What Will The Future Hold For Business Aviation In 2017

What Will The Future Hold For Business Aviation In 2017

The Future of Bizav 2017

After a tumultuous year of global surprises from sport to politics, here’s hoping 2017 provides some much needed stability, growth and prosperity for private aviation. P1 looks forward.

The Future of Bizav 2017 Economy
“Taken as a whole, the world economy has moved sideways,” said IMF chief economist Maurice Obstfeld

Well, 2016 was certainly an entertaining year of upheaval and surprises, twists and U-turns. In the UK, lowly Leicester City won the English Premier League, with some dedicated supporters cashing in at 5000-1. That was followed just four weeks later by the British voting to leave the Economic Union – in a move rather glibly coined Brexit. All the while, across the pond, certainty was turning to disbelief as Donald J Trump not only won the Republican candidacy but then the ultimate prize – President of the United States of America.

Leicester City Future Of Bizav 2017
Leicester City winning the English Premier League symbolised a year of shocks

It’s said that if you were a betting man and had put one single dollar on those three results, you would have won US$3,000,000.

These were not the only memorable landmarks from the past 12 months. In September, the long-running war between the Colombian Government and revolutionaries came to an end after a bloody conflict that had killed 220,000. President Juan manual Santos was awarded the Nobel Peace Prize, but then the ceasefire was vetoed – with the public voting against it in a referendum.

In sport, the Chicago Cubs won baseball’s World Series after a 108-year wait. After being 3-1 in the 7-game series, they won it 4-3. Heck, even Tiger Woods managed to finish a tournament (scoring more birdies than any other player in the process).

Sporting upsets aside, shocks and surprises are not usually good news for business, and events like Brexit and Trump both hit global markets hard. In the two trading days after Brexit, US$3 trillion was wiped off market values. When Trump was elected, Asian markets were the first to be hit, while the Mexican Peso in particular took a pounding.

However, and investor will know that markets are quick to recover, and where there are losses there are gains to be made. And the same should hold true for business aviation too. While our industry is naturally sluggish and slow to respond to market conditions, it does adapt. Weak companies and underperforming aircraft may fall by the wayside in tough economic times, but the strong will survive – and thrive.

But as we prepare to enter the Chinese Year of the Rooster, now is not the time for being cocky. Everyone knows that the market has been stagnant or declining for some time now, and really hasn’t recovered since those heady days before the 2008 global financial crisis. Did we all get a bit carried away in those golden years of plenty, and anticipate demand from economic powerhouses like China and India that were ill equipped or unwilling to embrace business aviation? Or has Murphy’s Law prevailed – whatever can go wrong, will go wrong?

The Future of Bizav 2017 Delhi Airport
India’s aviation infrastructure could get a shot in the arm from GDP projected to expand 7.6% next year

2017 is set to be another pivotal year. On January 20, President Trump will take power in the US. By March, the UK should be triggering Article 50 to start the painful separation process from the EU. China looks like it will continue to boom (although whether you believe the official government stats is up to you), and many analysts predict better than expected growth in the US of just over 2%. If veteran conservative Alain Juppe is elected President of France in May, and German Chancellor Angela Merkel retains power, Europe could also get a much-needed air of stability – although much will also depend on President Putin.

The Future of Bizav 2017 Putin
President Putin continues to flex his political muscles, and may find a friend in Donald Trump

The IMF said in its October 2016 World Economic Outlook that global economic growth will remain subdued this year.

“Taken as a whole, the world economy has moved sideways,” said IMF chief economist and economic counsellor, Maurice Obstfeld.

The report suggested that persistent stagnation, particularly in advanced economies, could further fuel populist calls for restrictions on trade and immigration – such as the ones proposed by President elect Trump.

“It is vitally important to defend the prospects for increasing trade integration,’’ Obstfeld, said. “Turning back the clock on trade can only deepen and prolong the world economy’s current doldrums.”

The IMF report said the world economy would expand 3.1% in 2016, but that next year growth will increase slightly to 3.4% on the back of recoveries in major emerging markets, including Russia and Brazil.

The IMF says US growth is likely to rise to 2.2% next year while UK growth is predicted to slow to 1.1% in 2017, down from 2.2 percent last year. The eurozone will expand 1.5 percent next year, compared with 2 percent growth in 2015.

So where is the good news? Thankfully, the experts at the IMF do predict some brighter horizons, and in important markets for business aviation.

The IMF says emerging markets and developing economies will experience increased growth for the first time in six years – to 4.2%. Next year, emerging economies are expected to grow 4.6%. So where exactly is this growth coming from?

In its October update, the IMF said China’s economy, the world’s second largest, is forecast to expand 6.6% this year and 6.2% in 2017, down from growth of 6.9% last year. 

“External financial conditions and the outlook for emerging market and developing economies will continue to be shaped to a significant extent by market perceptions of China’s prospects for successfully restructuring and rebalancing its economy,’’ the IMF said.

India’s GDP is projected to expand 7.6% next year – making it the leader among the world’s major economies.

In Africa, Nigeria’s economy is forecast to shrink 1.7% in 2016, and South Africa’s will barely expand. However, Côte d’Ivoire, Ethiopia, Kenya, and Senegal are expected to continue to grow at more than 5% this year.

In Latin America, things are looking bleak, but there is a glimmer of hope for Brazil which is expected to reverse fortunes next year and grow by 0.5% – modest but significant.

In the Middle East, meanwhile, countries are still tacking the fallout from low oil prices, war in Syria and terrorism.

