By Allison Lampert
LAS VEGAS (Reuters) – Planemakers unveil new orders and new 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 a personal format in Las Vegas on Tuesday, testing the strength of jet demand following the outbreak of COVID-19. The show will also shed light on the resilience of the aerospace supply chain in the face of tight logistics around the world.
Brazil’s Embraer said Monday morning it had signed a contract to sell 100 Phenom 300E aircraft for more than $ 1.2 billion at list prices to NetJets with shipments beginning in 2023.
The US aircraft manufacturer Textron Aviation announced updates for the models of its two Cessna Citation jets M2 and XLS.
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. That fills seats for private operators and builds order backlogs with aircraft manufacturers, strains the supply of jets, spare parts and pilots.
Craig Ross, head of the California-based Aviation Portfolio, a consultant to business jet customers, said he has seen cases of flights being canceled due to lack of pilots and delays due to a lack of aircraft parts for maintenance.
It does so in an industry that charges the highest price for reliability, with some private operators turning down business to protect the service.
“Everyone’s going to 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.”
A top provider, Honeywell International Inc, forecasts a 50% increase in flight hours for business jets in 2021 compared to the previous year.
Gulfstream Aerospace of General Dynamics Corp, 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 flying penthouses.
The story goes on
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.
Foley said he anticipates around 700 business jet deliveries in 2021, with a production ramp-up 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 Eric Martel, Chief Executive of Bombardier, in a recent interview.
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; Additional reporting by Shreya Raj in Bangalore; Editing by Steve Orlofsky and Peter Cooney)
