The market for the business jet was valued at USD 15. 25 billion in 2020 and is anticipated to register a CAGR of 2. 50% during the forecast period (2021-2026), to reach a market value of USD 17. 86 billion by 2026.
New York, April 15, 2021 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Business Jet Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06062821/?utm_source=GNW
The COVID-19 pandemic affected the business jet market in the short term as the orders and deliveries witnessed a decline in 2020. However, no long-term effect has been observed on the market as the charter service providers’ (and other business jet providers’) fleet modernization plans have not been hampered. Furthermore, due to the increase in charter operations owing to the COVID-19 pandemic, the demand for business jets is expected to increase in the coming years.
Approximately 1/3rd of the business jet fleets currently in operation are more than 10 years old. This is driving the business jet operators and charter providers to invest in the fleet modernization programs and enhance their fleet’s capabilities. This is expected to propel the growth of the market during the forecast period.
With the growth of the tourism sector in Latin America and Southeast Asia, many charter operators are making plans to introduce new charter routes in the regions and further expand their presence. This is generating demand for lightweight and fuel-efficient business jets.
Over the past few years, there has been a significant increase in high-net-worth individuals and ultra-high-net-worth individuals globally. This is generating demand for private travel, subsequently driving the procurement of private jets with enhanced cabin interiors.
Key Market Trends
Large Jet Segment accounted for the Highest Share in the Market in 2020
The large jet segment currently dominates the market in terms of market share. This can be attributed to relatively higher prices of the large jets than light jets, despite the former’s lower deliveries compared to the latter. In 2020, demand for large jets was high, as they have a large cabin space that can accommodate approximately 19 passengers. However, the segment’s growth was affected due to restrictions on long-distance travels, globally. Nevertheless, in the coming years, the segment will witness positive growth as the travel restrictions are now lifted. For instance, in October 2020, Airbus announced that the company has received six orders for new ACJ TwoTwenty extra-large aircraft based on Airbus’ A220-100 with a range of more than 10,000 kilometer. The order for six aircraft included two from Comlux, a Switzerland-based charter company, and four from other undisclosed companies. The interior of Comlux aircraft will include a business and guest lounge along with private entertainment space and a private suite, including a bathroom. The first pair of aircraft for Comlux are expected to enter service in early 2023. Furthermore, fractional ownership of jets may also rise as owners try to avoid overhead costs and choose shared aircraft because of the market’s economic downturn and uncertainties. Such factors are anticipated to propel the growth of the market during the forecast period.
North America Held the Largest Market Share in 2020
North America currently has the largest share in the market and is expected to continue its dominance during the forecast period. The region holds the most extensive operating business jet fleet (more than 14,000 aircraft) in the world, with the United States accounting for the majority of its share. Due to the presence of many high-net-worth individuals and corporate companies, majority of the demand is for light jets and large jets. Furthermore, there has been an increase in the demand for charter services over the past few years in the region. Due to the impact of COVID-19 on commercial aviation, there has been an increase in demand for business aviation. For instance, Monarch Air Group, a US-based charter company, announced that the company has witnessed an increase (Year-on-Year) of 125% in total bookings till June 2020 compared to June 2019, and approximately 50% of its new charter contracts were received in June 2020. In addition to this, the charter companies have also decreased prices to take care of the business jet opportunities. The growth in charter operations in the region has propelled the fleet modernization programs by the charter operators to enhance their fleet efficiencies. According to Honeywell, approximately 15% of North America’s business jet fleet is expected to be replaced in the coming years. In June 2020, NetJets announced that the company had received its 25th Challenger 650 under an order placed during 2010-2012. The order included procurement of 75 Challenger 350s, 50 Phenom 300s, 30 Global 5000/6000s, 25 Challenger 650s, and 25 Citation Latitudes. Such fleet modernization programs are anticipated to accelerate the growth of the business jet market in North America during the forecast period.
The market of business jets is highly competitive with the presence of several major players. However, in terms of market share, few players, such as Bombardier Inc., Textron Inc., Gulfstream Aerospace Corporation, Embraer SA, and Dassault Aviation SA, among others, are currently dominating the market. Gulfstream and Bombardier, together accounted for 68% of the market share by revenue in 2020. To further increase their presence in the market, the companies are developing new advanced business jet models with enhanced cabin interiors and better fuel efficiencies. Such innovations are expected to attract new potential customers, which in turn will help the aircraft OEMs to increase their share in the market in the coming years. The aircraft OEMs are developing region-targeted strategies to enhance their sales. For instance, Airbus is currently in plans to further enhance its geographical footprint in the Middle East region as the company plans to take advantage of growing opportunities of the larger aircraft. Such targeted plans of the aircraft OEMs are expected to help the companies increase their sales and profits in the coming years.
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