Where is the centre of the business jet market?
With more than 11,000 business jets, the US is by far the largest corporate aviation market in the world. However, the business jet market’s centre of gravity is slowly shifting eastwards. The industry is lagging behind the world’s economic centre of gravity by about 40 years but may one day catch up.
Business aviation is an international industry but it has always been dominated US buyers. Some 64 per cent of the world’s fleet is based in North America in 2011 according to Ascend, and it is a key market. The industry, however, is shifting fast.
In 2002 US buyers accounted for 70 per cent of business jet orders, now it is around 40 per cent. The new business jet centre of gravity is one way of showing how the market has shifted.
The world’s economic centre of gravity
In 2010 Danny Quah, an academic at the London School of Economics, developed a model to find the global economy’s centre of gravity. It is a popular slide for presenters at conferences. Quaid’s picture shows how it has moved eastward.
Quah’s model (which is clever as it views the world as a sphere not a flat map) shows how in 1980 the world’s economic centre of gravity was in the mid-point of the Atlantic Ocean. By 2050 he forecasts it will be between India and China.
It is important to note that the centre of gravity is not where the most economic activity is taking place. Quah writes: “[The world economic centre of gravity] holds interest because it shows tendencies – the sharp eastwards drift of economic activity….not because that central location is where everyone should seek economic fortunes.”
The centre of gravity for business jets
Economic activity with business jets is hard to monitor as they move all over the world. Corporate Jet Investor looked at the world’s fleet in two ways: where the established fleet of aircraft is based; and second where new aircraft have been delivered and are forecasted to be delivered. We used Ascend’s database for historic and current fleet and Bombardier’s 2011 Business Jet Forecast.
It is also hard to track international ownership. Ascend and other databases considerably underestimate Russian ownership as buyers often base aircraft within the European Union.
We also regionalised the fleet – rather than using data for individual countries in order to fit in with Bombardier’s forecast.
The centre of the business jet fleet
It is easy for people outside the US to underestimate the size of the US fleet. The centre of gravity of the delivered business jet fleet shows this. However it is moving outside the US slowly.
Whilst the centre of gravity for the fleet is a useful reminder of the importance of the US, manufacturers, financiers and others involved in new aircraft transactions are more interested in where new aircraft are being ordered.
The centre of gravity for new aircraft shows how the new aircraft market is becoming increasingly international. The green dots represent Bombardier’s forecast for 2011-2020 and 2021-2030.
It is also worth looking at how far behind the economic centre of gravity the business market is. Bombardier forecasts that in 2020 the new aircraft business jets centre of gravity will be where the economic centre of gravity was in 1980. By the time the installed business jet fleet centre of gravity reaches the 1980 economic centre, the economic centre of the world will be near India.
Top 10 business jet fleets by country