Demand Set to Increase in Jet Charter Bookings and Private Jet Manufacturing

Phenom 100 charter jet

The trends in jet charter demand and in the production of business aviation aircraft are looking positive for 2012. The most recent projections from online portal Avinode show demand for charter flights heading upwards this month. The group’s forward-looking demand index for the next month stood at 114.23 the first week of February–almost 21 points above the month-ago level and more than 14 points above where it was 12 months prior. Avinode’s price index for global operations based on the same data was at 99.29, slightly down from early January but up from a year ago.

The research group’s data for actual average flight hour rates being paid as of early February also pointed toward higher demand for aircraft operators. For example, the average rates for a Bombardier Challenger 604 rose by 1 to 5 percent from three months ago and were up by between 3 and nearly 7 percent from six months ago. Similar trends were apparent for sample Hawker 800 prices and rates for a Cessna Citation Excel, which climbed between 4 and 8 percent in North America. These trends show higher levels of demand and also reinforce our recommendation to clients that booking flights early can provide cost benefits.

On the manufacturing side of business aviation, JPMorgan Investment Research noted in its latest market report (released February 2012) that while they continue to observe some mixed signals from jet manufacturers, they saw pockets of strength in the business jet industry in the fourth quarter of 2011. They sense an eagerness for a pickup in the business jet market, particularly at the lower end. The investment research firm predicts an 8-percent rise in business jet deliveries this year, driven by U.S. business. Keeping with recent trends, large-cabin jets will be driving much of this increase, with a “œmodest pickup for smaller jets” according to JPMorgan.

Other encouraging news within the business jet industry includes the recent completion of the Embraer Executive Jets Global Customer Center at the Melbourne International Airport in Florida, in December 2011. The new 58,000-sq-ft customer center opens adjacent to the Phenom final assembly plant opened in February of 2011, bringing hundreds of jobs to Florida. Customers will come from all over the world to select the options they want for new Phenom, Legacy and Lineage business jet aircraft. Aircraft assemblies and deliveries at the plant will ramp up to 30 Phenom 100s and 300s this year, and 60 of the two light jet models next year. Embraer president and CEO Frederico Curado has also said there is room for expansion at the 80-acre site in Melbourne, leaving open the possibility that more Embraer business jets beyond the Phenoms could eventually be assembled in the U.S.

Each of these pieces of positive news, plus the recent overall growth “albeit modest” of the U.S. economy, has given us encouragement here at Stratos Jets over the state of business aviation and the jet charter industry as a whole. Stratos Jets firmly believes that private jet charter is an engine of growth throughout America, providing absolutely critical assistance to companies and individuals in getting business done – and pursuing their own dreams and aspirations, either in business or in their personal lives.

As a member of the Air Charter Association of North America, the only industry-led organization to promote best practices and ethics, we strive every day to do things the “right way” in the jet charter industry. We are honored that we get to help our clients in the business of rebuilding this nation’s economy every day.

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