Insight: Consolidation in the Business Jet Market?

Will we see consolidation in the business jet market as a result of the pandemic?  The business jet market, which saw growth stagnate since the Great Recession in 2008, was not hit quite as hard as the airline market by the global pandemic. Nonetheless, the industry took a major hit, losing nearly 30% of deliveries in 2020 when compared to 2019, and will likely recover only to 2018 levels in 2022.  Just when the first hint of growth in the market emerged in 2019, it was crushed by the global pandemic in 2020.

Today we have five major players and three niche players in the business jet market.  Logically, that market should host three to four major players, who could more profitably distribute demand among them.  There are several ways industry consolidation

could occur moving forward, as there are players solely at the lower end of the market, and players solely at the higher end of the market that would have little overlap if they merged.  Let’s examine the possibilities:

EMBRAER

Low-end of the market include Embraer, who build small to mid-sized jets, and Textron Aerospace, who build the small to super-mid-size Citation family of business jets.  Either of these two companies would be a good match for Bombardier, which with the cessation of Learjet production focuses on the high end of the market, Dassault, which also focuses on the mid to high end of the market, and Gulfstream, which also focuses on the mid to high end of the market.