The General Aviation Market – Have We Turned the Corner?

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GAMA released its 2017 results last week, and they show that the general aviation industry grew slightly last year in terms of shipments, as shown in the table below.  Overall, counting all five categories, piston, turboprop, business jet, piston helicopter and turbine helicopter, the industry delivered 2% more aircraft than in 2016, a relatively flat result, as shown in the table below.

While the low end of the market grew, with piston aircraft and piston helicopters showing 6.5% and 17.9% growth, respectively, the high end of the market was not so robust, with turboprops down 3.3%, business jets up 1.3% and turbine helicopters down 4.5%.

While the business jet sector was up 1.3%, much of that growth came from the very light jet segment, with the Cirrus SF50 delivering 22 aircraft in 2017 versus 3 in 2016, and the Honda Jet delivering 43 aircraft in 2017 versus 23 in 2016.  Take these two aircraft out of the equation and the remainder of business jet market was down 31 aircraft, a 4.8% drop from the prior year.

While the low end of the market is growing in piston, piston helicopter, and very light jets, the higher priced, and higher margin segments — turboprops, heavier business jets, and turbine helicopters, were all falling behind 2016 levels.  That changing mix resulted in lower industry revenues in 2017 than in 2016.

GAMA’s summary of billings for aircraft and helicopters both fell year to year for both aircraft and helicopter segments, with aircraft generating $20,196,793,962 in 2017 versus $21,092,457,142 in 2016, down 4.2%.  Helicopters generated $3,681,209,642 in 2017 versus $4,086,229,140 in 2016, down 9.9%, with the total down 5.2%.   Clearly, the general aviation sector hasn’t turned the corner yet.  Of particular concern for vertical lift is the continued depressed nature of the oil and gas market. A return to positive territory will not happen until 2021 at best in our opinion.

When can we expect to see a major change?  Our affiliate, AIR (AirInsightResearch), recently published our forecast for the Business aviation segment through 2025, focusing on business jets & turboprops.  Their forecast outlines how historical correlations are no longer valid, and that the industry will not rebound to 2008 levels for the foreseeable future, as shown in the chart below.

Our analysis and full forecast is available from AIR at this link.

© 2018, Ernest S. Arvai. All rights reserved.

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