Private jet makers tout efforts to tackle emissions and backlogs at airshow

ORLANDO, Oct 17 (Reuters) – Aircraft makers will showcase their latest models and efforts to cut emissions at the world’s largest business jet show this week, as the boom in private travel faces climate pressure, supply chain issues and economic uncertainty.

The National Business Aviation Association (NBAA) show begins Tuesday in Orlando in the shadow of a United Nations aviation goal set this month to achieve net zero emissions by 2050. It will also test the strength business jet demand, which surged during COVID-19 and boosted order books, but may now face a weaker economy. Read more

Honeywell International Inc (HON.O) has forecast up to 8,500 new business jet deliveries worth $274 billion from 2023 to 2032, up 15% from last year’s outlook , while use in 2022 is expected to increase by 9%. Read more

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While demand remains strong, some buyers are also hesitant, said Zipporah Marmor, incoming president of the International Aircraft Dealers Association (IADA).

“Those who can wait are waiting to see what the new year brings, to see if there will be more inventory, to see if there will be any easing in prices,” Marmor said.

Despite a strong labor market in the United States – the world’s largest market for business aviation – the risks of a slowdown next year are growing as the Federal Reserve steps up its fight against inflation. Read more

Business jets have also become a target of environmentalists – including an activist who burned his arm during a tennis tournament in the fall – because they generate more emissions per person than commercial flights. Read more

Kurt Edwards, chief executive of the International Business Aviation Council (IBAC), said the attacks on the industry are “unfortunate” and fail to recognize the gains from the industry’s use of more efficient aircraft and sustainable aviation fuel (SAF).

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Business jet traffic in the United States recovered faster in 2021 than commercial flight traffic, surpassing 2019 levels. But the number of private flights is now roughly flat compared to 2021, according to Flightaware.

Independent aviation analyst Brian Foley expects private jet use in the United States to drop to more traditional levels this fall.

Favorable tax rules, however, have helped bolster demand this year for used planes, according to U.S. lawyers and brokers.

This is the last year that buyers can deduct 100% of the cost of an aircraft used for commercial purposes on their taxes if the aircraft is acquired and entered into service in 2022.

“People are expecting a very busy fourth quarter,” said Amanda Applegate, partner at Soar Aviation Law. This deduction should drop to 80% next year.

To capture demand at the top of the market, General Dynamics Corp’s Gulfstream Aerospace (GD.N) is showcasing its latest luxury models, the G800 and equipped G700 jets, after an absence from the show since 2019.

Although it’s a seller’s market, aviation attorney Stewart Lapayowker sees some early signs of weakness.

Some buyers who work in real estate and construction, sectors hit by rising rates, are now reconsidering their orders, said Lapayowker, who runs Lapayowker Jet Counsel in Florida.

While the delayed parts haven’t halted used plane transactions, economic sanctions against Russian-owned planes due to the war in Ukraine have actually freed up inspection slots in Europe, said Marble.

“There are a lot of service facilities that used to service Russian-owned planes that all of a sudden got a lot of space.”

Supply chain constraints also continue to weigh on aircraft manufacturers, as some plan to increase production next year to meet demand. Read more

“If you’re not focusing on the supply chain, you’re not doing your job properly,” Vipul Gupta, vice president and general manager of avionics, Honeywell Aerospace, told Reuters.

“My second job is looking for parts.”

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Editing by Deepa Babington

Our standards: The Thomson Reuters Trust Principles.

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