With the European Business Aviation Convention and Exhibition (EBACE) launching this week in Geneva, Jetex takes an inside look at the trends and challenges of the European market.
With all the talk being on the surging North American market, it might be easy to forget about Europe. But despite some recent challenges, the European Business Aviation market remains alive and well – a point driven home by the latest analysis and forecasts.
For example, according to the European Business Aviation Association (EBAA), the state of business aviation in Europe can be summarized as ‘continuing to climb’. This sentiment is made clear in this year’s edition of its Annual Review of Business Aviation in Europe.
In terms of industry trends, one key indicator highlighted in the EBAA report is conservative growth. Despite ending 2014 with a disappointing flight activity growth rate of .7%, overall business aviation fared better than other segments of the air transportation sector. According to the report, a key reason behind this low level of activity was external factors, including economic and political pressures. “If no earth-shattering events were to occur in 2015, business aviation should be the first to benefit from some economic stability, although forecast for growth remain conservative,” says the report.
Despite these challenges, the EBAA says that Europe’s fleet continues to climb. For example, as of 2001 the European fleet consisted of 1,517 aircraft. As of 2014 this number had more than doubled, checking in at 3,301 aircraft. The report demonstrates that this growth has been relatively incremental over the past decade.
On top of this, the European fleet remains one of the world’s youngest, with 50% of all aircraft being less than 10 years old. In terms of aircraft type, the trend from 2005 to 2014 has been high growth in Ultra Long Range and Very Light Jets, with a decline in Entry Level and Midsize Jets and, significantly, a decline in Turboprops, which has traditionally been the segment’s workhorse. This suggests that the market may be shifting towards long-haul, heavy aircraft operations becoming the industry’s bread and butter.
Another trend highlighted in the report is that of location. According to data collected, the activity of the European fleet is shifting in terms of location. A clear example of this is happening here in Geneva. What has long been Europe’s second busiest European airport for business aviation, since 2011 it has seen a decline in its departure figures. Similar declines have been seen in Zurich and major Italian airports. On the other hand, the UK’s Farnborough and Luton airports, along with France’s Nice, have all seen increases in departure activity.
What can be taken away from this is that business aviation continues to struggle to access major mixed-mode airports, feeding into the trend that the list of Top Ten European airports for business aviation is going through a major reshuffle.
Crunching the Numbers
Diving further into the state of the European market, according to the latest Honeywell Global Business Aviation Outlook all economic indicators point to stabilization – if not growth – in the region. According to the report, last year Europe’s purchase expectations jumped to 31%, bringing it back in line with the 30 to 33% levels seen in the three surveys before 2013.
Meanwhile, according to the most recent Bombardier Market Forecast, Europe remains the second largest market for business aviation. Led by the currently improving external environment and reduced fiscal austerity, the moderate economic recovery across Europe should continue in the short- and medium-term and stabilize in the long-term.
Noting that the European business jet fleet accounts for approximately 10% of the worldwide business jet installed base, Bombardier concludes by saying that Europe is expected to remain one of the main markets for new business jet deliveries between 2014 and 2033, at 3,575 unit deliveries, seeing significant fleet growth equivalent to a CAGR of 6% over the forecast period.
See You at EBACE!
This week’s EBACE will likely serve as a ‘straw poll’ indicator of how the industry views the European market, both today and in the coming years. Be sure to visit Jetex at booth G089 in Geneva! To arrange a meeting, contact us at firstname.lastname@example.org.