Five years of lost growth is bad news for any market. For Europe's business aviation sector, the areas reaching that level are actually the stronger performers, with other pockets still suffering from even weaker activity.

Effectively, Europe's business aviation market, whether it comes to used aircraft deals, flight movements or maintenance, is trifurcated: The high end is healthy, the mid-size market is reaching recovery, and small-sized aircraft activities remain at bottom. The ability of businesses to adjust to those market realities will be critical to a healthy financial future.

For instance, next year TAG Farnborough Airport finally expects to top 2007-level aircraft movements. But that milestone will be driven, in part, by the London Olympics. Still, even without the additional activity, movements will likely reach the peaks seen in 2007.

However, the business mix has changed, notes Brandon O'Reilly, the facility's CEO. The larger aircraft (and higher-margin) business is up more than 10% compared with 2010. Overall, O'Reilly says, the mix of activities has shifted so “earnings have improved significantly.”

But the severe economic anxiety in Europe continues to cast its pall, hampering the overall market just as it was beginning to show signs of recovery. This year has seen a slowdown in scheduled maintenance for smaller aircraft, overshadowing the slight uptick in that activity in 2010 that had just started to emerge following a prolonged lull, says Bob Evans, regional sales director for northern Europe at General Dynamics' Jet Aviation. The reversal is attributed to concerns over a double-dip economic contraction.

Similarly, Marwin Khalek, CEO of Gama Aviation, notes that after seeing year-on-year growth in 2009 and 2010 that somewhat ameliorated the lows of 2008, this year remains static. He says, “The charter side remains pretty flat in terms of growth.”

The market also is encountering fallout from the financial crisis on lending. Some European banks have made deals more difficult. Deposit requirements have increased; loans are structured at 60-80% of the value of the asset rather than the former 70-90%—and banks are often requesting that buyers place other assets under their management as well.

While the number of lenders remains essentially the same, most are only interested in dealing with a particular niche of aircraft or buyer, reducing competition on each deal. Jane Warner, director of aircraft finance firm Trilogy Aviation, says, “Most transactions can still be placed,” but banks are “more prescriptive with what they want.”

Compounding these restrictions is that some lenders, such as banks in France, are finding it hard to get access to dollar loans because U.S. institutions worry about defaults linked to the European banks' exposure to Greek debt and the weak European market more broadly. The dollars are needed to finance business aircraft deals.

One of the biggest frustrations for business aircraft loan seekers is that small items can tie up or derail months of negotiations, industry officials bemoan.

Still, the outlook is not entirely bleak. Tim Barber, managing director of JetBrokers Europe, says that “over the last six months we have experienced a sustained steady increase in activity.”

But even when it comes to used aircraft, there is a market shift. Rather than selling the assets within Europe, most are being sold outside the region, Alan Cunningham partner at law firm DLA Piper, says.

Having seen recovery hopes dashed before, industry officials are cautious about projecting when a broad market upturn will set in. “We have all learned to stop guessing,” Khalek concedes.

Long term, though, the market remains optimistic and even short term there are glimmers of opportunity; the latter centers mainly around next year's London Olympics. “Surprisingly, we've already taken advanced bookings for the Olympic games,” O'Reilly says. The orders for pre-paid slots have come from the U.S.

In preparation for the Olympics, Farnborough this week has opened the first of three new hangars that are part of a £35 million ($53.8 million) expenditure, which is to be wrapped up in March and will culminate in a ground handling support facility and extended apron, along with the hangars.

The work also underpins new planning approval that will allow Farnborough to grow to 50,000 movements per year by 2019—up from 28,000 approved for 2010. The biggest jump is expected next year, when authorized movements increase to 37,000 from 31,000, and those during the peak weekend period to 6,600 from 5,500, O'Reilly says. Weekend demand is so strong that even during the downturn the airport had to turn down requests for slots.