NBAA-BACE Newsmakers Panel Analyzes the Current State of Business Aviation and Its Future
Oct. 16, 2023
A distinguished panel of aviation analysts offered their perspectives on the current state of the business aircraft market, as well as the influences moving it toward the future, during the Media Day Newsmakers Luncheon prior to the official opening of the 2023 NBAA Business Aviation Convention & Exhibition (NBAA-BACE) in Las Vegas.
While most industry forecasts call for continued, steady growth for business aviation in the foreseeable future, Sheila Kahyaoglu, managing director and aerospace analyst at Jeffries, cited ongoing supply chain difficulties as one reason for the company’s more “subdued” expectations.
“Our 2024 forecast is only 5% above 2019 levels, which was basically where 2013 was,” she said. “The industry has not really grown over the last decade.”
“The industry was basically dead in the financial crisis until 2018,” added Ron Epstein, senior aviation analyst for Bank of America. “We then saw a real recovery in earnest until COVID happened, and then industry got quite hot. And now you’re just normalizing back to where the industry was back in 2018. Just a normal recovery, the way it should have been.”
Although many have focused on new users driving this growth, longtime business aviation analyst Rollie Vincent downplayed the influence of those who might say they’ll avoid the airlines and only utilize business aviation going forward.
“People will continue to fly privately where it makes sense,” he said. “It’s not black or white. I know an [entrepreneur] with a couple of Gulfstreams in the hangar, who hops on commercial flights when he goes to Denver or Dallas. People may say they’ve flipped a switch, but the rational person will choose the best option for their needs.”
The discussion then turned to future trends, and in particular the role of sustainability in driving new industry developments.
Session moderator Richard Aboulafia of AeroDynamic Advisory asked panelists about the seeming “mismatch” between “the kind of new product investments that we know stimulates demand” at the low end of the market, and manufacturers’ continued focus on more profitable, large-cabin intercontinental aircraft.
“In any other industry we cover, six product introductions over a course of a year and a half would [lead us] to short the segment,” Kahyaoglu said. “Everybody loves the heavy end of the market, though, so that’s where we see the most growth.”
“The way to see more innovation at the lower end of the market is [to adopt] business models and technologies that allow that to happen,” Epstein added. “Electric propulsion may be able to help with that, but companies will deploy their capital where they see the best return.”
Demographics will also influence the market. Vincent noted significant interest from those under age 40 in expanded charter options and development of hybrid electric propulsion – two aspects older industry personnel generally don’t consider as key drivers, according to his company’s polling.
“Hybrid electric is coming,” he said. “Ask the engine companies, they’re investing really heavily there. It’s going to help us on our technology roadmap to get to [zero-carbon emissions] by 2050. After that will come all-electric in our sectors, but I don’t think it’s coming for 25 or 30 years.”
To reach those goals will also require fresh talent and new ways of thinking across business aviation. “We solve our problems by technology,” Vincent said. “We need to bring more talent to this industry and get them excited about all this technology that brings people together.”
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