Here are a few data points regarding the economic forecasts for the charter and business jet segments. 2013 will be a year of slow, but steady recovery.

Charter and Fractional Ownership Consolidation

“It would seem that modest growth will be seen by those who are innovative and flexible.  There has been great consolidation, in charter and fractionals,” states Global Aviation President, Flo Newton. “Many factors are impacting the fractional ownership of aircraft, which may force some fractional clients to move to aircraft charter. There is less flexibility in fractional ownership than before. Costs are high and contracts limiting, when one is involved in the fractional ownership of a depreciating aircraft.”

UK based, Air Partner, a charter brokering group, predicts that there may be increased charter demand in 2013 from corporate customers, many of whom owned aircraft before the 2008 economic downturn.

Business Jet Market-No Major Change

According to the December Aerospace and Defense Business Jet Monthly report from J.P.Morgan, the business jet cycle is “still stuck in neutral.”

The indicators point to a frustrating lack of growth:

  • Slight increase in business jet deliveries: 628 business jet deliveries forecast for 2013 with 750 deliveries in 2014 and 856 in 2015
  • Used market inventories nearly the same at the end 2012 as at the beginning
  • Used aircraft pricing still declining
  • Flight operations showing little or no growth
  • Emerging markets show demand for business jets moderating

FBO Growth

“We know from our own experience that FBO’s are facing a reduction in margins,  which requires differentiation based on other criteria, such as service,” comments Flo Newton. “Global Aviation has always had a culture based on providing superior service and amenities. We have always known that competing on price alone does not build long term relationships and loyal clients.”

FBO industry consultants, Aviation Business Strategies Group, presented at the recent Schedulers and Dispatcher’s Conference in San Antonio, Texas. Their message was growth in the range of 4-6 percent but only through the practice of differentiation. They predict a slight increase in charter and flight department hours flown, but more efficient aircraft and fuel tankering will continue to make growth difficult.





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