Large-cabin business jet demand could drop 20 percent later this year as a result of the Covid-19 pandemic, while the light and midsize segments could âhit a new low,â according to Teal Group v-p of analysis Richard Aboulafia. âWatch fuel pricesâresource-rich countries and energy-extraction companies drive large-cabin demand, so that segment will likely be hit the hardest,â he said. âLarge cabins are clearly in very dangerous territory. All of the market indicators are either orange or red.â
Aboulafia expects the light and midsize business jet segments to be down only modestly from current demand since they never really recovered from 2008. âFor the past decade I've argued that we're not at risk of a small-/medium-cabin downturn, because we never had any kind of sustained post-2009 recovery,â he told AIN. âWe're about to see if I was right. I'm starting to suspect that I was not right.â
Meanwhile, the anecdotal upsurge in private aviation demand âwhenever something bad happens to airlines [pandemic or terror]âŚhas never proven to be sustainable,â Aboulafia added. âIn fact, business jet demand gets clobbered by crashing equities markets and corporate profits.â
As far as manufacturers, "Bombardier looks uniquely vulnerable in the business jet industry," he said. "Theyâre overwhelmingly reliant on high-end jets, with no exposure to defense markets. Two months ago, this wasnât a problem, but it now looks bad."