|May 2014||70||Noealt Corporate Services||ASDR-107066|
1. Industry Backdrop & Overview: Global Business Aviation Industry Continues to Make Steady Strides on Recovery Path with Strong Growth Projections over Medium Term led by ongoing Economic Recovery across Traditional Markets & Shifting Global Industry Dynamics.
The Global Business Aviation Industry continued steadily on the recovery path with the Business Jet shipments growing by 1% for 2013; standing at 678 units as against 672 for 2012 spearheaded by the large-cabin, long-range aircraft segment which registered record aircraft deliveries and accounted for almost 41% of the shipments in 2013 with a tremendous year on year growth rate of 18%. The total aircraft billings across the business & general aviation sectors grew by 24% in 2013 and stood at $23.4 billion as compared against the industry peak & pre-crisis level of $25 billion in 2008 thus underscoring the growing significance of aircraft billings over shipment numbers as the true indicator as well as measure of industry growth with the focus on value rather than mere volume. In terms of markets, the North American market accounted for about 52% of total business jet deliveries in 2013 as against 49% for 2012 with the reduced delivery numbers in Europe.
The growth of the large-cabin, long-range segment has been extremely favourable for the industry’s Top 3 OEMs, namely, Gulfstream, Bombardier & Dassault, who continue to grow their share of the global business jet market, especially, Gulfstream which has been able to catapult itself to the top outmanoeuvring Bombardier with the strategic introduction & ramping up of G650 production in 2013. Bombardier, however, still leads the OEM pack in terms of aircraft deliveries while Gulfstream claimed the top spot, in terms, of aircraft billings for 2013. The light & mid-size jet segments on the contrary continue with their contractionary trend impacting Cessna severley & Embraer mildly. Fleet utilization levels for business jets, however, have remained decent driving growth for the MRO activity with OEMs focusing on strengthening & extending their global MRO network with increasing utilization beyond traditional markets.
The global business jet industry, recovering from the economic crisis, is projected to register significant growth & demand resurgence from 2014 onwards with the industry projected to reach pre-crisis demand levels by 2016 driven by strong, continued economic recovery underway across the U.S. & European markets & growing demand from emerging markets led by China which is projected to become a strategic market for busienss aviation over medium term. IMF projections indicate towards 2% GDP growth for traditional markets for 2014 as against 1.2% in 2013 led by the U.S. economy which is estimated to grow at 3% in 2014. The ongoing industry recovery is also likely to be bolstered by pent up replacement demand in the North American market which is likely to show up with improving economic conditions & indicators. New aircraft program introductions by all key global OEMs are also likely to spearhead industry growth over near to medium term incorporating cutting-edge technologies delivering enhanced performance features, specifications as well as optimized aircraft operating economics. Key business jet programs scheduled to enter service in 2014 include Bombardier’s Challenger 350 in the super mid-size & Learjet 85 in the midsize segments respectively besides Cessna’s Citation X+ and Embraer’s Legacy 500.
Further, the potential opening & expansion of Chinese low-altitude airspace by the Chinese civil aviation authorities & the pursuit of civil aviation reforms are likely to give a significant fillip to the civil aviation sector in China with the country projected to catapult itself to become the world’s third largest market for business jets over the next decade with estimates by Bombardier indicating towards delivery of about 1,000 business jets likely to be made to China through 2022. Consequently, most global OEMs are in the process of establishing & strengthening existing presence as well as support infrastructure to capitalize effectively on the anticipated growth wave.
