 Finance Forums: London: 10th – 11th July 2013 Tokyo: 25th – 26th September 2013 San Francisco: December 2013 Ascend – A Flightglobal Advisory Service