European Business Aviation Market Update

The European Business Aviation market has faced a turbulent few years, roiled by Covid-19, supply chain issues, and the war in Ukraine. Here, some of the industry leading experts on the region outline the condition of the continent’s Business Aviation sector, looking at the current and future challenges and opportunities.

Despite all of the recent challenges, the European market remains a major hub of the global Business Aviation sector, though demand for aircraft has fallen back somewhat from its recent peak.

According to JETNET data, there were 4,883 business jets and turboprops based in the EU and Turkey at the end of February 2024. Of these aircraft, 375 (7.7%) were available for sale. That compares with 253 aircraft for sale at the end of February 2023, which represented 5.3% of the total fleet of 4,783 at that time.

In terms of how these aircraft are being used, WingX Advance data reveals that aircraft management fleets currently comprise the largest chunk of flights in Europe in the period February 1, 2023 to February 29, 2024, accounting for 35% of all business jet departures.

This refers to operators mainly managing aircraft for private owners. Meanwhile, branded charter accounted for 28% of departures, while private flight departments represented just 5%.

Leah Alexander, who works in EMEA Aircraft Sales & Acquisitions at Duncan Aviation, believes the recent rise in available inventory in Europe comes due to a fall in demand. Nevertheless, as of March 2024 “the last couple of months have seen the number of aircraft for sale remain quite stable” in the continent, she says.

Given more favourable inventory levels and relatively higher interest rates, cash buyers who may have been riding out the recent period of value volatility in the European market “are in a particularly strong position now to make a purchase decision”, she highlights.

The Impact of the Ukraine War on Europe’s BizAv Scene

As with the wider European economy, Business Aviation has inevitably been impacted by the Ukraine war. Alexander says the war initially saw quite a few Russia-linked aircraft come to the market, “a good number of which were pretty much unsellable due to sanctions”.

However, such global conflicts generally increase interest in Business Aviation, she notes, due to a heightened awareness of safety and security risks.

Meanwhile, the pandemic saw demand go through the roof meaning the market is still seeing values above pre-pandemic levels today, while the inventory available for sale is some way below where it was in 2019, across makes and models.

There is still demand across all segments, albeit slightly reduced. “The charter operators couldn’t get enough aircraft during the pandemic,” Alexander adds, “so they started to buy pre-owned – this was a significant factor in the pandemic boom for Business Aviation.”

Tim Barber, who also specializes in EMEA Sales & Acquisitions at Duncan Aviation, says that aircraft series with models still in production retain a premium in the European market, currently.

Nevertheless, with general demand still above 2019 levels, legacy models continue to find a market, with programs becoming a key driver of value in the European market. 

“Engine programs – and depending on the model, APU and avionics programs as well – provide welcome assurance to buyers of older or out-of-production aircraft, which as a result can command a premium compared to others available for sale,” Barber says.

European BizAv Market: Regaining Normality Amid Challenges

Max Hooper, Co-Founder of Corporate Jet Consulting (CJC), also points to a decrease in European activity in the past one to two years, after the increase in demand sparked by the pandemic.

“Manufacturers had learnt from their mistakes of overproduction during the financial crisis, so the pre-owned market was very active and picked up the slack,” he says.

“In addition, finding charter availability was extremely difficult and rates increased dramatically, pushing more people towards the ownership model.”

The industry is now trying to regain a sense of normality, Hooper says. The airline industry has worked hard to bring its aircraft back into service. Because scheduled airline services are more accessible, this has taken some of the demand away from the charter sector in Europe.

However, the surge of interest during the pandemic also changed the buyer profile in Europe with many people purchasing aircraft to give themselves more freedom in a sanitary environment.

Many found that they could initially offset their costs in the European charter market – but they’re facing a rude awakening now, notes Hooper. “In some cases there has been a significant drop in hourly rates whilst operating costs have increased.”

“The comfort that some of these owners can find is that the large number of buyers who purchased at the beginning of the pandemic will still be able to achieve a price similar or higher than they purchased their aircraft for, as there is still strong demand for particular models – especially those which are still deemed to have charter potential.”