2. Report Overview & Rationale:
The report analyzes the Strategic Positioning, Priorites & Responsiveness besides providing Strategic Insights into the Key Strategies & Plans being conceptualized & pursued by the 5 key global industry OEMs (Gulfstream, Bombardier, Dassault, Cessna, Embraer) for medium term to navigate their way through the asymmetric demand trends & cycles across global markets in sync with the emerging industry dynamics and to capitalize on potential growth opportunities effectively. The OEMs have been focusing on the development of new aircraft platforms featuring cutting-edge technologies delivering optimized performance & operating economics to stimulate demand, strengthening and extending their global sales, service & support infrastructure with a strong focus on the Asia-Pacific region with some OEMs even establishing or considering plans to establish their industrial footprint in the APAC region besides forming as well as strengthening strategic alliances & JVs in wake of the opening of the Chinese low altitude air space as the potential window of opportunity to drive growth over near to medium term with a significant share of global demand for new aircrafts likely to emanate from the Asia-Pacific region over medium term.
3. Relevance & Usefulness: Provides Inputs for Incorporating into Broader Strategic Planning & Decision-Making Process.
The report will be useful for:
• Key Inputs for Strategic Planning & Decision-Making Process
• Competitive Analysis & Strategic Benchmarking Exercise
• Comprehensive Strategic & Competitive Assessment & Analysis for each key OEM
• Strategic Insights into key Business Strategies & Plans being pursued by each key OEM
• Gaining a Strategic Perspective on the Business & Strategic Outlook for all key players for 2014
• Gaining access to Key Industry Trends & Insights; Crucial Inputs for Decision-Makers
• Identification & Analysis of Potential Growth Opportunities & Avenues
• Gaining access to Key Industry Issues, Challenges & Risk Factors
• Identifying & highlighting areas for making Strategic Changes, Adjustments & Realignment
• Analysis of Forces Driving as well as restraining the Industry & their overall Dynamics
• Gaining a Strategic Perspective on the Industry’s Strategic Outlook for 2014
4. Report Excerpts:
1. Comprehensive Analysis of Bombardier’s Strategy of Gradual Diversification of its Global Industrial Footprint, Significant Strengthening of Regional Presence in the Asia-Pacific and Plans to Take on Gulfstream for Leadership of the Global Business Aviation Market.
2. Analysis of Gulfstream’s Product Portfolio Strategies, Plans for Capacity Expansion, Continued Strategic Focus on Expansion of its Services Business and Strengthening of Global Presence & Support Network with specific focus on Emerging Markets, especially, China.
3. Analysis of Cessna’s Product Portfolio Strategies.
4. Insights into Dassault’s Pursuit of the Technology & R&D Driven Product Differentiation Strategy.
5. Analysis of the pursuit of Adjacent Segment Growth Strategy by industry OEMs.
6. Reinforcement & Expansion of Global Service & MRO Support Footprint by Industry OEMs in-sync with utilization trends.
7. Potential Opening & Expansion of Chinese Low-Altitude Airspace & Pursuit of Reforms in the Civil Aviation Sector to be a Key Window of Opportunity for the Global Business Aviation Industry.
8. Analysis of Key Technological Trends Shaping the Future of the Industry.
5. For Whom: Key Decision-Makers across Industry Value Chain
The report would be essential for those having strategic interest in the Global Business Aviation Industry & will be especially useful for Key Decision-Makers, Top Management of Companies, OEMs, Suppliers, Distributors, Vendors and other Key Players in the Industry Value Chain as well as existing & potential Investors, Industry & Company Analysts, PE Firms, Venture Capitalists & those associated with the Industry.
6. Report Highlights: Visual Representation/rientation with a Slide based Architecture
The report is comprehensive yet concise & compact at the same time; is custom-built for meetings & presentations with visual representation & orientation emanating from a slide based architecture, being built on the Microsoft PowerPoint platform; in addition, to being a ready self-reckoner as well as a quick reference guide driving, enabling & ensuring prompt and informed decision making.
7. Key Takeaways: Enhanced Scope of Utilization & Application with Visual Representation
This PowerPoint architecture based report provides high readability & ease of navigation and saves significant amount of time by saving the end-user the effort of sifting through voluminous pages of text besides enhancing the scope of retention, utilization & application of analysis with visual representation and incorporation of relevant images to support & supplement the analysis.