After years of sluggish performance and poor growth, the aviation industry is poised for a really good year in 2015. Analysts are barely hiding their glee, and jet owners and aviation pros are beyond ready for some good news and excitement. What’s spurring this particular renewal? Three big changes.
Declining oil prices
Fuel is the single biggest expense for airlines — taking as much as 45 to 58% of their total costs. The price per barrel declined in 2014 and is expected to continue its downward slide in 2015. The lower fuel price is a gift for an industry that has recently gone through hard times.
But don’t get too excited. These low prices we’re seeing at the start of 2015 may not last — fuel prices could rise as quickly as they plunged. Smart airline managers would do well to take advantage of the temporary price fluctuation and bank those profits for later.
New aircraft technology
What could be more fun than some exciting new aircraft technology? Several innovative products are set to emerge this year. After multiple delays, two new airplanes are due to enter service:
- The Airbus A320NEO, aka the New Engine Option, and
- The Bombardier CSeries
The new engines are powered by the Pratt & Whitney Geared Turbo Fan (GTF) engine; the result of 20 years of research and development. The engine burns 16% less fuel and comes with 20% lower maintenance costs when compared to today’s engines.
Aerospace aficionados are also waiting breathlessly for the flight-testing of the Boeing KC-46A, a new aerial refueling tanker for the U.S. Air Force.
Signs of growth in aviation
After struggling through many sluggish years, the business aviation industry is finally showing some signs of growth. Contributing factors include the slow improvements in the U.S. economy, increased demand for pre-owned aircraft, and growing demand for business jet flight. Pre-owned jet inventories are at their lowest levels since 2008, and interest rates are at an historic low. Together, these factors provide an optimum climate for an all-round rebound for aviation.
A sustaining factor in the bright outlook for 2015 is the high number of new jet models coming out in the near-term. In the next five years, 18 new business jets are predicted to enter the market — giving waiting consumers a great reason to buy.
Contact L & L International if you need assistance in purchasing or selling a private jet.
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