In the post-pandemic environment, even more emphasis is being placed on completing aircraft deliveries before year-end. In business aviation, the fourth quarter has traditionally been strong, often driven by depreciation or accounting rules that favor taking delivery before year-end from a financial perspective. Business Jet delivery patterns are changing.
The following chart, compiled from GAMA annual shipment reports, shows the percentage of annual deliveries completed each quarter from 2000 through 2022. While the fourth quarter has always been the strongest, in recent years, that strength appears to be increasing, the growth coming at the expense of the first quarter.
With the first quarter declining over the last five years, getting out of the gate with a positive start to the year now appears much less important than how the year finishes in the fourth quarter. Would a potentially slower start to the year indicate a full-year issue? Given this historical bias, a first-quarter year-over-year drop may not be as predictive as it once was.
The following chart shows total business jet deliveries over the same period, by quarter. While recently first quarter deliveries have been falling, overall deliveries have been flat or rising.
The Bottom Line
While everybody likes to see a great start to a new year in business aviation, the correlation between first-quarter and full-year results needs to be considered. A bad start does not necessarily predict a bad year.