Published by maria gbaf
Posted on October 12, 2021
By Allison Lampert
LAS VEGAS (Reuters) -Planemakers are unveiling new orders and fresh models at the world’s largest business jet show this week as they aim to cash in on a boom in private travel, but executives warn of headwinds due to a capacity crunch.
The National Business Aviation Association (NBAA) show returns to an in-person format starting in Las Vegas on Tuesday, testing the strength of demand for jets following the emergence of COVID-19. The show will also shed light on the resilience of the aerospace supply chain, given strained logistics worldwide.
Brazil’s Embraer said on Monday morning it signed a deal to sell 100 Phenom 300E planes for more than $1.2 billion at list prices to NetJets, with deliveries starting in 2023.
U.S. planemaker Textron Aviation announced updates to the models of two of its Cessna Citation jets, the M2 and XLS.
Easing travel restrictions and the lure of private flights have led to an unexpected surge in business aviation, with traffic rising from 2019 levels. That is filling seats for private operators and expanding order backlogs for planemakers, straining the supply of jets, parts and pilots.
Craig Ross, head of California-based Aviation Portfolio, an adviser to business jet clients, said he is seeing cases of flights getting canceled because of a lack of pilots and delays from a shortage of plane parts for maintenance.
That is occurring in an industry that charges top prices for reliability, with some private operators turning 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 of private jet company VistaJet. “I’m sure that’s going to be a topic at every booth and every cocktail party in Vegas this year.”
One top supplier, Honeywell International Inc , is predicting a 50% rise in business jet flight hours in 2021 over last year.
General Dynamics Corp’s Gulfstream Aerospace, one of the largest business jet makers, is not participating due to COVID-19. The U.S. planemaker recently announced two new jets, with its larger G800 set to clash with Bombardier Inc’s Global 7500 and Dassault Aviation SA’s 10X in a battle of flying penthouses.
It is a boon for private aviation, which has yet to rebound to the 1,300 aircraft delivered in 2008 before the financial crash, said aviation analyst Brian Foley in a recent note.
Foley said he expects around 700 business aircraft deliveries in 2021, with a ramp-up in production expected to begin in 2022 as planemakers gain confidence the surge is sustainable.
While Cessna business jet maker Textron Aviation is raising production to meet demand despite supply-chain challenges, Canada’s Bombardier is waiting to see how orders evolve.
“We’ve rebuilt backlog and I like that price is re-firming. But it’s a question of supply and demand,” Bombardier Chief Executive Eric Martel said in a recent interview.
Some planemakers are watching for signs of a bubble similar to the demand ahead of the 2009 economic crash, which left them on the hook with unsellable jets, said an executive at one corporate jet manufacturer who spoke on condition of anonymity.
“Some are wondering is it real or is it 2007 over again?”
(Reporting By Allison Lampert in Las Vegas; Additional reporting by Shreyasee Raj in Bangalore; Editing by Steve Orlofsky and Peter Cooney)
By Allison Lampert
LAS VEGAS (Reuters) -Planemakers are unveiling new orders and fresh models at the world’s largest business jet show this week as they aim to cash in on a boom in private travel, but executives warn of headwinds due to a capacity crunch.
The National Business Aviation Association (NBAA) show returns to an in-person format starting in Las Vegas on Tuesday, testing the strength of demand for jets following the emergence of COVID-19. The show will also shed light on the resilience of the aerospace supply chain, given strained logistics worldwide.
Brazil’s Embraer said on Monday morning it signed a deal to sell 100 Phenom 300E planes for more than $1.2 billion at list prices to NetJets, with deliveries starting in 2023.
U.S. planemaker Textron Aviation announced updates to the models of two of its Cessna Citation jets, the M2 and XLS.
Easing travel restrictions and the lure of private flights have led to an unexpected surge in business aviation, with traffic rising from 2019 levels. That is filling seats for private operators and expanding order backlogs for planemakers, straining the supply of jets, parts and pilots.
Craig Ross, head of California-based Aviation Portfolio, an adviser to business jet clients, said he is seeing cases of flights getting canceled because of a lack of pilots and delays from a shortage of plane parts for maintenance.
That is occurring in an industry that charges top prices for reliability, with some private operators turning 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 of private jet company VistaJet. “I’m sure that’s going to be a topic at every booth and every cocktail party in Vegas this year.”
One top supplier, Honeywell International Inc , is predicting a 50% rise in business jet flight hours in 2021 over last year.
General Dynamics Corp’s Gulfstream Aerospace, one of the largest business jet makers, is not participating due to COVID-19. The U.S. planemaker recently announced two new jets, with its larger G800 set to clash with Bombardier Inc’s Global 7500 and Dassault Aviation SA’s 10X in a battle of flying penthouses.
It is a boon for private aviation, which has yet to rebound to the 1,300 aircraft delivered in 2008 before the financial crash, said aviation analyst Brian Foley in a recent note.
Foley said he expects around 700 business aircraft deliveries in 2021, with a ramp-up in production expected to begin in 2022 as planemakers gain confidence the surge is sustainable.
While Cessna business jet maker Textron Aviation is raising production to meet demand despite supply-chain challenges, Canada’s Bombardier is waiting to see how orders evolve.
“We’ve rebuilt backlog and I like that price is re-firming. But it’s a question of supply and demand,” Bombardier Chief Executive Eric Martel said in a recent interview.
Some planemakers are watching for signs of a bubble similar to the demand ahead of the 2009 economic crash, which left them on the hook with unsellable jets, said an executive at one corporate jet manufacturer who spoke on condition of anonymity.
“Some are wondering is it real or is it 2007 over again?”
(Reporting By Allison Lampert in Las Vegas; Additional reporting by Shreyasee Raj in Bangalore; Editing by Steve Orlofsky and Peter Cooney)
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