But wider challenges remain, Hooper warns; notably supply chain issues, a shortage of parts and a dearth of business jet engineers.

“In the case of engine overhauls, if you own or operate an aircraft with engines which are not enrolled on an engine program then you will struggle to source a loaner when the overhauls are due, which will essentially ground the aircraft,” he highlights. “Even if you have engines enrolled on a program, loaner availability will still be limited.”

And there are more sinister challenges too. The scarce availability of parts “opens up the market and opportunity to unknowingly or knowingly purchase counterfeit parts in order to keep the aircraft in operation”, Hooper says.

On top of this, supply chain issues could see some older aircraft withdrawn from operation at their next major maintenance event, having received an extension during the pandemic boom. Some flight simulators have already been shut down in anticipation, Hooper reveals.

“Limited maintenance slot availability is also a noteworthy point. Planning is essential and cannot be left to the last minute. Should you have a maintenance event occurring in 2025 it would be wise to already have it booked in. Leaving it until a month prior will not suffice [in today’s market].”

The supply chain issues have been a challenge across Europe, says Eymeric Segard, CEO of LunaJets and LunaSolutions. “The entire chain suffered disruptions in 2020 and never fully recovered from them, causing the manufacturers to develop new suppliers for parts, systems, etc.

“This goes for avionics, airframe electronic components, engine parts and raw materials such as latex and rubber – minerals that are part of essential materials used on the airplane,” he says.

On top of that, there have been challenges around labor, both in MRO shops and in the cockpit. “As the travel sector recovers from the pandemic, the airlines are hiring a big portion of private aviation pilots, making it difficult for everyone to accommodate the hours of flight and the growing fleet across several markets.”

This, according to Segard, has impacted salaries and general labor costs in aviation, “which we are still dealing with, although we seem to be past the worst.”

Strong Fundamentals Across the European BizAv Market

George Galanopoulos, CEO of Luxaviation UK, says charter demand has steadily decreased in Europe since summer 2023, but his company expects to see this increase again in the remainder of 2024, with demand boosted by events like the Euro 2024 football championships and the Olympics.

The fall in demand has had a particular effect on the Large Cabin/Long-Range Jet types, Galanopoulos says. In the Mid-Size market, by contrast, “demand remains close to peak levels and prices have hardly moved”.

Florian Van der Cruyssen, Vice President of Sales at Opus Aero, reckons the most sought-after models in Europe are Mid-Size Jets like the Gulfstream G200 and the Cessna Citation XLS+. Long-Range options such as the Bombardier Global 7500, the Gulfstream G650 and Dassault’s Falcon 7X have captured considerable attention from buyers seeking transcontinental capabilities, however.

“These models have emerged as the flagships of the industry, demonstrating their enduring appeal and value proposition to discerning customers,” Van der Cruyssen adds.

While the Russia-Ukraine war has caused challenges, such as restrictions on aircraft sales caused by international sanctions, the fundamentals of the Business Aviation market across the continent remain robust, he believes.

“The enduring appeal of private air travel, coupled with the technological advancements and performance capabilities of modern aircraft, continues to drive interest and investment in the sector. As geopolitical tensions evolve and global dynamics shift, adaptability and resilience will be key attributes for businesses operating in the dynamic landscape of Business Aviation,” he adds.

Meghan Dwyer is Sales Director for Europe at Guardian Jet and says her company is positive about transaction levels, with an active market despite higher interest rates, inflation, and economic downturns in certain countries or segments.

“In the past three years we noticed a big peak on high- net-worth individuals, which certainly pushed our industry forward when companies were shut down due to the Covid-19 pandemic, laying off employees and not operating at full capacity,” Dwyer remarks.

“This trend changed since early 2023, when most of the corporations were back to their business, visiting locations, clients and back to their travel needs.”

Gestair is a Spain-based provider of executive aviation services, including chartering and maintenance work. Director of Aircraft Sales & Acquisition, Carmen Munguía, says the Southern European market had seen many of the same trends as the European market at large in recent years, with a strong increase in demand from the summer of 2021 to the end of 2022.

