Buyer Behavior Over the Next 10 Years see more
NAFA member, Chad Anderson, President of Jetcraft, discusses how findings from their 10-year market forecast reflect real-world trends in the private jet market.
The annual NBAA-BACE trade show is defined by one thing – an industry-wide interest in, and passion for, aviation.
Which is why Aerion’s announcement – that the first transatlantic supersonic jet since Concorde would soon be taking to the skies – was greeted with such enthusiasm at this year’s show. Aerion announced that the jet is on track to fly in June 2023, with the first transatlantic crossing the same year, 20 years after the celebrated Concorde flew its last.
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The faster-than-sound business jet will undoubtedly be a market disruptor, particularly given its anticipated intercontinental capabilities, which will be a key indicator of its market performance. According to Jetcraft’s new 10-year market forecast, those regions where business needs are increasingly globalized will take the lead in terms of unit deliveries. North America is set to account for 60% of deliveries (5,241 units) over the forecast period, with Europe taking second place at 18% (1,572), and Asia Pacific third at 13% (1,136).
Looking beyond new models to the pre-owned market, inventory levels are finally back to pre-recession levels, resulting in an increase in market competitiveness – and often more than one buyer for each aircraft. Some of the best deals are now made before an aircraft is even advertised. So, for both buyers and sellers, the need has never been greater to work with a consultant that has inventory visibility and can provide up-to-the-minute market insight.
It’s important to note, however, that buyer profiles have shifted slightly. Our analysis shows that some Fortune 500 companies have yet to return to historical aircraft transaction levels, as businesses are focusing on other financial priorities, such as share buybacks and paying down debt. This means they may not jump back into purchasing aircraft as quickly as we would have hoped.
Nevertheless, we anticipate that the increase in individual buyers will more than offset this. Worldwide wealth creation has spurred growth in family offices that are now offering a wide variety of specialized services, including business aviation. Together with the increase in block charter and fractional programs, this is exposing more ultra-high net worth individuals to the industry than ever before.
The lessons learnt in the industry over the past decade, since the economic downturn, have meant a slow return to optimism. But we’re confident that these lessons will ensure sustainable growth in business aviation for years to come, which is reflected in our 10-year market forecast. Ours is an enduring industry, and one with a buoyant future ahead.
Five Vital Questions About Private Jets Answered see more
NAFA member, Jahid Fazal-Karim, owner of Jetcraft, answers your questions about private jets.
With more than 20 offices worldwide and 55 years of experience Jetcraft is one of the true leaders in private aviation. With new jet share companies disrupting the market - creating an Uber-like marketplace in the elite world of private travel, Jetcraft continues to offer its experience and expertise to that top percent looking to purchase a private plane. Having accrued unparalleled industry expertise and understanding of the varied global markets in which they operate, has made Jetcraft a leader in aircraft sales, acquisitions and trades. We spoke with the company's current owner Jahid Fazal-Karim to understand the nuances behind what he does and how he's built such a successful company.
1. What does Jetcraft offer in the market that wasn't already available?
Jetcraft is the largest international buyer, seller and trader of business aircraft. Through our 55-year history, we have amassed a global presence, with more than 20 offices worldwide. Our sales directors know the local market, speak the local language and have facilitated numerous aircraft transactions in each locale. This unique global structure means we are positioned to provide regional on-the-round expertise and up-to-the-minute insight within any region, and we’re never more than a few hours away from one of our customers.
2. What is unique to Jetcraft unlike its competitors?
Jetcraft holds a unique position in the industry, situated between a traditional broker and a manufacturer. We have one of the world’s largest inventories of new and pre-owned aircraft, and we’re one of few companies with the resources to invest in owned aircraft, allowing us the ability take in trades and offer our customers a seamless transaction.
3. What advice would you give to a prospective jet buyer?
Don’t overlook the value of pre-owned aircraft. For some buyers, only a new aircraft will meet their needs. But, a pre-owned jet, especially five-years or younger, can offer a very similar product at a good value.
