Great Recession Update: Ten Years Later, Lagging Jet Operations Will Likely Mean Lower Revenues For OEMs and Service Companies

An Opinion by Chris Pratt

I’ve been tracking business jet flight operations for years as one of my gauges of industry health. I have to say, this particular measure continues to transmit some confounding signals.

According to FAA* data, the total number of Business Jet Operations (domestic and international) reached a high of 4,824,960 for the year 2007. After that, operations declined through the Great Depression of 2008 and 2009 before beginning to rise once again.

But here’s the rub: fully ten years have passed and the total number of operations have not yet reached their previous high despite the fact there are now approximately 58% more jets in the U.S. fleet. 

Let that sink in for a moment. 

The U.S. fleet has 58% more jets than it did pre-Great Recession yet, in total, those jets fly fewer operations (see chart).

Business jet operations post-Great Recession have yet to equal their pre-Recession level despite more jets in the fleet.


Yes, I know jets are flown less as they age but this is only a 12 year time span, and truth be told 20 and even 30-year-old jets are still quite active players. (By the way, retired jets have been removed from the data.)

Peeling back the data a little further show that between 2007 and 2019 the jet fleet expanded at a compound growth rate (CAGR) of 3.91%. Which is consistent with the current Honeywell growth projection for the next ten years of 3.48% CAGR. 

Operations, on the other hand, show a domestic ops CAGR of 2.73% since the 2009 low through 2019, while international business jet operations turned in slightly better positive growth at 2.98% CAGR for a combined total of 2.77%.

Are the lower number of operations simply a lack of demand? Doubtful, since why would so many expensive new jets be purchased when there are plenty of more affordable pre-owned jets already in the market. Perhaps the decline in fractional ownership during this period has had some effect (a topic for another time), or the rise in turboprop activity by providers such as Wheels Up may have taken business away (sadly, comparable FAA data is not collected for the turboprop segment).

So, what is the takeaway here? 

Well, for MRO, FBO and other business jet service companies, lower activity quite simply means less business within a comparable time span. It also suggests that the level of new jet deliveries for the segment may stay pretty much where it stands now for the foreseeable future; that’s something for OEMs and their planning departments to ponder. And perhaps, it points to the likelihood of further consolidation within what appears to be a mature, lower growth industry.

Your opinions are welcome.

Best regards,

Chris Pratt

February, 2020

Chris Pratt has more than 40 years experience in the business and general aviation market as a researcher, strategist, communicator and branding specialist. He currently serves as a consultant for William Ryan Group – Aviation. He can be reached at +1 214.208.2667 or email at [email protected].

* FAA ETMSC data through December 2019 subject to revision

Bad Strategy: Let the market decide

Falcon 6X ultra widebody, long-range business jet. Copyright Dassault Falcon Jet.

An Opinion by Chris Pratt

In the past few years, a recurring discussion I’ve heard popping up in business jet conferences is whether or not there are too many large jet models being offered by the OEMs and what should be done about it. Ultimately, and perhaps inevitably, the groupthink conclusion is: Let the market decide.

That strategy might work in the retail space where brands ultimately test their latest toothpaste or running shoe on store shelves (though I doubt seriously this is the case). For business jet OEMs, however, who spend several years and billions of dollars to get their product to market, this is just plain bad strategy. 

In fact, this approach can bankrupt a company.

One can argue the exact number but, in order to make a profit, OEMs need to produce somewhere around 25 jets of each model per year. Keep in mind that the historical average deliveries for this segment is 180 jets per year. Add to that a market demand that is not growing. Now, do some simple math for a market that currently produces 13 different large/long-range jet models* with at least three more models due to enter service in the next three years. The math just doesn’t work.

Something has to give.

Surely the OEMs realize this is not sustainable, yes? Yet new product introductions such as the recent G700 announcement make one wonder.

If the OEMs are playing a game of one-upmanship, then I suggest it is a very risky strategy. If OEMs continue to chase the fantasy that the market can absorb enough production to make all these models profitable, then they are in for a very hard landing.

Is there a solution? Certainly. Rationalizing this market is not rocket science, but it does entail a disciplined and well-reasoned approach to research.

Having spent 40 years in business aviation marketing, much of which included market research for turbine products, I can tell you that, in general, business aircraft OEMs pay lip service to market research. I’m not referring to technical, aircraft performance research or listening to what flight departments say, but research on the market environment: the impact of a new model on market dynamics, realistic growth potential, sales and service strategies, how owner/operators feel about the use of business jets, e.g. cultural perceptions, expectations, political mindset, etc.

This approach is a difficult sell in an engineering driven industry, but is essential for creating a truly winning product that not only competes with other aircraft but with the heart, mind and wallet of the owner.

Unless and until the OEMs wake up to this reality, they are going to be unprepared when the next big business jet recession hits. Based on my research, I don’t think they’ll have long to wait.

Best regards,

Chris Pratt

January, 2020

Chris Pratt has more than 40 years experience in the business and general aviation market as a researcher, strategist, communicator and branding specialist. He currently serves as a consultant for William Ryan Group – Aviation. He can be reached at +1 214.208.2667 or email at [email protected].

* Large/Long-Range business jets include all current production jets with a range of at least 4,500 nm. Excludes converted airliner and corporate shuttles.