NBAA-BACE: Business aviation finance market ‘to fuel growth’

Finance specialists predict strong market growth.

The business aviation finance market is set to strengthen over the next two years as owners upgrade their jets and new buyers invest for the first time, according to a survey commissioned by Airbus Corporate Jets (ACJ).

The new survey of US-based business aviation financers and private jet brokers revealed 84% expect the business finance and leasing market to grow between now and 2026. Plus, 82% of respondents thought access to business aviation finance would increase between now and 2027. 

More than two-thirds (73%) of those surveyed expected specialist lenders to account for a bigger share of the market over the next five years. Nearly one-fifth (17%) of respondents expected dramatic growth, while 12% expect their market share to fall and 15% predicted no change.

‘Healthy state’

“This research shows the healthy state of the market in North America,” Vincent Tessier, head of Marketing, ACJ told CJI. “For many years, business aviation has been on a steady growth trajectory – even Covid didn’t stop that: to the contrary, business aviation became even more important. There’s growth fuelled by new aircraft entering the market with bigger platforms and more efficiencies – particularly fuel efficiency – and built-in innovation.”

The research also predicted growing demand for operating leases – where the lessor takes the title of an aircraft and leases it back to the buyer – among the business aviation financiers surveyed. Three out of four financiers and private jet brokers expect demand for these to rise.

“Operating leases provide a different kind of flexibility,” Tessier told us. “You don’t have the aircraft on your books  and you engage with the aircraft for a shorter period of time. Also, it doesn’t affect your ability to access credit. These could be reasons of why people are favouring operating leases.”

Finance rates        

Furthermore, nine out of 10 respondents  believe business aviation finance rates will become more attractive between now and 2026. “Interest rates play a big role and behind that the asset value will also become more attractive – particularly for large business jets,” said Tessier.

A growing preference for large business jets was another factor behind the growing interest in operating leases, according to the survey. Demand is increasing at a faster rate than for smaller jets with 35% of business aviation financiers and brokers judging that larger aircraft would hold their value better. Nearly two-thirds (62%) expect the sale of large business jets to increase over the next five years – with 8% predicting a dramatic rise.

Chadi Saade, president, ACJ said aircraft financing is key to supporting growth in the business aviation sector. “Our research suggests that the business aviation market is set to continue to expand and access to finance will become more available,” said Saade. “In particular, as demand for larger business aircraft increases, it may become easier to secure financing against them.”

Respondents thought the main factor driving the sale of business aircraft in the US is that many owners have older aircraft and want to upgrade them. Other top factors include manufacturers introducing new models, especially in the midsize and heavy jet categories, and growing recognition of the business benefits of using private jets, according to the survey. Other factors driving growth include an increased focus on the well-being of staff.

Meanwhile, ACJ hopes the survey augers well for sales its large business aircraft – including the ACJ TwoTwenty (pictured top), billed as “The Xtra Large Bizjet.” The survey was released at the NBAA-BACE event in Las Vegas.

Business aviation finance market survey – at a glance

• 84% expect the business finance and leasing market to grow up to 2026
• 82% think access to  finance will rise up to 2027
• 73% expect the market share of the business aviation finance market from specialist lenders to increase over the next five years.
• 17% expect dramatic growth, 12% expect their market share to fall and 15% predict no change             
• Nine out of 10 believe business aviation finance rates will become more attractive up to 2026
• 62% expect the sale of large business jets to increase up to 2029 – with 8% predicting a dramatic rise.

Source: Airbus survey of US-based business aviation financers and private jet brokers.