By Allison Lampert
LAS VEGAS (Reuters) – Planners are likely to unveil new orders and models at the world’s largest business jet show this week to capitalize on a boom in personal travel, but executives are warning of headwinds from capacity constraints.
The National Business Aviation Association (NBAA) show returns to personal format in Las Vegas on Tuesday, testing the strength of jet demand following the outbreak of COVID-19. The fair also sheds light on the resilience of the aerospace supply chain in the face of tense logistics around the world.
The easing of travel restrictions and the lure of private flights have resulted in an unexpected surge in business aviation, with traffic increasing from 2019 levels. This fills seats for private operators and builds order backlogs from aircraft manufacturers, and puts pressure on the supply of jets and pilots.
Companies that laid off workers or delayed orders during the pandemic are now scrambling to find planes and staff, reflecting a problem facing some airlines, executives said.
This has resulted in flight cancellations and delays in an industry that charges top prices for reliability, leading some private operators to turn down business to protect service.
“Everyone will be talking about the same thing: how do we deal with this demand,” said Ian Moore, chief commercial officer for private jet company VistaJet.
“I’m sure that will be an issue at every booth and cocktail party in Vegas this year.”
Honeywell, a leading provider, forecasts a 50% increase in flight hours for business jets in 2021 compared to the previous year.
Gulfstream Aerospace of General Dynamics, one of the largest manufacturers of business aircraft, is not participating due to COVID-19. The US aircraft manufacturer recently announced two new jets, with its larger G800 clashing with Bombardier Inc’s Global 7500 and Dassault Aviation SA’s 10X in a battle of the flying penthouses.
It’s a boon for private aviation, which has not yet bounced back on the 1,300 aircraft that were delivered before the financial crash in 2008, aviation analyst Brian Foley said in a recent statement.
The story goes on
Foley said he expects around 700 business aircraft deliveries in 2021, with production expected to begin in 2022 as aircraft manufacturers are confident the increase will be sustainable.
While Cessna business jet maker Textron Aviation is ramping up production to meet demand despite supply chain challenges, Canada’s Bombardier waits to see how orders develop.
“We have built up the order backlog and I think it’s good that the price is firming up again. But it’s a question of supply and demand, ”said Bombardier boss Éric Martel in a recent interview. “We have to see what will happen in the next few months.”
Some aircraft manufacturers are looking for signs of a bubble, similar to the demand before the 2009 economic crash that left them hooked with unsaleable jets, said a manager of a corporate jet manufacturer who spoke on condition of anonymity.
“Some wonder, is it real or is it back in 2007?”
(Reporting by Allison Lampert in Las Vegas, Nevada; Additional reporting by Shreyasee Raj in Bangalore; Editing by Denny Thomas and Chris Reese)
