During the recession, many companies decided on budget cuts that would allow them to function normally while not significantly altering their workarounds and the best solution to fit everyone’s expectation was to target the company plane for spending cuts. Several years later, it seems that the decision is being revised as more and more companies seem to be over the long and difficult times they had to endure. Private jet sales have begun to steadily increase, according to the chief executive of General Dynamics Corp.
The manufacturers of Gulfstream jets are enthusiastic about the constant increase in jet sales. They say that corporate customers are back and intend on purchasing more and more private jets due to wealth redistribution tendencies. Not only General Dynamics Corp. are experiencing an increase in sales, Pratt & Whitney have also noticed a positive trend.
The president of the aforementioned jet engine maker declared that for the first time since 2011 (when sales hit bottom), deliveries are beginning to grow once more. Back in 2013, total business jet deliveries had been estimated at around $20.9 billion, while in 2008, they were valued at $24.7 billion. The year 2012 was catastrophic for the industry as sales were estimated at around $18 billion.
Shipments also experienced an enormous drop in 2012 (a 48 percent drop from 1,313 in 2008 to 672). While some sectors have indeed been seeing excellent signs, the market has not been improving all around. It seems that large-cabin planes are being sought after, whereas small- and mid-sized planes sales are still at a standstill. Analysts explain that the poor performance mid-sized- and small jets seem to be having is due to tight crediting conditions, whereas the larger jet purchases are more likely to be self-financed. Moreover, as the purchase of a private jet plane might rely on the approval of a credit, it is still hard to finance some purchases as credit markets have not yet fully recovered.
Analyst Christian Mayes stated that the challenge for larger jets is also smaller due to the fact that rich celebrities can always afford multimillion-dollar jets regardless of the current worldwide financial situation. They rely on getting from A to B in a heartbeat and they are not the only ones. Mid-level managers are also in a similar situation, as it seems that not only chief executives require cutting travel time. When your job involves running multibillion-dollar companies, there is no time to be wasted, and these are exactly the buyers of business jets even in poorer economies.