Business jet makers look to tap surging corporate travel demand at Las
Vegas air show
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[October 11, 2021] By
Allison Lampert
LAS VEGAS (Reuters) - Planemakers are
likely to unveil new orders and models at the world's largest business
jet show this week as they aim to cash in on a boom in private travel,
but executives warn of headwinds due to a capacity crunch.
The National Business Aviation Association (NBAA) show returns to
in-person format starting in Las Vegas on Tuesday, testing the strength
of demand for jets following the emergence of COVID-19. The show will
also shed light on the resilience of the aerospace supply chain in
strained logistics worldwide.
Easing travel restrictions and the lure of private flights has led to an
unexpected surge in business aviation, with traffic rising from 2019
levels. That is filling seats for private operators and expanding order
backlogs for planemakers, straining the supply of jets and pilots.
Companies that laid off workers or delayed orders during the pandemic
are now scrambling to find planes and staff, echoing a problem faced by
some airlines, executives said.
That has led to flight cancellations and delays in an industry that
charges top price for reliability, leaving some private operators to
turn down business to protect service.
"Everyone will be talking about the same thing: how do we deal with this
demand," said Ian Moore, chief commercial officer of private jet company
VistaJet.
"I'm sure that's going to be a topic at every booth and every cocktail
party in Vegas this year."
One top supplier, Honeywell is predicting a 50% rise in business jet
flight hours in 2021 over last year.
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A privet jet comes in for a landing at the Van Nuys airport in the
high desert area of Los Angeles County, California July 30, 2015.
REUTERS/Gene Blevins
General Dynamics' Gulfstream Aerospace, one of the largest business jet makers,
is not participating due to COVID-19. The U.S. planemaker recently announced two
new jets, with its larger G800 set to clash with Bombardier Inc's Global 7500
and Dassault Aviation SA's 10X in a battle of the flying penthouses.
It is a boon for private aviation which has yet to recover to the 1,300 aircraft
delivered in 2008 before the financial crash, said aviation analyst Brian Foley
in a recent note.
Foley said he expects around 700 business aircraft deliveries in 2021 with a
ramp-up in production expected to begin in 2022 as planemakers gain confidence
the surge is sustainable.
While Cessna business jet maker Textron Aviation is raising production to meet
demand despite supply chain challenges, Canada's Bombardier is waiting to see
how orders evolve.
"We've rebuilt backlog and I like that price is re-firming. But it’s a question
of supply and demand,” said Bombardier Chief Executive Éric Martel in a recent
interview. "We have to see what’s going to happen in the next few months.”
Some planemakers are watching for signs of a bubble similar to the demand ahead
of the 2009 economic crash which left them on the hook with unsellable jets,
said an executive at one corporate jet manufacturer who spoke on condition of
anonymity.
"Some are wondering is it real or is it 2007 over again?"
(Reporting By Allison Lampert in Las Vegas, Nevada; Additional reporting by
Shreyasee Raj in Bangalore; Editing by Denny Thomas and Chris Reese)
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