MarketIndicators July18.qxp_Layout 1 19/06/2018 15:29 Page 5
BIZAV INTELLIGENCE T MARKET INDICATORS
Avinode Sees Strong Charter Market in Europe
Charter information specialist Avinode says it has “continued to see an ongoing improvement in the European market” having finally turned the corner last year... Oliver King, Avinode MD, said, “A year ago it felt like we had come through an uncertain period. But there is no mistaking now that we’re in a great period for growth in Europe, which we’ve not seen for a number of years. The core markets continue to grow. Even Sweden saw 8% growth last year, although it’s a small market and not material on the wider European stage.” King said among those using Avinode there had been growth of 13% YoY from 2016-2017. “There’s not many times we’ve talked about double-digit growth. It’s been a great year.” He added that previous years had seen a drop in activity in Spain and Italy, but now “We’ve seen it come back, especially at the lighter [aircraft] end.” The size of chartered aircraft has remained “very stable” after the shift toward lighter aircraft a few years ago (from midsize), while the heavy end “remained almost untouched,” King said, adding that the light end is “the most price-elastic and also it’s the end that’s attracting the new customers."
Article courtesy of Ian Sheppard and AIN MI www.avinode.com
2018 to be a Turning Point?
According to Flight Ascend Consultancy, this year may signal that the market turning point has been passed… Deliveries may have only increased by 1% in 2017, to 667 business jets, but the airframers have certainly come to terms with the new dynamics – streamlining their product offerings and bringing some genuinely exciting new types to market. At the smaller end some 10% of all new deliveries came from market entrants Honda and Cirrus, something that incumbents cannot ignore.
Light & Medium Jet Activity
The light segment saw a second year of falling deliveries, with fewer shipments of the popular Embraer Phenom 300 and the Cessna Citation CJ4. Embraer delivered the first Phenom 300E in April: an upgraded version of the aircraft including a new cabin. The light aircraft segment became more competitive with delivery of the first Pilatus PC-24. More than 20 are expected to be delivered in 2018, and Pilatus is reopening the orderbook after taking more than 80 launch orders. Midsize deliveries also saw a drop (of 9%). Among the most recent introductions, the Citation Latitude was the only type to increase with the Embraer Legacy 450 staying flat.
The super-midsize category is one of the most competitive, and there was a second year of falling deliveries in this segment, too. Deliveries of the Bombardier Challenger 350 fell and the Legacy 500 and Dassault Falcon 2000LXS/S also fell. Deliveries of the Challenger 650 were flat, while Gulfstream G280 deliveries increased. This segment will become further crowded with the service entry of the Citation Longitude later in 2018.
Long Range Activity
There was good news in the long-range sector, with a 4% increase in deliveries, reversing two years of falls as oil prices impacted demand for larger cabin, higher value machines. The market-leading Gulfstream G650 increased (albeit offset by fewer G450s and G550s deliveries), with the former ending production in early 2018. Gulfstream is busy testing its new G500 and G600 program, with certification due this year. There were mixed fortunes for the other aircraft manufacturers. Bombardier delivered fewer of its Global family but is introducing a new cabin for the 6000 as well as commencing deliveries of its new Global 7500 – the longest range model available – in 2018. Dassault increased its deliveries as the stretched Falcon 8X ramped up and replaced development of the 5X with a slightly larger 6X for 2022. There is also industry speculation about a new Gulfstream product launch to challenge the Global 7000.
Looking Ahead
In its 2018 forecast, Flight Ascend Consultancy is predicting some 7,500 deliveries will be made over the next decade – valued at $208bn (in 2018 dollars) and based on full-life base values. The long-range category will continue to dominate both in aircraft numbers (29%) and value (61%). MI www.flightglobal.com 28
AVBUYER MAGAZINE – July 2018
www.AVBUYER.com
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Aircraft Index see Page 129