viernes, 17 de julio de 2020

viernes, julio 17, 2020
Business Jets Are Flying Again. Their Manufacturers Aren’t.

Private-plane makers have concentrated on developing new long-range models, but the postpandemic world may end up preferring cheaper, smaller aircraft

 By Jon Sindreu




Can a business jet ever be too cool for school? Surprisingly, it might.

Private aviation has faced headwinds and tailwinds alike from the pandemic. Initially, the outbreak depressed demand and disrupted production, prompting plane makers to dismiss thousands of workers. Yet health concerns about commercial planes and airports also could inject new blood into the long-stagnant industry.

The number of business-jet flights is now only 15% lower than a year ago, following a strong rebound, compared with a 65% drop for commercial aircraft, according to data provider FlightAware.



Corporations aren’t rushing to sell their planes to raise cash, as they did in 2008. Aircraft available for sale made up 7.8% of the total fleet in July, compared with a one-year average of 7.7%, according to analysts at Jefferies.

Brokers report that some firms are even looking to broaden private-jet use beyond C-suites into middle management.

But there’s a catch: It is likely that much of the prospective new demand won’t align well with the type of planes that manufacturers are churning out.

While private-aircraft sales stalled after the global financial crisis, Asia’s economic boom sparked a lot of interest in top-of-the-range private aircraft that could fly executives across continents. These are higher-margin products, and releasing a new model tends to create a jump in orders.

One example is the Falcon 6X, due to be released by French aerospace manufacturer Dassault Aviation in 2021. With a price tag of $47 million, it can carry 16 passengers as far as 6,300 miles. Competitor models include Bombardier’s Global 7500 and Gulfstream’s G650ER. These are planes for billionaires and the world’s 100 biggest companies.



This trend seems to have run its course. China’s growth is gradually slowing and its promise as a user of long-range jets was never truly fulfilled. After an increase in production to meet anticipated demand, many of the planes sold in the country were returned to the U.S. and Europe amid a shortage of proper facilities to operate and maintain them.

Manufacturers may ultimately need to entice more traditional clients who are a better fit for the midsize and super-midsize jet categories. These can fulfill almost all of a corporation’s needs and fly to smaller airports. There, though, development has stalled—Embraer’s Praetor 500, introduced in 2018, being the exception.

Shares in business-jet makers are doing better than their commercial-plane peers, but are still down a lot this year. That may not make them the bargains they appear amid the pandemic-induced rebound in private aviation, though.

Early signs suggest the recovery’s beneficiaries are not plane makers but the likes of NetJets and Flexjet, which offer charter flights and fractional ownership plans—and aren’t traded on the stock market. Since secondhand jets have recently been underutilized, charter companies have room to grow before they need to call the factory.

For all the burgeoning interest in business jets, this is a market where demand and supply alike may fall short.

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