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What Will Happen in BizAv During 2017?

Thoughts and predictions from the Business Aviation industry

Terry Spruce   |   5th January 2017
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Terry Spruce Terry Spruce

Terry Spruce began as a freelance aviation journalist in 2005, after working for a well known...
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Discussing their thoughts on the coming year, Terry Spruce caught up with four respected industry professionals to garner a global perspective on Business Aviation for 2017…

Asian Market View: Mike Walsh, CEO, Asia Jet

“Looking ahead, it will be interesting to gauge the mood of my industry colleagues in the Middle East after the US election result and what effect that may have on the jet market not just in the Middle East but also the Far East. It actually may pave the way for more uncertainty in the first half of 2017 which has been the pattern in the second half of 2016.

“Whilst the US market, and charter in particular, has been enjoying a buoyant prolonged period of growth and healthy utilization numbers, and while Europe has also reported strong results too, other parts of the world have suffered due to a lack of infrastructure and systems in place to cope with the continued growth we saw from 2008-2015.

“Greater China consistently enjoyed double-digit flight movement growth at all the major Tier 1 airports for BizAv during this period. But we must also recognise that the commercial airline sector also enjoyed similar growth numbers over the same period.

"Airports have been creaking at the seams for the past two years and the net results now are operational restrictions being placed on non-scheduled services. Slot restrictions, parking restrictions, curfew restrictions as well as the creeping into play of cabotage and protectionism are unhealthy off-shoots of such pressures. So it’s not an easy overnight fix.

“But on a positive note the Central Government of China and other jurisdictions in SE Asia are starting to recognize General Aviation’s importance as an economic pillar for their countries, announcing policies to stimulate investment and the development of General Aviation under civilian usage requirements. (Business Aviation falls under the General Aviation banner in most Asian Governments’ mind-set.)

“So as we head out of the Year of the Monkey into the Year of the Rooster, we hope for a more predictable and stable year."

"It will be a risk-averse, cautious year in many respects. Most commentators see another challenging year ahead. The Brexit effect is far less potent in Asia, but we do have political uncertainty across the region that in some cases has paralysed politically-sensitive infrastructure decisions being made. And now with the TPP agreement under threat it could hinder a quick return to more positive sentiment amongst potential aircraft buyers and charter users.

“The Year of the Rooster should be a powerful one, with no middle of the road when it comes to moving forward...

"Remember, in a Rooster Year, all of the Chinese animals can reap great rewards by tapping into the Rooster’s traits. Loyalty, commitment, hard work, ethical, family values - and top-notch marketing campaigns, product placement, keeping up appearances are just some of the characteristics that will be rewarded this year...”

UK Market View: James Dillon-Godfray, Business Development, London Oxford Airport

“I don’t think an awful lot will change in 2017, but so far as the UK is concerned, delving deeper into the different scenarios post-Brexit (2019 and beyond, we assume), and formulating battle plans for the more adverse scenarios (such as the possibility of losing some freedoms of the air as a UK carrier/operator) will be of key importance.

“Any fundamental change to the status quo on this front could really stuff some business aircraft operators coming in and out of the UK and London. The trouble is that nobody has the slightest clue as to how things will pan out yet.

“I think the dollar may weaken a bit if Donald Trump’s plans cause any turmoil, which would reduce jet fuel prices globally (since these are all priced in US dollars).”

US Market View: Rolland Vincent, Director, JETNET iQ

“The US market could pick up quite nicely in 2017, with higher growth, lower corporate taxation, and more business confidence.  These developments will be good for Business Aviation, and will be welcome offsets to what looks like a more tentative outlook for the industry worldwide.

“The ‘topic du jour’ across the industry in 2017 will continue to be residual values - or the lack thereof.  The overcapacity issue in the market will be a major factor that will keep a lid on the market price for both new and used business jets.

“I am quite interested in watching the developments of new business models that promise to lower the costs of entry for prospective new customers who would like to benefit from Business Aviation. I expect that we will witness several important developments on this front in 2017, especially in high-utilization operations.”

US Market View: Kirk Stephen, Director of Marketing, Meridian

“My big BizAv prediction for 2017 is that we will see mergers again among the FBOs, and phone apps going mainstream for booking on-demand charter. I predict that the percentage of charter trips booked online in 2017 will increase by double-digits versus 2016, and the number of first-time Business Aviation flyers will spike.

“Now that the US has elected a new President - one that already owns a private jet – we should see a big boost to our industry. The President-elect has also been taking his populist message to the people about saving American jobs and promoting within. Since the Business Aviation industry has so much invested in Wichita, Savannah, and other parts of the country, I think this will help to generate real growth.

“Optimism will give way to investment, which will increase competitiveness, which will create the need for critical mass and synergies.

“Overall, 2017 should be a good year – and we deserve it!”

Conclusion

A change of President in the US, a number of upcoming EU nation elections, Brexit negotiations, and growth in other areas of the world (especially the Far East and Middle East) will make 2017 an interesting year. You can add the advances in aviation technology, greener fuel and new business aircraft being launched during 2017 to this conclusion.

Business Aviation has always been an exciting industry, and 2017 will continue that trend...!

Read more about: Aircraft Sales Trends | Business Aviation Forecasts | Global Markets | Business Aviation Market Analysis

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