Business Aviation 2017: Year-Ending Record-Breaking Boost
Business aviation had a strong year in 2017 — record-breaking, in fact. According to the Jet Support Services Inc. (JSSI) 2017 Business Aviation Index, the fourth quarter was the busiest in more than a decade. Is this a sign that industry analysts expect the post-2008 business aviation recovery to continue as we move further into 2018?
What do the numbers mean?
The JSSI Business Aviation Index tracks worldwide business aircraft flight activity, including that of jets, helicopters, and turboprops. In the report, JSSI president and CEO Neil Book said flight hours typically drop by 4% in fourth quarters but, in 2017, flight hour use dipped only 0.4%. He added that business flight activity is often a good indicator of the economy’s general status because it is a key tool for carrying out so many core business activities.
Here are some key JSSI findings for various business aviation industry sectors:
- Average flight hours increased 6.1% year-over-year and 4.5% year-to-date.
- Fourth-quarter aircraft utilization hours were the highest on record for any fourth quarter and flight hours were the highest in 10 years.
- Consumer goods, construction, health services, business services, and real estate sectors all saw increases in flight activity, whereas manufacturing, aviation, financial services, as well as power and energy sectors decreased.
- All regions except the Middle East had year-over-year increases in business flight activity.
These trends, although somewhat mixed, show a general increase in business aviation use in most business sectors and regions, which points to an increasingly healthy industry and global economy.
Looking forward
Due to the improving global economy, growth in the stock market, and recent tax legislation, the business aviation market will likely continue its upward trend. And so far, business activity stats for the start of 2018 seem to point in that direction, too.
According to ARGUS TRAQPak business aviation data, business aircraft activity in the U.S. and Canada was up 3.5% in February year-over-year, and analysts expect to see a 4.2% rise in March. Part 91, or noncommercial aircraft activity, rose 0.7% while fractional aircraft activity slipped 0.6% from last year at this time. Large-cabin jets showed the highest activity gain, followed by midsize jets with a 3.6% increase, then light jets up 2.3%.
Although the pilot shortage is still a concern for those in the industry, stabilizing oil prices, favorable tax conditions including the 100% depreciation write-off, and the general health of the economy should help the business aviation market continue its recovery. With the still-low prices on used aircraft, and as costs continue to firm up, more and more business leaders will be able to venture into the market to take advantage of business aviation benefits. And the growing charter markets will allow a younger segment of the population to get away from the hassles and restrictions of commercial flight and into the once out-of-reach experience of private aviation.
So, although struggles will still likely exist, the industry outlook is good and recovery likely to continue. To stay abreast of these changes, savvy business aviation insiders will pay attention to the markets and industry reports, and those thinking of purchasing new or used jets — or selling their own — should seek expert advice.
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