Look around the business jet industry today and on the surface the view is impressive. The marketplace abounds with a flashy array of major product upgrades and clean-sheet designs in various stages of development, while stage whispers hint at yet-unannounced aircraft launches still to come.
Not since the absurdist heyday of the very light jet (VLJ) era has the industry seen so many new projects in the pipeline.
The difference between now and the days before the VLJ market imploded is that the industry seems very aware of the actual state of the world outside its glossy brochures, which is not nearly as healthy as appearances may imply.
Like visitors to Las Vegas, the venue for the upcoming NBAA convention, the business jet market is divided into winners and losers – but neither description seems entirely justifiable based solely on rational metrics.
Large-cabin and super-midsize jets are as popular now as they were before the financial crisis, and have been for at least two years. These are clearly the winners in the business jet casino.
But the luck at the top of the product range has still not trickled down to the gamblers at the lower end. The light and midsize sectors have always relied on North American entrepreneurs to sustain growth, but this usually reliable pool of customers has simply dried up.
Theories to explain this behavioural shift are plentiful and include the political backlash against “fat cats” in business jets, a glut of available used aircraft and general uncertainty about the direction of the global economy.
Market forecasts indicating a full recovery unfolding in 2014 are still based – like a Vegas gambler's certainty – more on faith than hard data.
The standard metrics used by the industry before the 2008 financial crisis suggest the full market recovery should already be well under way. Yet sales this year of entry-level Embraer Phenom 100s and Cessna Mustangs combined still trail those of the large-cabin Gulfstream G550. That does not suggest a healthy and balanced environment.
The good news is that the industry – particularly the segment that nearly lost its shirt – is adapting. The days of three-year order backlogs appear to be gone, and so is the requirement for customers to specify their cabin interiors months, or even years, in advance. Now, most manufacturers are willing to configure a light or midsize jet with as little as three weeks' notice. It’s a small step, but indicative of the changes required.
But how the new clutch of aircraft entering the bottom half of the market over the next few years will fare is still anyone’s guess. It remains possible that there are too many new projects chasing too few old customers.
What the light jet and midsize sectors really need to thrive is the unlocking of new markets in the so-called developing economies. That or a little bit of good old-fashioned luck.