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Bizav market forecast 2022. Inventory & Pilots Shortage | Steady operations increase | Top-trends 2022

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Aircraft Sales. Pre-owned jets.

Jetcraft reports that demand for pre-owned business jets will increase until 2025. During the next five years, the company anticipates 12,261 pre-owned transactions worth $57.2 billion in revenue.Among the factors affecting increased demand, the main ones are health & safety concerns and the increasing high-net-worth individual (HNWI) population. Midsize and Large aircraft segments are predicted to lead steady growth in overall volume. The revenue growth will be driven by the Large Jet category.

The Honeywell Global Business Aviation Outlook predicts demand for used jets is estimated at more than 6,500 units over the next five years, putting pressure on an already record low inventory and driving additional demand for new jets.

On the other hand, Arcos Jet reports that prices on pre-owned jets will keep growing during the next 6 months. The survey covered market representatives from Europe, especially charter operators, brokers, and dealers. Inventory shortages, which have become a major challenge for the industry, are a major factor in price increases.By the end of 2021 the market had nearly nothing to offer customers who were ready to buy a jet "here and now".

View full Jetcraft survey

View full ArcosJet survey
View full Honeywell survey

Operations growth but not back to normal.

Investment bank Morgan Stanley forecasts that global corporate travel will rebound in 2022, but not return to normal. For the business aviation industry, a steady increase is expected in 2022, but not so rapidly as in 2021. This causes more strict travel budgets and replacement of business trips by video meetings, with the exception of strategically important trips and exhibitions. 11% of respondents expect to be more liberal in private jet travel, 82% says there will be no change in travel policy and 6% are going to be more stringent in business jet usage.

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Increased demand for pilots.

Consulting firm Oliver Wyman came back to the subject of pilot shortage in the industry. In 2019 the same study showed that among flight operation leaders, 62% listed pilot's shortage as a key risk for the industry. In the beginning of COVID-19, the conversation shifted from shortage to surplus due to lockdowns around the world, lack of flights, and entry restrictions. Big role is this surplus played numerous cadet training programs, financing, and well advertised career path. The main question at the time was when the demand returns. Nowadays, when the industry recovered to 76% of pre-covid level the situation on the market shows that fewer people choose pilot careers as it is not stable path anymore. Pilots who retired too early because of employers' wishes to reduce costs in this way are not ready to come back.

The study estimates an approximate 10 000 gap in the beginning of 2022 and a 60 000 gap by 2029. 

The analysis, predicts North American, Asia Pacific, and the Middle East are likely to see the largest shortage while Europe, Africa, and Latin America remain closer to equilibrium. By 2023, Asia and the Pacific region will face a 13% shortage, primarily due to premature retirement, resulting in a shortage of over 23,000 pilots.

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Top-5 trends 2022.

Corporate Jet Investor mentioned 5 key factors that are likely to shape business aviation in 2022.

Those are: rising demand, falling inventories, environmental and social governance (ESG) pressures, greater government scrutiny and New technology.

First, extreme demand for business flights. According to Wingx Global Market Tracker business jets flew 3.3m flights across the globe last year. That’s 7% higher than the previous record set in 2019. This demand will continue, as high net worth individuals and their families, plus corporate fliers, seek the sanctuary and convenience of private aircraft cabins. In addition, lots of domestic flight or destinations are not covered with regular flights still.

Second, shortage in the pre-owned market combined with an increased price on used business jets. AMSTAT data shows that just 3.78% of the total fleet is for sale. OEMs and new aircraft should be delivered to customers in 2023 and 2024 mainly. And there’s not just a shortage of aircraft. Experienced pilots, airframe and power plant mechanics and other engineers are also becoming increasingly difficult to source.

The third point is environmental pressure and zero carbon emission policy. The International Business Aviation Council set 2050 as the year of zero carbon emissions and while it comes closed, every year become a challenge for engine design and fuel production. Sustainable Aviation Fuel (SAF) that can cut carbon emission with up to 80%, plus carbon offsetting schemes, offer hope.

Fourth, is the greater involvement of law enforcement and government agencies in business aviation. The less regulated parts of business aviation,  particularly transactions, – are being exposed to far more scrutiny.

Fifth, is the impact that new and rapidly developing technologies will have on business aviation. These are not confined to airframes and engines – although the progress of inflight engine diagnostics and communications is truly impressive.

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