This has moderated since, though it has remained high in 2023 and into 2024. Munguía said these trends had been reflected in the company’s own performance. It saw a 40% rise in flight hours between 2020 and 2022, remaining stable in 2023. Flights have combined work-related demands with trips to second homes, he adds.

And in the same vein, there has been a positive evolution in trends regarding the sale and purchase of aircraft. “This increase has been produced, on the one hand, by the renewal of the fleet that had been ‘paralyzed’ during the Covid period (in which case, the trend is towards renewal by the purchase of new aircraft),” he notes.

On the other hand, he says it also owes to “the arrival of new clients who have incorporated the use of Business Aviation for the expansion of their emerging businesses.” 

A Note on the Turkish BizAv Market

The Turkish business jet fleet currently stands at well over 130 aircraft, notes Gökçehan Daçe, Managing Partner for the Middle East and North Africa (MENA) region at Global Jet Market.

According to Daçe, the Turkish market, like the wider European region, saw a surge in demand for Business Aviation during the pandemic, thanks to restrictions on airlines. There are currently three major trends in the country’s Business Aviation market, he says.

First, there has been a growing demand for business jets. While this is a wider European trend, it is particularly strong in Turkey, Daçe notes, “driven by factors such as economic growth, strengthened confidence in the economy, and the expansion of business opportunities in emerging economies like the Gulf region, India and China”.

Second is a focus on new aircraft models. “Key players in the business jet market are actively working on developing and launching new aircraft programs, with companies like Bombardier, Embraer, Textron, Dassault, Gulfstream, and others introducing new models to meet market demands.” 

This will impact Turkey’s pre-owned market as owners upgrade and their older models are put on the market, Daçe notes.

Thirdly, he points to geographical expansion, with Turkish business aircraft operators focused on penetrating the Middle Eastern and European markets. “In summary, the Turkish business aircraft market is experiencing growth and increased investment," he says.

There could also be opportunities stemming from Turkey's political position, as a conduit between the West and Russia. This could provide the overall economy, including Business Aviation, with the “incentives and opportunities to balance itself between the extremes”, Daçe suggests.

Future Focus of the European BizAv Market

Marcel Wepfer is Charter Sales Director at AXIS Aviation, and says the European market is likely to remain diverse. 

“Each segment has unique preferences. Fractional ownership, for instance, might drive demand for Mid-Size and Super Mid-Size Jets, while individual and corporate buyers could lean towards Large, Long-Range, and Ultra-Long-Range Jets.”

The pre-owned market is expected to stabilize, he believes, with an increase in transaction volumes and a shift in the types of jets available. In his view, Light Jets are anticipated to retire in significant numbers, with larger jets taking a more prominent share of the market.

At a global level, Honeywell forecasts up to 8,500 new deliveries of business jets worth $278bn between 2024 and 2033, Wepfer notes, suggesting strong potential for growth worldwide, including in Europe.

“The European business aircraft market is strong and poised for further growth,” he says.

Much could hinge on elections over the course of the year, says Hooper. CJC believes the US elections in November will have a major impact, while the UK has its own set of elections coming up.

“We [could] have a new government [in the UK], so we need to wait to learn more about their economic policy”, and if it will have a bearing on Business Aviation, he says.

Alexander also highlighted the potential for wider, political factors to have a major impact over the coming year. “As we move into a more 'normalized' post-pandemic market, we anticipate values declining and aircraft available for sale continuing to rise, albeit not as swiftly as seen at the end of 2023,” she says.

“It would appear that the market is a little more resilient than many anticipated. But with more than 60 elections taking place this year there are a lot of potential unforeseen changes that could impact how the year ends,” she concludes. 

Read similar Business Aviation Market Insights on AvBuyer.

More information from:
AXIS Aviation: https://axis-aviation.com
Corporate Jet Consulting: www.cjc.aero
Duncan Aviation: www.duncanaviation.aero
Gestair: www.gestair.com
Global Jet Market: https://gjm.aero
Guardian Jet: www.guardianjet.com
JETNET: www.jetnet.com
LunaJets: www.lunajets.com
Luxaviation UK: www.luxaviation.com
Opus Aero: www.opusaero.com
WingX Advance: https://wingx-advance.com