Business jet market to show ‘significant growth’: Two reports
The global business jet market is predicted to show significant growth in the years to 2027 and 2030, according to two separate reports published recently. MarketsandMarkets predicts the sector will grow from its current estimate of $18.8bn to $38bn by 2030, at a compound annual growth rate (CAGR) of 7.3%. Fortune Business Insights forecasts the market to reach $35.56bn by 2027, displaying a CAGR of 5.37%.
The MarketsandMarkets’ report attributes the growth to the increasing number of High Net Worth Individuals (HNWIs), new aircraft programmes, and ageing fleet size. While Covid-19 has hit business aviation due to air travel restrictions on domestic and international flights, resulting in the grounding of aircraft and dip in orders and deliveries in 2020, the report predicts recovery in the first quarter of 2021.
As restrictions have been relaxed, business jet operators and service providers have witnessed “a sluggish demand for charter services”, according to the report. Clients are choosing to charter to gain quicker access, skip long and crowded check-in, customs, and immigration queues of people with unknown travel histories, it said.
The light aircraft segment is expected to grow at the highest CAGR in the business jets market up to 2030. The growth of this segment can be attributed to the anticipated commercialisation of air taxis, which will be used as business jets for inter and intracity travel. Growth of urban air mobility between 2025 to 2030 is expected to drive the overall business jets market further.
Light aircraft segment
“Manufacturers in the business jets industry are focusing on improving passenger experience and increasing operational efficiency. Lowering carbon footprints, reducing operational cost and upgrading avionics, cabin interiors, and aircraft systems are some of the areas of focus for manufacturers. This has resulted in the introduction of new aircraft programmes,” according to the report.
While North American remains the biggest market, Latin America and Africa are among the fastest-growing regions for business jets market, notes the report. The rise in the deliveries of business jets from Embraer in Brazil is driving the market growth of the entire Latin American business jets market. Significant growth in trade and tourism is also expected to fuel the regional demand for business jets.
The growth of the market in Africa is driven by the increase in VVIP and business transport in the region, as well as the growth in the tourism sector.
Commercialisation of urban air mobility will further drive the growth of light business jets market, which will be used for intra- and intercity travel. “Though the market has witnessed a slow growth in recent years, aircraft with Vertical Take-off and Landing (VTOL) capability and environment-friendly propulsion technologies, including electric and hybrid engines, are expected to reduce the operating costs drastically and serve as an opportunity for the market growth up to 2030,” according to the authors. But, in order to make significant progress, the sector needs technological advancements in terms of battery capacity; building infrastructure such as vertiports and charging pods; and robust regulatory framework.
Avionics sub-segment
The avionics sub-segment of OEMs is projected to grow at the highest CAGR from 2020 to 2030. This growth is attributed to the periodic upgrades in avionics systems. Continuous improvements in software technology have modified the human-machine interface of avionics systems. It has become more user-friendly and can automate a wide variety of in-flight tasks, thereby reducing the workload of the flight crew to a large extent.
Meanwhile, Fortune Business Insights forecasts the business jet market will display CAGR growth of 5.37% to reach $35.56bn by 2027. Estimating the global market value at $27.54bn in 2019, the report studies the short- and long-term impact of Covid-19 on the market, plus market drivers, trends and opportunities.
North America will retain its prominent market position, while Europe will register significant growth, according to the report. “North America, with a market size of USD 9.75 bn in 2019, is anticipated to lead the business jet market share during the forecast period. This is mainly attributable to the robust aviation infrastructure in the region along with the steadily climbing demand for hybrid jets in the region.”
In Europe, the two main drivers of growth are identified as the emergence of leasing facilities and rapid adoption of advanced aircraft propulsion systems. “Asia Pacific is expected to offer lucrative business opportunities for market players owing to promising economic growth, establishment of foreign businesses in India and China, and speedy rise in business air travel in the region,” it says.
Earlier this month, Corporate Jet Investor reported OEMs look set to deliver 30% fewer jets and turboprops – around 560 aircraft in 2020 compared with 809 last year.
Source: MarketsandMarkets
Global business jet market growth – at a glance
- -Forecast to reach $38bn by 2030 from current value of $18.8bn
- -CAGR of 7.3%.
- -Light aircraft segment expected to show highest CAGR.
- -Forecast to reach $35.56bn by 2027
- -CAGR of 5.37%.
- -North America to lead business market share.
