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The world business aircraft fleet is growing, delivery rates are increasing and backlogs are building

If this year’s Flight International Cor­p­orate Aircraft Census is a barometer for the business-aviation industry, manufacturers are justifiably bullish. Reinforcing the recovery in general aviation, the world’s turbine fleet has risen over the past 12 months as consumer confidence is restored, boosting aircraft orders and backlogs.

This annual census compiled by Flight International’s sister data organisation Av­Soft gives a clear picture of the growth trends in the corporate aircraft industry from 1 October 2004 to 30 September 2005. The world’s turbine business aircraft fleet has nudged ahead by just over 5% to 22,986 jets and turboprops compared with 21,735 aircraft in last year’s census. For the first time in years the gap between the jet and turboprop fleet has narrowed as turboprops sales enjoy a renaissance. In the past 12 months numbers have risen by 6% from 9,160 to 9,732 and the worldwide jet fleet has climbed by 4.5% from 12,690 last year to 13,254.

Cessna, unequivocal market leader in both deliveries and in-service jet fleet numbers, had another impressive year, with the in-service inventory rising by 196 Citations to 4,290 – nearly 19% of the worldwide turbine fleet. This year’s include 37 mid-size Sovereigns, 69 super-mid-size XLSs and 29 CJ3 light jets, deliveries of which began late last year. The new CJ1+ and CJ2+ light jets also appear in the census for the first time as deliveries begin in earnest this quarter. The outlook is also bright as Cessna has a net order intake so far this year of 230 Citations, 71 of which were recorded in the third quarter alone. The company plans to deliver 240-245 Citations this year compared with 181 in 2004.

Gulfstream’s in-service fleet has climbed from 1,287 to 1,347 aircraft, including 28 G550s, more than double last year’s tally, and 10 large-cabin G450s, which along with the G350 and G500 makes its census debut. Parent company General Dynamics says Gulfstream delivered 46 large aircraft (G350, G450, G500 and G550) and 19 mid-size jets (G100 and G200) in the first three quarters of this year versus 41 large jets and 16 mid-size jets in the same period last year.

Bombardier’s business jet inventory climbed from 2,828 to 2,884 aircraft over the past year. While the Learjet 40XR and super-large Global 5000 make their census debuts with a smattering of deliveries, fleet numbers of the super mid-size Challenger 300 have escalated by over 150% from 17 to 44 aircraft. The updated Learjet 60SE introduced late last year has, however, been slow to gain market acceptance, with only two in service to date.

With a relatively limited offering in only three or four segments of the market, Dassault experienced a less impressive growth in its in-service Falcon fleet over the past 12 months, from 1,461 to 1,474 jets. The growth rate is expected to increase with the introduction in 2007 of the ultra-long-range 7X, for which over 50 orders have already been chalked up.

For the traditional regional aircraft makers that have begun to carve a niche in the corporate aircraft arena with their large-cabin types, the past 12 months has bought mixed fortunes.

Popular Legacy

Brazil’s Embraer has made a marked improvement in corporate fleet numbers, doubling its tally in the last 12 months from 30 to 60 aircraft. This is boosted by the increasing popularity of its ERJ-135-based Legacy corporate jet, for which Embraer boasts a fleet hike of 21 to 41 aircraft, plus seven deliveries of corporate- configured ERJ-145 regional jets, which appear in the census for the first time.

The same success has not been achieved by struggling regional aircraft maker AvCraft Aerospace, now in administration. The in-service fleet of 328Jets has risen from 10 to 15, including eight Envoys.

A similar picture has emerged in the widebody corporate market, dominated by Airbus and Boeing. While Airbus has seen in-service numbers almost double in the past year from 28 to 52 aircraft, Boeing’s tally has fallen slightly from 240 to 235. Airbus has exploited the niche for long-range business-class airliner shuttles with its A319 Corporate Jetliner and A319 Long Range airliners, numbers of which have doubled over the past year from 12 to 24 aircraft. Boeing’s BBJ and BBJ2 fleets, meanwhile, remain flat at 65 and 11 aircraft respectively. The fall in Boeing’s fleet numbers can be attributed to the drop in older corporate 727s from 63 to 59 aircraft.

Since last year’s census Raytheon Aircraft’s jet fleet has grown steadily from 1,633 to 1,842 aircraft. The Hawker 400XP light jet, which has courted considerable success with fractional operators, has seen numbers rise by over 150% from 23 to 60 aircraft.

Meanwhile, the Hawker 800XP fleet has leapt in 12 months from 363 to 425 aircraft. The Premier I light jet tally has also climbed in the past year by 30 aircraft to 122 worldwide, and with the imminent service entry of the higher-specification Premier IA, Raytheon will be hoping to boost this annual tally further. The next 12 months could finally witness the service entry of the much delayed super-mid-size Hawker Horizon, which received provisional certification last year.

While Raytheon boasts a healthy share of the world’s jet market, its dominance of the turboprop arena is unrivalled. Its fleet of 5,260, 120 more than last year’s census, represents 54% of the world’s in-service turboprops. Of these, the Beechcraft King Air twin, of which 5,230 are in service worldwide, accounts for the bulk of the manufacturer’s turboprop tally.

As such, Raytheon is in a prime position to exploit the turboprop market revival – fuelled in part by rising fuel prices. Since last year’s census Raytheon has introduced a souped-up version of its smallest King Air, the C90. The $2.95 million C90GT has more-powerful Pratt & Whitney Canada PT6A-135A engines, and is expected to enter service next month with a substantial order backlog.

