Business jet travel will be essentially flat next year in the U.S. and down in Europe compared to 2012, primarily due to the persistence of the economic downturn, according to a forecast from Avinode Inc. of Miami.
The forecast was presented here at NBAA yesterday by David McCown, senior consultant at Air Partner Inc. and chairman of the Air Charter Association of North America.
U.S. business jet travel will decline overall by 0.1%, although the South and West, driven by seasonal factors such as entertainment and greater discretionary travel, will post growth of 0.4% and 1.3%, respectively. The Northeast and Midwest, which are more business-focused when it comes to business jet use, will see 1.2% and 3.9% declines, respectively.
Business jet activity will be down by 3.2% in Europe in 2013. Avinode attributes this to seasonal travel demand, the euro crisis, economic downturns in many countries, and legislation in some nations -- notably Italy -- that virtually punishes owners and operators of business jets. The company split Europe into two regions for the forecast – north and south. The south, whose business jet activity is driven mainly by leisure travel, will record a 4.3% decline in flights next year, while flights in the north, which is more oriented toward business travel, will decrease by 1.3%.
The one bright spot in Europe is Turkey. McCown predicts that business jet travel will increase by 7% there in 2013. He attributes this growth to location – Turkey is central to markets in Russia, the Middle East, Europe, Africa and Asia – and to a vibrant domestic economy, which is generating GDP growth of 8.2%. He says that 60% of Turkish business jet flights are domestic, and a great deal of this activity is in support of infrastructure development and other local initiatives.
GDP growth in the U.S., in contrast, is predicted to be an anemic 1.4% to 2.1% in 2013, and to remain flat or decline by 1.2% in Europe.
One area that was not covered by the forecast, but was discussed by a participant on a panel that was part of the presentation, was Asia. Bjorn Naf, CEO of Metrojet Ltd., said there were many opportunities for business jet operators there, though they would need to invest at least a decade in developing their business, building relationships and educating the market about business aviation before it paid off.