Global Business Jet Market Faces Uncertain Global Environment

According to a ReportBuyer analysis, the global business jet market continues to face and brave a challenging, complex and uncertain global macroeconomic environment marked by ongoing political instability, conflict and war operations across some parts of the world, a growing threat from terrorism and extremism globally, significant downturn in the global energy sector impacting oil driven economies significantly and economic weakness. In addition, difficult conditions prevail across key emerging economies with BREXIT being the latest event to add further to the uncertainty with all the factors collectively impacting the global demand for business jets, which traditionally has a strong correlation with global economic cycles.

The report notes that OEMs continue to face significant competitive intensity in a difficult market scenario and are engaged in a virtual pitched battle over pricing in an oversupply driven market scenario with additional pressures from pre-owned aircraft inventory. A sustained low oil price environment, however, has been favorable boosting fleet utilization and profitability across operators while driving aftermarket sales and services revenues for the industry OEMs.

The global market for business jets registered a slight 1.6% gain in year-on-year deliveries for 2015 with a late comeback in the year. The market, however, registered a 4.3% decline in new business jet deliveries in the first half of 2016 while registering a 19% drop in aircraft billings with the number standing at $7.6 billion (for the top five industry OEMs), thus, taking the market all the way back to the first half of 2012 level effectively, in terms of shipments.

One of the most significant trends, however, is the comeback made by the triad of light and medium jet segment focused OEMs, Cessna, Embraer and Dassault, all of which gained ground in terms of aircraft billings in the first half of 2016, registering slight to moderate increases over numbers from the first half of 2015 at the expense of Bombardier, which witnessed a whopping 40% drop in aircraft billings along with a sharp decrease in overall aircraft deliveries as well.

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