Editor Welcome.qxp_JMesingerNov06 23/06/2021 10:16 Page 1
Guest Editor’s VIEWPOINT Rollie Vincent JETNET iQ
Mid-2021 Waypoint Check
M
oving past the mid-point of 2021, it seems appropriate to assess our position as an industry; as organizations within the industry; and as individual contributors.
Industry
As an industry, there are many tangible reasons to celebrate our recovery from the depths of the COVID-19 induced crisis. Pre-owned business aircraft sales volumes were at all-time highs in Q4 2020, as we somehow managed to satisfy customer demand despite limited – then shrinking – levels of inventory. In the new aircraft market, shipment volumes to customers ended the year down by about 20%, Year-Over-Year (YOY). In context, that’s a rather strong performance given factory furloughs, supply chain disruptions, and unprecedented logistical challenges that inhibited or denied in-person meetings, wreaking havoc on pre-purchase inspections, contract negotiations, specification meetings, and that allimportant ‘signatures and exchange of keys’ meeting at the point of delivery. Order backlogs at the ‘Big Five’ business aircraft OEMs fell about 18% in value in 2020, YOY, which was a disappointment after the decade-awaited gains that were seen in 2019. But the backlogs still represent about 1.5 years of total production at 2020 delivery output levels. To put things into perspective, US business jet cycles (take-offs and landings) were down 23%, YOY, on a consolidated basis, but down 33% YOY for international operations. In the commercial airline industry, Airbus deliveries were off 34% in 2020 versus 2019 as the airline industry felt the full brunt of COVID-19 travel disruptions. The International Air Transport Association (IATA) reported that commercial airline industry demand, as measured by revenue passenger kilometers (RPKs), fell by 66% in 2020, and 76% for international passenger traffic. IATA referred to 2020 as a “catastrophe”. To summarize: while Business and General Aviation (B&GA) was subjected to COVID-19’s hurricane gale, the sector fared much better than the commercial airline industry in weathering the worst disruptions in 2020. In fact, our latest indications from the Q2 2021 JETNET iQ Survey suggest that the overall sentiment of business aircraft owners/operators has now fully recovered from the nadir of Q2 2020 and is at the highest level we have yet measured.
This bodes well for industry activity and demand in H2 2021 and beyond. With multiple metrics that JETNET iQ monitors now clearly “in the green”, we have recently increased our 10-year outlook for new business jet deliveries, particularly in the latter half of the outlook period. Tempering the near-term outlook are lingering challenges with international vaccine distribution; air travel restrictions; trans-border quarantine requirements; and consumer and business sentiment that are reflections of the reality of our global and interconnected industry. While we are bullish about an industry that has recovered so well already, we are mindful that not all industry sectors, segments, and regions are experiencing the benefits of our climb-out from the COVID-19 black swan, and the associated economic recessions.
Organizations
Whether large or small, organizations have had to make major adjustments to the way they operate and interact with their customers, suppliers, and employees. In a very short period of time, organizations had to adapt to a very harsh reality of COVID-19 protocols that changed everything, almost overnight. The wise amongst them have not “wasted a good crisis” and almost immediately seized the opportunity to reimagine the way they operate and interact with their key stakeholders. While some activities are in-person almost by definition, other roles are now seen more clearly as potential “work from anywhere” activities that are actually being performed at lower total costs, with higher quality and productivity. While the jury is still out regarding whether these organizational benefits are sustainable in the longer-term (virtual team building, anyone?), in the short-term they are unexpected, nice-to-have benefits to the bottom line to take out at least some of the COVID sting.
Individuals
As individuals, I am convinced that in-person relationships give meaning to our work and are at the core of our professional and personal development. While I have great respect for the electronic tools that we rely on every day to keep us connected and informed, I am not alone in feeling ‘Zoomed out’; the sooner we get back to in-person meetings, the better for our industry, our organizations, and our people. ❙
Rollie Vincent is the Creator and Director of JETNET iQ. With almost 40 years in the aviation industry, he partnered with JETNET in 2010 to create JETNET iQ. Mr Vincent is also chair of the Transportation Research Board’s Standing Committee on Light Commercial and General Aviation, and is the President of Rolland Vincent & Associates, a consultancy focused on aviation market research, strategy, and forecasting. More information from www.jetnet.com
4 Vol 25 Issue 7 2021 AVBUYER MAGAZINE
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