Jetgala: European Aviation – Is Europe’s Business Aviation Heading Towards A Sustained Recovery?
Turbulent is a term often used to describe the European aviation industry of late. European airlines were expecting a loss of USD1.2 billion last year, the International Air Transport Association reported. Economic losses and declining passenger traffic have engulfed Europe’s aviation industry, plagued by debt crises. However, what comes down will – hopefully – go up again.
Last year’s Honeywell Business Aviation Forecast reported that although flight activity in Europe was expected to decline by approximately 3 per cent, it will pick up in 2013. As a business hub for more than 53,000 ultra-high-net-worth-individuals (UHNWIs) with a collective estimated net worth of USD$ 6.95 trillion, Europe still is the second largest private aircraft market after North America. According to Wealth-X, these UHNWIs form 28 percent of the global UHNW population and their combined wealth makes up 27 percent of the world’s UHNWI combined net worth.
Europe is still the second largest aircraft market after North America
Private jet operator and manager NetJet cites Europe as its second largest market, accounting for 17 percent of its global business jet deliveries. With increased demand from Russia, NetJets Europe and other private air charter companies expanded operations in Moscow. RusJet, a private charter company based in the country, expects an annual growth of 10 percent in Russia’s business aviation sector. Sales of Gulfstream business jets in Russia increased by fivefold between 2007 and 2011. All of these indicators point towards a healthy demand from the Russian UHNW population.
In Turkey, a more modest 3.8 percent increase of UHNWIs still made a different in the country’s aviation industry. Air charter operator Avinode reported an overall increase of 4.8 percent between January and October last year in Turkey’s business jet traffic. The president of a Turkish shipping management company reportedly enjoys flying his Falcon jet for at least 120 hours every month. Other private jet owners in Europe include a German CEO of a steel company who owns two Cessna Citation jets and an English chairman of a financial firm who also owns a Cessna Citation jet.
More long term prospects are on the horizon, as leading manufacturing such as Boeing are expecting a demand from Europe for 7,760 new aircraft. Bombardier also sees Europe and the Commonwealth of Independent States receiving 2,240 new business jets between 2012 and 2031 – hence, it is only a matter of time before Europe becomes more than just a runner up.