GAMA
GAMA released its shipments and billings report for the second quarter of 2024, and the results are generally positive for the general aviation market. Year over year business jet deliveries are up 8.8%, while industry billings year over year are up 22.8%, largely from an increase in sales at Gulfstream, who sell high end and expensive business jets.
Compared with pre-pandemic levels in 2019, however, the results appear mixed. Business jet deliveries remain 3.3% lower than 2019 levels, although billings are 14.7% higher. With recent inflation, however, no real gain in revenues has occurred on an inflation-adjusted basis. The helicopter market continues to be positive, albeit 5.1% lower in shipments and 10.2% lower in billings from last year. Deliveries and billings were still greater than 2019 pre-pandemic deliveries by 3.4% and 11.6% respectively.
The following chart summarizes data from 2019 to 2024 through the second quarter for each year to provide an apples to apples comparison. Seasonality in general aviation typically results in strong 4th quarters. We expect similar delivery results as the second quarter, slightly below 2019 levels for the year. We project those deliveries will generate higher billings, reflecting both a changing mix to larger aircraft and five years of inflation for the entire year.
Business jets have the highest prices and drive revenues for the industry, particularly high-end business jets. There were 322 business jets delivered through Q2 2024, compared with 296 in 2023. A breakdown by manufacturer is shown in the following table. Gulfstream, with 16 additional deliveries, Bombardier with 8, and Embraer with 7 accounted for the growth in deliveries in 2024, with Gulfstream and Bombardier generating the most of the increase in billings. Gulfstream and Bombardier together accounted for more than 60% of business aircraft revenues during the first half of 2024.
DELIVERIES
Based on shipments, market share by company is shown in the following table. Shipment units and market shares have been relatively stable, with modest volatility since 2019. When new models are introduced, such a the G700 at Gulfstream, a boost in deliveries often follows. The sustainability of deliveries as older models are phased out and replaced has been the key to long-term success, and continues today. With both G650ER and G700s being delivered, Gulfstream is on its way to a very successful year. Bombardier, with the forthcoming Global 8000, may soon be in a similar position.
The following table shows market share for shipments by each of the business jet manufacturers. In 2024, Gulfstream has been delivering new airplanes produced while the new G700 certification was delayed and has had a boost from the new, and very successful, model. Bombardier and Embraer are also showing strength this year.
Graphically, the market shares for each player tend to vary slightly year by year, but discernible patters emerge. The following chart shows market share by shipments for the last six years through the first half of the year. Overall, the market shares by shipments remain relatively stable, with minor year to year changes.
The following pie-chart highlight first-half 2024 deliveries by manufacturer, with Textron, Gulfstream, Bombardier, Cirrus and Embraer continuing as the top five players.
BILLINGS
The order of the major players in the industry changes dramatically when billings are the key metric, with Gulfstream and Bombardier, who offer larger and higher priced business jets, battling for the market share lead.
The following table shows billings by OEM for the first half of the year from 2019-2024. Most of this year’s increase is fueled by Gulfstream, which is $1.2 billion ahead of last years first have revenues.
Examining market share by billings shows the leaderboard changing, with Gulfstream, Bombardier, Textron, Embraer and Dassault comprising the top five players. The following table shows market share by billings for the first half of the years from 2019-2024.
Looking at market share from billings graphically, the patterns for the major players emerge as similar over the last half-decade.
For 2024, the market share for billings has Gulfstream and Bombardier together comprising more than 60% of industry revenues. Embraer and Dassault have been trending upward, while Honda is trending downward and Textron somewhat flat. The following pie chart shows first-half 2024 results.
THE BOTTOM LINE
The year to year growth in the business aircraft market is positive, as the industry is now approaching pre-pandemic levels. The market, overall, has remained relatively flat since the downstream impacts of the great recession, and has not come close to achieving the record levels of production from 2008, when the industry delivered 1,313 business jets during the year. Compare that with the 730 in 2023, and the growth that could return to 2019 levels in 2024 pales by comparison.
We don’t see a pent-up post-pandemic demand, nor market factors, that indicate a major growth in business aviation is in the cards over the next few years. Will the industry get back to the pre-pandemic level of 809 deliveries in 2024? It may come close, despite a few lingering supply chain constraints. But that growth would still be only 61% of the record 2008 levels. If the industry is going to recover to those prior levels, new demand will need to emerge from a source we can’t identify today. We expect continued slow growth for the industry.
