Business Jet Market to Touch $37.5 Billion Mark by 2030
The business jet market is expected to reach $37.5 billion by 2030, growing at a CAGR of 7.30 percent between 2020 and 2030.
The demand for business jets will increase by 8,750 aircraft at a CAGR of 6 percent. The demand for business jets had come down overall because of COVID-19. Travel restrictions in North America, the EU, and APAC had impacted both the supply and demand of business jets. However, the demand drop was not as steep as the commercial sector since safety-conscious travelers started opting for business jets. As lockdown restrictions are being lifted globally, the demand for business jets is expected to slowly recover. Companies are formulating strategies to restart their corporate travel in 2021. Also, organizers are gearing up with new policies and plans that can revive the industry once the pandemic is over.
When it comes to business jets, North America, Europe, and CIS are mature markets, while Latin America, Middle-East, Africa, and APAC are growing markets. The major drivers of the business jets market growth are new geographical models, technological advancements, and trade globalization. Rapid technological advancements in avionics, the addition of new models, the entry of new players in the business aircraft market, and growing economies are the major factors supporting the business jet market’s growth.
The COVID-19 pandemic showcased how useful private planes are when commercial aviation options are either eliminated or reduced in response to geopolitical or health emergencies. However, airport infrastructure and high taxes continue to be some of the major constraints in the business jets market.
As per the market outlook (2019-2027), in North America, the demand growth rate is 1-2 percent, and sales revenue is expected to be $150 billion. In Europe, the demand growth rate stands at 11-12 percent and sales revenue is expected to be $54 billion.
While wealth creation by high-net-worth individuals is leading to a 50 percent increase in lifestyle spending with correlation to private use of business aviation services, one of the biggest challenges is the recent political instability in several countries. Economic downturn and trade disagreements with NA are impacting business aviation.
Since entry and exit barriers are high in the industry, any new player entering the market will have to make a considerable financial investment in infrastructure and supply chain. The competitive rivalry in the business jets market is high because all top suppliers are trying to improve quality and innovation. Moreover, the number of players in the industry is also limited.
- Demand for corporate jets is high in North America, owing to the presence of a large number of high-net-worth individuals. Top OEM manufacturers are also present in this region.
- The demand has reached 85-90 percent of the pre-COVID levels in the last quarter of 2020.
- The recovery in the business jets industry is expected to be a V-shaped curve and faster than the commercial airline sector.
- A new set of high-net-worth individual customers and corporate users are choosing business jets to travel safely with social distancing.
- During the COVID-19 crisis, many aircraft cabins were arranged to carry life support equipment. This shows there is potential for growth in the configuration of Aircraft cabins.
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