Business jets: Could this time really be different?
The prospect of long waits at germ-filled airports makes owning a business jet an attractive proposition right now for executives. At the same time, a sharp recession could drain the corporate treasury of funds to buy one. The private-aviation industry is now stuck in this tug of war unleashed by the Covid-19 crisis. Short term, the pandemic has been quite damaging. Earlier this month, Ohio-based NetJets—the world’s largest private-plane operator—more than halved the number of aircraft it plans to receive this year to 25 from around 60, and announced job cuts in the US and Europe. This is in part a result of business-jet makers being forced to furlough employees, affecting production. Private planes occupy an infamously cyclical niche within the aviation industry. During the global financial crisis, as corporations slashed budgets and sought to appear less opulent to the public, the number of business jets shipped world-wide fell from over 1,300 in 2008 to under 700 in 2011, according to the General Aviation Manufacturers Association. Demand didn’t edge up until 2018 and 2019, when new aircraft models sparked fresh interest. Without face-to-face negotiations, transactions have now frozen. As Scott Connelly, CE of Cessna-owner Textron, put it in a recent call with analysts, developing new customers is very difficult unless “folks can do demo rides.” As lockdowns ease, though, this time could really be different—at least up to a point. Story has more.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-05-25/general/business-jets-could-this-time-really-be-different
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Business jets: Could this time really be different?
The prospect of long waits at germ-filled airports makes owning a business jet an attractive proposition right now for executives. At the same time, a sharp recession could drain the corporate treasury of funds to buy one. The private-aviation industry is now stuck in this tug of war unleashed by the Covid-19 crisis. Short term, the pandemic has been quite damaging. Earlier this month, Ohio-based NetJets—the world’s largest private-plane operator—more than halved the number of aircraft it plans to receive this year to 25 from around 60, and announced job cuts in the US and Europe. This is in part a result of business-jet makers being forced to furlough employees, affecting production. Private planes occupy an infamously cyclical niche within the aviation industry. During the global financial crisis, as corporations slashed budgets and sought to appear less opulent to the public, the number of business jets shipped world-wide fell from over 1,300 in 2008 to under 700 in 2011, according to the General Aviation Manufacturers Association. Demand didn’t edge up until 2018 and 2019, when new aircraft models sparked fresh interest. Without face-to-face negotiations, transactions have now frozen. As Scott Connelly, CE of Cessna-owner Textron, put it in a recent call with analysts, developing new customers is very difficult unless “folks can do demo rides.” As lockdowns ease, though, this time could really be different—at least up to a point. Story has more.<br/>
