A lifelong aviation enthusiast who joined&nbsp;AIN&nbsp;in 2007, Curt came to&nbsp;the publication&nbsp;from the broadcast industry where he was a national science and technology television reporter and producer. He writes on the FBO field, aviation finance, and sustainable aviation and occasionally contributes to&nbsp;AIN&nbsp;sister publication&nbsp;Business Jet Traveler. Curt was a member of the AINtv reporting staff that won the 2008 Aerospace Journalist of the Year award for Best Airshow Daily. That same year, he was a finalist for another AJOYA award. He earned an AJOYA for Best Business Aviation Submission in 2018 and was a finalist in that category in 2021. He received the National Air Transportation Association’s&nbsp; Aviation Journalist Award in 2012 and won a Pegasus Sapphire Business Aviation Award for outstanding journalism in 2021.
Before joining AIN, Curt worked with&nbsp;Consumer Reports’ television division, CRTV, and for several local television news staffs. An honors graduate of the State University of New York at Stony Brook, he earned a master’s degree in broadcast journalism from Boston University in 1995. Curt lives in New York State with his wife and two young sons.

Business Aviation Services Editor

Curt Epstein

After a long stretch in the doldrums, the business jet market is beginning to see a return to normalcy in some sectors, according to a forecast from aircraft brokerage Jetcraft. The North Carolina-based company has dialed back its guess about the number of business jet deliveries for the next 10 years by 10 percent (to 7,879 worth $248 billion, from 8,755 in its inaugural forecast issued last year), but chairman Jahid Fazal-Karim believes solidity is returning to the market in some areas. With 72 transactions valued at $1.7 billion, 2015 was the strongest year in Jetcraft’s 50-year history, and the company says it is on pace to improve on that performance this year.&nbsp;

 


Historically, demand for new business jets outside North America has accounted for 30 percent of deliveries, but over the past decade that changed, with non-North American markets accounting for half of the deliveries in the boom years of 2007 and 2008; the demand was fueled by high oil and gas prices and favorable exchange rates against the U.S. dollar.

 


Jetcraft’s forecast sees a continuing return to the historical model as those conditions have reversed, with BRIC countries in particular cooling. Through 2025, the company sees North America accounting for 60 percent of new bizjet deliveries (4,727 aircraft), up six percentage points from last year’s forecast. While Europe’s share of the delivery forecast grew by one percent year-over-year, the overall tally declined to 1,182 aircraft from 1,225. The report notes that short-term deliveries will be hampered as the contribution of the emerging market economies wanes in response to lower oil and gas prices and less favorable U.S. dollar exchange rates, indicating that gains worldwide will come at the expense of Latin America, Asia-Pacific and Russia/CIS, which see a decline of 7 percent in this year’s forecast. Projected demand in the Middle East and Africa remains stable at three percent each for the next 10 years, according to Jetcraft.

 


“When other markets are down and North America is up, it balances our market overall,” said Jetcraft president Chad Anderson, highlighting the good news in the report. “Emerging markets are extremely important, but we see North America continuing to lead the pack in terms of demand over the 10-year period.”

 


The company predicts that Gulfstream will earn the lion’s share (30.6 percent) of the market’s revenue, benefitting from its expanded line of large-cabin aircraft. Bombardier will place second with 28 percent of market revenue, but Textron subsidiary Cessna will benefit from robust demand and regain deliveries leadership from Bombardier.

 


<h2>Continuing Development</h2>

 


“If you look at light, medium and large jets, the unit count is similar across all those product sizes, so it’s a nice diversity of clientele,” Anderson told AIN. “What that tells some of us in the resale business is that light jets are still healthy; this is important because people usually enter the market with a smaller aircraft.”

 


The forecast calls for delivery of 688 business jets this year, rising steadily to a peak of 932 in 2021, before the next trough of 693 deliveries in 2024.

 


Jetcraft sees aircraft manufacturers increasingly focusing their research and development budgets on higher-end products. “This is the OEMs who do a good job of listening to their installed base of clients, telling us that the world is still favoring larger-cabin aircraft in general terms, so you are seeing that segment grow in activity and deliveries over the life of the forecast,” said Anderson. “As businesses get more global, there’s more demand to go beyond North American shores. The OEMs are investing millions and millions of dollars in that larger class of aircraft for the foreseeable future.”

 


This investment will result in a new crop of business jets entering service, ramping up through the next 10 years. Jetcraft predicts the Bombardier Global 7000 will enter service in 2018, followed a year later by the Global 8000. It predicts a new Gulfstream flagship, the G750, will debut in 2020; Cessna’s Hemisphere will arrive on the market in 2022; and a Dassault Falcon 9X, Embraer Legacy 700, Bombardier Challenger 700 and Gulfstream G400 will be introduced in 2023. “To me that’s an exciting part of our next few years,” said Anderson, “really nice products coming out of a diversity of manufacturers. That in itself will create replacement energy.”

 


The report, which assumes a slowdown in global wealth creation, an outflow of ultra-high-net-worth individuals from emerging market economies and continuing depressed oil prices, is tempered by potential growth in the U.S. economy and a greater need for corporate capital expenditure investment. Unpredictable variables such as terrorism and the migrant crisis remain threats that could destabilize the forecast, the authors point out.

 


<h2>&nbsp;The Pre-owned Market</h2>

 


While Jetcraft notes that the inventory of jets for sale remains below the 13 percent benchmark, there is little evidence that residual values for five-year-old aircraft are on the rise. According to Anderson, most new aircraft purchased in the last five years came at a discount, a practice he believes continues in some cases today. “Go back to that spike in 2008-2009 when financial institutions and major institutional investors were making large purchases and aggressively anticipating residuals that were not sustainable,” he explained. “There once was a time when airplanes just increased in value, but that was not sustainable. There’s a natural depreciation schedule that is more reasonable, driven by the economic lifecycle of the equipment.”&nbsp;

Jetcraft Sees Strengthening of U.S. Bizjet Market

In its second annual forecast, the broker notes the continuing malaise in emerging markets. 

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