The business-aviation market will continue to track upward over the next five years, although billings may decrease or remain flat, according to market analysts.

The shift is due to a change in the mix for aircraft expected to be delivered to customers, Brian Foley Associates analyst Brian Foley told attendees at the recent SpeedNews 21st annual Business and General Aviation Industry Suppliers Conference in Los Angeles.

Demand for the biggest, most expensive business jets is expected to soften, as demand for less costly small and medium jets recovers and increases, he said.

Dollars, rather than number of units, have always been the more relevant metric of the health of the business jet market, Foley told attendees.

During the first half of 2015, deliveries of large-cabin jets fell 12.7% when compared to the first half of 2014. At the same time, shipments of small- and medium-cabin jets rose 3.6%, Foley told attendees.

The change is due to an economic decline in emerging markets that geographically have a need for long-range jets, a strengthening U.S. dollar that makes the jets cost more overseas, and declining commodity prices, Foley said.

Oil-related companies and regions like big-cabin jets, but demand from that sector has been hurt by the decline in oil prices, he said.

During the 2009 financial crisis, the market for large, intercontinental business jets was barely fazed, while demand for smaller jets fell by two-thirds, which forced manufacturers in that segment to slash staffing, Foley said. Cessna Aircraft, for example, cut employment by half as customers canceled and postponed orders.

“Big-cabin jets helped save our bacon,” Foley told conference attendees.

Now, demand for large jets is slowing, and future deliveries will contain a great proportion of small and medium jets, he said.

The net effect is that over the next couple of years, more aircraft will go out the door, but without moving the needle on overall industry values.

“This anomaly won’t rectify itself until 2018, when a slew of new, large, pricey jet models from DassaultBombardier and Gulfstream hit the market,” Foley said.

Over the next decade spanning 2015-24, Foley predicts deliveries to total 8,594 jets worth $238 billion.

Foley expects deliveries to continue to trend upward each year until 2020, when shipments begin to decrease.

Rolland Vincent, a consultant with Rolland Vincent Associates, agrees. He also predicts business jet deliveries to grow until 2020, with a slight decline to follow.

Another Cycle

“We do think there’s another cycle coming,” Vincent told attendees at the SpeedNews conference.

The industry has faced a downturn every 10 years for the past four decades,

Vincent predicts deliveries of 9,328 business jets from 2015 to 2024 valued at $258 billion. He expects 19% of the orders to be for large ultra-long-range jets, 16.3% for light jets, 16% for super-midsize jets, 11% for very light jets, 9.0% for large jets, 8.3% for midsize jets, 8.0% for large long-range jets and 7.4% for personal jets.

The U.S. is the driver of business jet sales. U.S. consumer confidence is the highest in eight years, Foley said. And the number of used business jets for sale is the lowest since 2008, interest rates are low, utilization is up and oil prices are down, which means lower operating costs.

At the same time, manufacturers will have 13 new products enter service from 2015-19, which will stimulate demand.

This year will be an industry-upturn pivot point, Foley told SpeedNews attendees, “evidenced by meaningfully growing backlogs, increasing book-to-bill rations and double-digit percentage delivery growth,” Foley said.