Twin-turboprop manufacturer Piaggio has seen demand for its P180 Avanti soar, notably from North American fractionals. The Avanti fleet has risen in the last year by 12 units to 92 aircraft. With the planned service entry of the upgraded Avanti II imminent, the Italian airframer hopes to expand its orderbook and compete with the emerging very light jets.

IFR delays

Single-engine turboprop manufacturers have made considerable fleet gains too, despite the continued delay in approval for commercial single-engine instrument flight rules operations in Europe, potentially their second largest market.

Pilatus Aircraft’s in-service PC-12 fleet climbed by nearly 25% from 400 to 498 aircraft, thanks largely to the aircraft’s increasing popularity as a fractional and executive aircraft. Struggling New Piper has also seen its turboprop numbers climb from 1,146 to 1,227 as sales of the Malibu Meridian single increase and turboprop conversions for the PA-46 Malibu continue to climb.

The fleet of EADS Socata high-performance TBM700s has risen from 247 to 280 aircraft. The latest version of its six-seat single-engined turboprop, the C2, particularly popular in the USA, jumped from 47 to 82 in-service aircraft.

The next 12 months should boost the turboprop inventory further with the scheduled service entry of several aircraft, namely Extra Aircraft’s EA-500, Grob Aerospace’s G160TP Ranger, the Ibis Aerospace Ae270, VulcanAir’s 600W Mission and Quest Aircraft’s Kodiak.

The continued reduction in the inventory of used aircraft has been instrumental to the turnaround in the corporate aircraft market. Rick Engles, chief executive of international aircraft broker Vance and Engles, says the market now stands at its historical average of about 10% of the turbine fleet, reversing the fortunes of manufacturers that are now firming up the prices of new aircraft.

Particularly sought-after are large-cabin types, Engles says. “The need to travel globally has driven demand and prices for good-condition Gulfstreams such as the GIV and GV, the [Dassault] Falcon 900EX and 2000 and Bombardier’s Global Express,” he says. Smaller-cabin types, particularly light and mid-sized aircraft such as the Citation X, are proving harder to shift, he says.

Upgrade costs

Owning older aircraft types has become prohibitive for many operators as the cost of upgrading to meet regulatory requirements such as reduced vertical separation minimum and Stage 3 noise restrictions is often too high. Other unpopular types such as the Gulfstream II and Hawker 125-600/700, continue to be retired or sold to regions with less regulated airspace, notably African and South American countries, such as Liberia, Nigeria and Venezuela, where the market for secondhand aircraft continues to grow.

Old types such as the 40-year-old Lockheed Jetstar, Learjet 23 and Hawker 125-1A are increasingly being culled for spare parts. Numbers of these types have fallen by 12 in the past year.

Geographically, the fleet-distribution picture is changing slowly. As the census reveals, South America, which has the third largest corporate fleet by continent, has seen fleet numbers jump by 7.5% to 2,255.

Leader Mexico has seen its tally climb by 37 to 661 corporate aircraft, although Brazil, which recorded this year an increase of 50 jets and turboprops, is snapping at its heels with 645. Elsewhere in the region Colombia and Venezuela have made fleet gains of 36 and 20 aircraft respectively as acceptance of business aircraft in these growing economies has become more widespread.

In Asia and the Pacific Rim, growth has been slower, with fleet hikes of 18 and 38 aircraft respectively. As the census shows, most of the growth within Asia is in India where the corporate tally has risen by 14 aircraft, 11 jets and three turboprops. In Japan, however, the corporate fleet has fallen by three aircraft to 108 as the country continues to be stymied by a lack of regulatory reform, despite pleas from manufacturers and operators for change.

China’s fledgling turbine fleets continue to climb, albeit slowly, as cultural, political and economic barriers to market emergence are gradually eroded. The ever-determined manufacturers are working behind the scenes to improve understanding of business aviation and exploit these essentially untapped regions where the potential for major sales is huge.

The waiting game may be a long one, but manufacturers can draw comfort from the European market where gaining acceptance from an often hostile and ill-informed audience has over the years been a slow and challenging task. Although some observers argue that business aviation in Europe remains largely untapped, with a relatively low penetration of multinational companies and high net-worth individuals in the region, the numbers of new business jets in the region has seen a steady rise year on year.

All the world regions have yet to achieve the level of acceptance enjoyed in the USA, where there are fewer cultural barriers to aircraft ownership, lower financial burdens on aircraft use and greater flexibility in operations. These factors are instrumental to North America’s long-standing dominance of the corporate market. The census reveals the in-service corporate fleet there has risen in the past 12 months from 16,097 to 16,681 – nearly 72% of the world’s turbine fleet. The continent’s corporate jet fleet has grown at the same rate – 70% between 2000 and 2005. -

- Data compiled by AvSoft, Myson House, Railway Terrace, Rugby, Warwickshire, CV21 3HL. Tel: +44 (0) 1788 540898 Fax: +44 (0) 1788 540933. Totals derived from base country of the aircraft and not country of registration. Figures are correct as of 1 September.

KATE SARSFIELD/LONDON,DATA COMPILED BY KEITH BLINCOW,STEVE BUTLER AND CRAIG MARTIN/AVSOFT