Business Aviation Recovery: GAMA Second Quarter 2021 Results

The business aviation recovery continued in the second quarter of 2021, with deliveries up compared to the first quarter, but remaining behind pre-pandemic levels. While demand for business travel has risen during the pandemic and manufacturers are receiving new orders, the lead times for production and completion of business aircraft means that we will not see those effects until later in the year and 2022. The following chart summarizes GAMA data on business aircraft deliveries in the first and second quarters of 2021 combined. Year to date, the industry has delivered 264 business jets, just under 80% of the pre-pandemic level in 2019. Single-engine turboprops have fully recovered and deliveries are 4% higher than pre-pandemic levels. In terms of overall billings, the industry has recovered to 87.4% of pre-pandemic levels. Helicopter shipments remain lower than pre-pandemic levels at 82.4% of 2019 levels, but at 92.1% of billings. While the industry has not yet fully seen a business jet recovery, the trend is in the right direction and the outlook for the third and fourth quarters remains optimistic. On a company-by-company basis, the impact of the pandemic and the speed of recovery has differed, as shown in the table below that shows business jet deliveries for the first two quarters of 2019, 2020, and 2021. Business jet deliveries showed a modest improvement over the first two quarters of 2020, with overall business jet deliveries down from 333 during the same pre-pandemic period in 2019 to 264 this year. That translates to 79.3% of pre-pandemic levels and indicates a slower than expected recovery when compared with 2020, when the industry was virtually shut down during the second quarter. Textron delivered 72 aircraft to lead in shipments, followed by Bombardier with 55 and Gulfstream with 49. For those manufacturers, the business aviation recovery is close to pre-pandemic levels. On a market share basis, Textron has the highest market share in terms of business jet deliveries, as shown in the following table, which includes the first and second quarters of 2019, 2020, and 2021. Textron, which fell sharply in 2020, has recovered its share of the market to pre-pandemic levels in mid-2021. Bombardier and Embraer have exceeded their 2019 levels year to date in 2021 deliveries, recovering more quickly than other industry participants. The following chart shows the data graphically, with pre-pandemic 2019 in blue, 2020 in red, and 2021 in green. In terms of billings, the mix of higher-priced aircraft favors Bombardier and Gulfstream, while Textron and others that focus on smaller jets have lower average billings per aircraft. Billings through the second quarter of 2021 for manufacturers offering business jets remained 13.1% short of 2019 pre-pandemic levels for the same period. The following table shows billings by the manufacturer and the extent of the business aviation recovery for each player. From a market share perspective based on billings, Bombardier has jumped into the lead, leveraging its higher-priced Global 7500 to take about 1/3rd of the market year to date. The following chart shows the billings market share for the 2Q YTD for 2019, 2020, and 2021. Billings market share data are summarized in the table below. The following graphic shows the same data, with pre-pandemic 2019 in blue, 2020 in red, and 2021 in green. The Bottom Line - Business Aviation Recovery The GAMA shipments data indicate that the business aviation recovery has not yet reached pre-pandemic levels in deliveries, despite high demand for business jet travel. With used aircraft availability at a ten-year nadir, this bodes well for increasing future orders and deliveries. Lead times, however, make it unlikely that the industry will fully beat pre-pandemic levels by year-end, and it will likely be 2022 before 2019 levels are exceeded. The trend, however, is in the right direction, and several players, including Bombardier, Embraer, Textron, and Gulfstream appear well-positioned in the near term.

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