Monday, September 24, 2007
Slowdown Foreseen in Booming General Aviation/Utility Market
"These aircraft offer far more spacious cabins than the typical VLJ, and not all operators will be willing to trade space for speed," Douglas Royce, aerospace analyst at the company.
The forecast was part of a new study titled The Market for General Aviation/ Utility Aircraft 2007-2016, and Forecast International projects that makers of general aviation and utility aircraft will turn nearly 27,140 aircraft worth approximately $22.55 billion during the period 2007-2016. The Connecticut-based market research firm, which excluded the production of business jets from this study, anticipates that production of general aviation and utility aircraft will peak in 2007 at about 3,243 annual deliveries and then fall off gradually to a low of 2,452 shipments in 2011, with annual production thereafter hovering in a band between 2,400 and 2,600 units for the remainder of the forecast period.
"Strong economic growth led to continuous increases in production levels during the past five years, but this trend is unlikely to last for much longer," said Royce. "The general aviation market has historically been highly sensitive to economic conditions, with the segment typically being the first in the industry to suffer during a prolonged economic downturn. The economic boom of the past years may be slowing, and slower economic growth will lead to reduced production levels in the years ahead."
Of the total number of aircraft produced, 22,477 piston aircraft will account for the vast majority of units produced (82.8 percent of the total). Turboprop aircraft manufacturers will turn out aircraft in lower numbers, for a total production of 4,660 units (17.2 percent of the total).
Turboprop value of production is projected to amount to $13.7 billion or 60 percent of the total, while the value of production of piston aircraft will amount to $9 billion or 40 percent of the total due to the much higher unit prices of turboprop aircraft.
"Overall, the number of piston powered aircraft in the United States is very likely to remain stable during the forecast period, and so the market for piston aircraft will likely be driven by the replacement of aging aircraft with newer models rather than strong growth in the market overall," Royce said. "International sales into new markets like Russia, India, and China offer the hope of high growth in the market, but the creation of the infrastructure and regulatory environment needed to stimulate demand for new aircraft in these nations is likely to be a decades-long process."
Royce noted that the price of purchasing and maintaining general aviation aircraft for private, non-commercial use is a serious obstacle to higher growth in the market. "Although the general aviation/utility market is expected to remain vibrant, we believe that production levels will peak in 2007 during a period characterized by what we believe has been extraordinary demand," he said.