Insightful Jet Utilization Trends

Mixed messages seem to be the order of the day when reporting on the progress ofbusiness aviation’s post-recession recovery, and so it is with recently released figures on business jet takeoffs and landings.

On a seasonally adjusted basis, cycles were 4% higher in the first four months of this year compared to the same period in 2013. Less encouraging is that, while the absolute number is about 30% above the trough in 2009, per-aircraft utilization rates are still near all-time lows on larger fleets. Moreover, utilization rates of older fleets (more than five years old) are still going down, offsetting a rebound of younger fleets (five years old or less) to pre-financial crisis levels, according to UBS analyst David Strauss.

There is a similar good-news/bad-news pattern in types of aircraft. The number of takeoffs and landings went up across all three cabin classes, led by a 7% increase in flights by long-range aircraft. In fact, long-range business jet cycles are near their pre-recession peak, according to Strauss. But short- and mid-range jet cycles are running 15-20% below.

Which manufacturer’s business jets sequentially were being utilized the most through April? Glad you asked.

Integrity Financial Groups

Business jet cycles (takeoffs and landings) appear to be creeping up, if ever so slightly, from a year ago. They are showing the most improvement among long-range aircraft, such as the large-cabin G550.

Embraer took first place, with an increase of 8%. Tied at 3% were Bombardier, Cessna, Dassault and Hawker. Trailing far behind was Gulfstream, whose aircraft in the first four months were utilized a scant 1% more than in the first four months of last year.

The data is courtesy of the Federal Aviation Administration. To put it into perspective, consider the utilization rates in Europe in April. Strauss’ analysis indicates that business jet flight activity there is lagging behind the U.S. and drifting steadily lower. European cycles were 2% lower than they were in April 2013.

“A sustained recovery in business jet utilization is necessary to drive improvement in the new-aircraft cycle,” according to Strauss. He sees the market as “oversupplied,” a condition he believes will continue until there is a more meaningful recovery in utilization.

To read the full article, click here.

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