Although the Wright brothers are celebrated as the “founders of flight,” the history of aviation began long before the Wright brothers were even born. For thousands of years, humans have been attempting to fly, and hundreds have contributed to our aviation industry.
Today, airplanes are used all over the world as vehicles to conduct company business and expand mission operations. In the United States, many businesses have survived and thrived because early on the owner made a strategic decision to use airplanes to visit customers and promote their products.
According to NEXA’s research, on average, companies that participate in business aviation outperform companies that do not. As we move into the future, aviation will continue to be a key player in economic growth and globalization.
Why business aviation will continue to grow …
Global Economic Growth
Today’s world economy continues to grow, but its rate of growth is slowing. In 2015, global GDP returned to an estimated 3% around the world. Forecasting International studies show specifically 2.6% in the US, 1.8% in the EU and somewhat higher in developing countries.
Over the next five years, global growth is expected to average 3.1%. However, according to the World Bank, emerging markets will dominate by 2025 as their economies will grow at a faster pace than advanced economies. Over the next ten years, Brazil, China, India, Indonesia, Russia and South Korea are predicted to account for more than half of all global growth.
Even with a slowing global economy, business aviation will remain healthy. Bombardier predicts delivery of 9000 business jets by 2024, worth $267 billion. Honeywell estimates $280 billion in sales over the same period. RnR Market Research says China alone will buy 2420 business jets between 2013 and 2032.
This solid growth in global aircraft sales will support a steady growing GA industry requiring increased infrastructure and services.
Technology Accelerates Globalization
Advances in technology now allow even the smallest firms to compete with industry giants as foreign partners and customers are as close as a computer with wifi. And thanks to delivery networks, companies can reliably ship products to –and receive supplies from –just about anywhere in the world.
Instead of reducing the need for travel, these advancements in communication have created more opportunities. Today, executives are traveling more to make contacts, build relationships and sign contracts. This is great news for general aviation as corporate flight departments continue to get busier and expand operations into new and emerging markets.
As of mid-2015, global population numbers reached 7.3 billion. By 2050 the United Nations predicts numbers to reach 9.7 billion. Businesses will have to expand to meet the needs of this growing population. As they do, business aviation air travel will expand even further. Among countries with the greatest population growth, India will have the largest young workforce. With good governance, they should make India’s economy one of the world’s fastest growing through 2030.
As the population continues to grow, people will migrate from rural areas into growing urban cities. By 2050, it’s predicted that two-thirds of the world’s population will live in cities –2.5 billion more than today.
Most growth will take place in emerging markets, with the majority in China and India. As a result, many companies will find opportunities for expansion into these markets and the need for business air travel will continue to increase.
The International Monetary Fund assumes oil prices will average about $50 per barrel for the next several years. Fracking, the end of trade embargos, renewable energy and Saudi Arabia’s commitment to production are putting an end to high oil prices. Low fuel prices make business aviation even more attractive to companies seeking efficiency.
Growth of Entrepreneurship
According to surveys, 63% of Americans in their 20s either own their own business or want to start one. Today, children across the world are learning business skills and launching companies at a rapid rate. China now allows students to defer coursework while trying out business ideas and Europe’s start-up culture is looking a lot like California’s Silicon Valley.
Entrepreneurial activity is great for general aviation as often small startups are acquired by larger companies whose executives need to travel. With “Uber-style” air transport services seeking FAA approval in the US, more like-minded companies are bound to pop around the country.
No doubt about it, world economies rely on business aviation. Today I’ve covered five trends affecting business aviation growth around the world but there are many more. To discover growth opportunities and how your company can get a “piece of the sky” give us a call, we’d love to help you expand across borders.