4. How many clients to do typically meet in a day?
At the risk of sounding clichéd, there really is no typical schedule in our line of work. I could spend time with one client or 20 depending on the day, but I do prefer to conduct face-to-face meetings as much as possible. Our connections are one of the many things that make working with Jetcraft so valuable - meeting in person and building relationships, will always be an extremely important part of our business.
5. How did Jetcraft begin? And how is the company planning to grow and innovate?
Jetcraft was founded in 1962 by Charles ‘Bucky’ Oliver, making it one of the oldest and well-established specialists. In 1987, the company began operating under the name Jetcraft, and I became co-owner in 2008. As international markets presented new opportunities for business aviation and large business jets became the preference, we grew from a primarily US-based organisation to an expanding international corporation, introducing operations in Russia, Dubai, Switzerland, Asia, Turkey, Australia, Africa and the UK.
We have facilitated hundreds of aircraft transactions, including more than 550 deals worth more than $10 billion in the last decade alone. Over the past 12 months, we’ve opened a new London HQ office and doubled the size of our European team. Looking ahead, our plan is to continue to cater exactly to the market’s demands without losing the intimate family that Jetcraft has always been and will remain to be.
We thrive on our rich history, experienced team and financial strength. But it’s our global reach that allows us to connect buyers and sellers across the world, help them find the best value and structure a seamless transaction. It’s simple in principle, but only feasible to do quickly and effectively if you have a solid network of offices and expertise in place.
Jetcraft Releases Fourth Annual 10-Year Business Aviation Market Forecast see more
NAFA member, Jetcraft, has released the findings from its fourth annual 10-year business aviation market forecast, building upon the 2017 prediction of a new business cycle of steady, healthy growth and expanding revenues.
Jetcraft, the global leader in business aircraft sales and acquisitions, is today releasing its fourth annual 10-year business aviation market forecast.
The annual market forecast reaffirms that steady growth in the private jet industry is set to continue, with predictions of 8,736 unit deliveries over the next 10 years, representing $271bn in revenues (based on 2018 pricing). North America will once again take the lead, accounting for 60% (5,241) of predicted new unit deliveries over the forecast period, with Europe expecting 18% (1,572), and Asia-Pacific 13% (1,136).
Jahid Fazal-Karim, Owner and Chairman of the Board at Jetcraft, says: “2018 has been a real turning point for business aviation, as we have now successfully navigated through our industry’s most difficult period. This year’s forecast predicts the continuation of our current business cycle of steady and healthy growth, driven by an increase in wealth creation and the demand for larger and more expensive aircraft.”
The increase in wealth creation over the past decade has spurred growth in family offices that are now offering a wide variety of specialized services, including business aviation. Together with the increase in block charter and fractional programs, this is exposing more UHNWIs to the industry than ever before.
However, despite continued economic growth, Fortune 500 companies have yet to return to historical aircraft transaction levels, due to maintaining a focus on other financial priorities, such as share buybacks and paying down debt. This customer segment is unlikely to restart aircraft purchasing programs until well into the cycle.
The forecast predicts that the large jet category, comprising super large, ultra long range and converted airline segments, will constitute 32% of total units (2,778) and 64% of total revenue over the next decade. All new aircraft model programs, both announced and projected, during the forecast period are exclusively widebodies.
Fazal-Karim adds: “Predicted unit deliveries in the large jet category account for a huge proportion of total revenues in the industry, demonstrating the trend towards larger, long range aircraft to support today’s global business needs.”
While the industry is set to embark on a period of substantial growth, its resilience during the challenges of the previous business cycle has prepared it well for expansion.
Fazal-Karim concludes: “We’re confident that the lessons we’ve learned over the past decade will ensure sustainable growth for business aviation in the years to come. Ours is an enduring industry, and one with a buoyant future ahead.”
Jetcraft’s full 2018 10-year Business Aviation Market Forecast is available to download here. Report graphs available for publication on request.
This market report was originally published by Jetcraft on October 10, 2018.