Covid-19: ‘Most telling months behind us’ says analyst
The most crucial months to assess the recovery of business aviation industry are already behind us, according to Brian Foley, founder, Foley Associates. The US-based analyst told Corporate Jet Investor the industry is now acutely aware of the challenges the global pandemic has produced.
“The most telling months are already behind us. We now know that business jet unit deliveries will be off 15-30% for the year, due to factory closings and slowdowns. There have been layoffs and the backlogs and book-to-bill ratios are off at all manufacturers.”
Foley continued: “Preowned sales will likely be down double-digits this year, due to the inability to interact during lockdown. Also it wasn’t unusual to hear of business being off 50% or more at some charter companies during the first half of the year, despite claims that business was brisk from those new to private travel avoiding the airlines.”
A lot can change in six months and the most immediate risks to the industry have shifted too. At the turn of the New Year the industry was predominantly concerned with environmental issues, such as flight shaming and sustainable aviation fuel (SAF), however Covid-19 has realigned focus on cash flow. “The top concern has now shifted to liquidity, or a business aviation company’s ability to continue enduring reduced activity amongst most segments of the industry,” said Foley.
One solution Foley points to would be a vaccination for Covid-19. “A vaccine would boost the business travel season, which for now looks bleak through the end of the year and into early next.” As yet there is no vaccination for Covid-19, but by year end there could be as many as six vaccines, including one in development at the University of Oxford which is advanced stages of testing, according to media reports.