Chad is the editor of AINalerts, AIN's daily business aviation newsletter, and is also the news editor at AIN Media Group.&nbsp;He has been writing about aviation, with an emphasis on business aviation, since 1994. Chad started his writing career at The Avion,&nbsp;the&nbsp;student newspaper at Embry-Riddle Aeronautical University in Daytona Beach, Florida, serving as editor-in-chief before graduating with a bachelor's in aeronautical science. After a stint as managing editor at Professional Pilot&nbsp;magazine, he joined&nbsp;AIN in late 1998. Chad holds a commercial pilot certificated with instrument and multi-engine ratings, and he also is a CFI/CFII. He lives and works from his home in Venice, Florida.

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Chad Trautvetter

Business jet deliveries this year are projected to be down anywhere between 12.5 percent and&nbsp;almost 50 percent year-over-year due to the Covid-19 crisis, depending on its lingering effects on aircraft demand and supply, according to JetNet iQ director Rolland Vincent. Before the pandemic, business aviation analyst and consulting firm JetNet iQ projected 730 business jet shipments this year; it now foresees about 640 deliveries as the best-case scenario and about 375 as worst-case.

 


While Vincent is expecting a U-shaped post-Covid-19 recovery, all of his scenarios show fewer deliveries than previously estimated over the next two years, with recovery to the prior forecast trend line unlikely before 2023 at the earliest. That means about 600 business jet shipments each in 2021 and 2022 versus the previously forecast 705 and 656, respectively. The adjusted forecasts in 2023 are for 615 aircraft, rising modestly to 623 and 646 in the following two years.

 


“The Covid-19 crisis is already the most fundamental shock—the black swan of swans—to ever get sucked into the engine of business aviation,” Vincent wrote. “Covid-19 is now expected to trigger a global economic recession, putting an end to business aviation’s long, slow, and unsteady recovery in the post-2008 period.”

 


JetNet iQ's baseline fourth-quarter 2019 business jet forecast for 2020 to 2029 projected 7,180 new deliveries with a mix of light jets (28.8 percent of the 10-year forecast), midsize jets (29.6 percent), and large-cabin jets (41.6 percent). "In our most likely post-Covid-19 scenario, we estimate that this forecast comes down by about 500 jets over the 10-year period, or down about 7 percent, with all of the leakage at the front end of the 10-year period," Vincent told AIN. "We think the delivery mix will change somewhat, and our initial estimates are 26 percent light jets, 34 percent midsize, and 40 percent large."

 


JetNet iQ's assumptions for its post-pandemic forecast include larger average passenger loads driving buyers up from the light jet category into midsize jets—what Vincent called a "flight to security," driven by some companies putting more of their people on business aircraft as an alternative to the airlines. He also envisions some "value-driven leakage" from the large-cabin jet category to midsize jets as some companies stay closer to home, reducing the need for their flight departments to have larger aircraft as they pare back or even eliminate ultra-long-range missions due to shrinking the company's business operations and supply chains into more geographically concentrated regions.

 


"In our various scenarios, we assumed that all of the major OEMs would be affected by furloughs, some to a greater extent than others depending upon their sold/unsold positions with their 2020 production skylines," said Vincent. "At an industry level, I think that there is a very real potential for whitetails at year-end, as companies who will have worked through the challenges of their disrupted supply chains find that customers are not yet ready, able, or willing to pull the trigger, get in an airplane to come and sign the sales contract or specify their airplane."

 


He further said preowned sales are also being affected by the Covid-19 crisis. With MRO shop capacity constraints, Vincent believes it will be a challenge to move preowned aircraft through their pre-buy process, even if buyers and sellers can agree to a price in what has quickly become a deflationary market.

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