Aviation Industry

With roughly 20,000 business jet aircraft in service, corporate aviation is a worldwide economic factor. New and used aircraft transactions approached $30 Bn in 2019, and are forecast to exceed $35 Bn in 2025.

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According to a recent National Business Aviation Association study, the economic impact of business aviation in the US is $65 Bn, and worldwide activity is roughly $100 Bn. The fastest growing sector in corporate aviation is in the long range segment. As corporate development drives expansion of businesses throughout the world, mobility requirements constantly grow.

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The largest manufacturers of long range, large cabin corporate aircraft are Bombardier, Dassault and Gulfstream Aerospace, followed by Boeing and Airbus. Currently, Bombardier’s Global 5500, 6500 and 7500 models, together with Gulfstream’s 500, 600 and 700 are competing for the lion’s share of new orders from operators requiring worldwide transportation tools. In the rarified atmosphere of VVIP conversions of commercial aircraft, Boeing’s 737 variants and Airbus ACJ 318 and 319 variants address head of state and very specialized individual requirements for aircraft having larger capacity than corporate business aircraft offerings provide. Airbus has also announced a corporate variant of the 220 with 5,500 NM range, and this will generate demand in a new segment.

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Textron’s Cessna unit has decided on careful development of offerings in the super-mid size arena, and is not expected to be in the long range category for another ten to fifteen years. The multi-$Bn investment required for product development to complete with the predominant manufacturers is a wide moat preventing all but the most determined new entries.

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As followers of aviation will be aware, various technological advances have dramatically shaped the evolution of both commercial and corporate aviation in the 21st century. The magic of high speed, high altitude flight is driven by fluid dynamics, by aircraft weight and by efficient propulsion. Engineering developments in wing and fuselage shape have contributed to increases in performance this century, and Dassault, Bombardier and Gulfstream are utilizing engineering which did not exist fifteen years ago. Similarly, each of these manufacturers has evolved composites usage in construction of both wing and fuselage structures in current product. The benefits are in weight reduction, labor reduction and in consistently improving control of product quality. Turbine propulsion systems development has contributed equally to increases in performance and in specific fuel consumption, allowing the longest range aircraft now available to fly 1,000 to 1,500 NM further than the range equivalent top tier equipment could achieve a decade ago.

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These technological developments create issues of their own, and understanding the maintenance and reliability complexities deriving from newly introduced technology is a critical aspect of CAHC’s advisory services to its clientele. Our clients rely upon CAHC to be aware of fleet developments which would affect operator thinking on acquisitions, and CAHC strives to maintain industry intelligence which is of material value to its client base. Understanding new technologies and their application is critical to our advisory services.