The Good News

The last 12 months were good year for new business aircraft, with the HondaJet finally starting deliveries just before last Christmas, and the Falcon 8X (at the other end of the scale) in early October. We also saw the arrival of the Piaggio Avanti EVO and the Cirrus Vision SF50. So what do we have to look forward to in the next 12 months?

Top of the wish-list has to be the new Gulfstream G500. Launched a week before NBAA 2014, the G500 is a cleansheet design with new fuselage, new wing, new flightdeck and new engines – far from just a remodel or upgrade.

Gulfstream’s G500 could make its debut in 2017
Gulfstream’s G500 could make its debut in 2017

Just like the market-leading G650, the G500 is built for speed, comfort and range. As P1 reported in issue #38 (worth checking out for two films we made about the new aircraft), the outer fuselage of the G500 is 7in less than the G650’s, but inside the cabin height is only 1in less, and the windows are just as big. The cabin width is 7ft 11in and height 6ft 4in – just an inch lower than the G650.

The top speed of the new jets is the same at Mach 0.925, while range will be 5,000nm for the G500. For the pilots there’s a new advanced flightdeck that is quite unlike previous G-decks, and more extensive fly-by-wire than previous models too.

Gulfstream's G500 Future Of Bizav
Gulfstream’s G500 is a cleansheet design built for speed, comfort
and range

The new Symmetry flightdeck is a collaboration between Gulfstream and Honeywell. The G500 has Sidesticks controllers – a first for Gulfstream. Another first is the use of Pratt & Whitney PWC800-series turbofans after decades of partnership with Rolls-Royce.

Pratt & Whitney G500 Engines
Pratt & Whitney will be providing engines for the G500 rather than Rolls-Royce

The G500 is expected to be priced at US$43.5 million, and should fly off the proverbial shelves.

Equally anticipated, and following on from another highly successful sibling, is the Pilatus PC-24. This Swiss-made jet is another (like the Cirrus Vision) to create its own market segment – the Super Versatile Jet (SVJ).

The Pilatus PC24 Super Versatile Jet
The Pilatus PC24 Super Versatile Jet

The PC-12 single engine turboprop is the best-selling aircraft of its kind, with 1,400 units sold to date, clocking up more than 5 million flight hours. What made the PC-12 such a hit is also destined to made the 24 pure gold – the cargo door fitted as standard, and the ability to take off from unmade runways. Yes, a private jet taking off and landing in regular fields.

With more than 80 orders taken at launch, the Stans, Switzerland-based company closed the order book, and deliveries are expected at the end of 2017.

Lucky customers can choose between several cabin configurations with seating usually for six passengers. The twin-engine jet is expected to sell for US$9 million, has a range of 1950nm and max speed of 425kts.

Completing our highlights for 2017 is the Cessna Citation Longitude – part of a large-cabin Citation family that will also include the Latitude and Hemisphere.

The Cessna Citation Longitude is designed to revolutionise the super-midsize segment
The Cessna Citation Longitude is designed to revolutionise the super-midsize segment

“The Longitude  combines the ideal mix of performance, cabin comfort and industry leading technology,” said Scott Ernest, Textron Aviation president and CEO. “And, along with the  Citation’s proven design and dependability, the  Longitude  is designed to revolutionise the super-midsize segment.” 

The  Citation  Longitude  has seating for up to 12 passengers, has a stand-up, flat-floor cabin with a standard double-club configuration, allowing the most legroom in class. With fully berthable seats the Longitude  is designed for maximum passenger comfort – including the lowest cabin altitude in its category at 5,950 feet.

While passengers can kick back in comfort, pilots get their kicks upfront, too. The clean-sheet design features the Garmin G5000 flight deck and is powered by FADEC-equipped Honeywell HTF7700L turbofan engines providing a max cruise speed of 476 knots and a high-speed range of 3,400nm. 

The Longitude is expected to cost around US$26 million, which seems damn fine value.

On Our Radar

2017 also promises some other significant moments for business aviation – including the first flight of the supersonic Boom aircraft and, less sexy but more important, Part 23 ruling by the FAA.

The Aerion AS2 supersonic business jet
The Aerion AS2 supersonic business jet

While Boom is intended for commercial flights rather than private aviation, proof of concept and technology will go a long way to paving the runway for other projects aimed at the private user, such as the Aerion AS2.

The Aerion AS2 supersonic business jet could benefit from progress on the Boom airliner
The Aerion AS2 supersonic business jet could benefit from progress on the
Boom airliner

We are sure everyone knows that the FAA is proposing to revamp the certification process for small aircraft – moving away from prescriptive design requirements and instead instituting a new system of performance-based standards.

The notice of proposed rulemaking (NPRM) replaces the current weight and propulsion classifications of small airplane regulations with both performance- and risk-based standards for aircraft weighing less than 19,000 pounds and seating 19 or fewer passengers.

It is hoped that this move would reduce certification costs, increase safety and, importantly, allow the industry to develop and implement new technologies.

“Given the overwhelming support for this proposed rule, and the tremendous benefits it would offer to all facets of the general aviation community for years to come, we hope the current administration will put this well-crafted rule in place as soon as possible to allow our industry to innovate freely without being shackled by outdated restrictions,” GAMA President and CEO Pete Bunce said back in May. “The increased harmonisation between the FAA and other agencies worldwide will ensure the success of this effort and allow our industry to grow in ways we can’t even think of yet.”

Who knows? With such widespread change – political, economic, legislative –2017 could be shaping up to be a great year for the business aviation industry.