Fractionals to the rescue of BizJet market

In a new study entitled "The World Market for Business Jet Aircraft," Forecast International/DMS projects that 8,199 business jets, worth some $135 billion, will be produced between 2002 and 2011.

The business jet market is currently in a downturn, following a boom that began in the mid-1990s. Forecast International/DMS predicts that annual business jet production will decline in both 2002 and 2003.However, growth in annual production should resume in 2004, according to the study.

"Fragile economic conditions and declining corporate profits are currently taking their toll on the business jet market," said Raymond Jaworowski, senior aerospace analyst and author of the study. "Other factors that may negatively impact the market include higher jet fuel prices, limits on airport access, and local noise regulations."

A number of positive factors, though, exist in the market. Order backlogs remain at high levels, including those for several business jet types presently in development.

Meanwhile, fractional ownership programmes have dramatically lowered the cost of ownership of a business jet, by allowing a customer to purchase a share in a jet based on required flight hours. "These programmes have considerably widened the pool of potential customers for a business jet, and are also providing existing business jet operators with a less expensive option that could be used when profits are down," Jaworowski said.

Forecast International expects 775 business jets will be produced this year, followed by 728 aircraft in 2003.Yearly production will then increase, exceeding 850 units in 2005 and 890 units in 2006.Annual levels may then fall off somewhat after 2006, though never dropping below 805 units through 2011.

In terms of unit production, Cessna is expected to be the market leader during the 2002-2011 period with a market share of 28.1 percent, on production of 2,307 aircraft. Bombardier, with 1,889 aircraft, and Raytheon, with 1,055 aircraft, will follow with 23.0 percent and 12.9 percent, respectively.

When the market is measured in value of production in US dollars, Bombardier takes the top spot, with the value of its 10-year production expected to total $36.0 billion for a 26.7 percent share of the market. Gulfstream is second with an estimated $30.8 billion and 22.8 percent share. Dassault is third with production worth $21.9 billion, for a 16.2 percent share.

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