Market Trends of Fixed Wing Turbine Aircraft Industry
Business Jet Segment Will Drive the Market Due to Increase in High-net-worth Individuals
- High-net-worth individuals (HNWIs) enjoy a global lifestyle, and extensive air travel is often a requirement for them. They are active players in the global general aviation market and often opt for fractional ownership or charter private planes, apart from owning private aircraft. However, a section of the wealthy population also opts for individual or commercial ownership. Opting for a private aircraft is an efficient and cost-effective solution for Ultra HNWIs (UHNWIs) to cater to their busy schedules across multiple countries and time zones.
- Although the UHNWIs in the United States dominated the private aviation market for decades, regulatory changes in emerging economies have resulted in the internationalization of the demand for private aviation. Middle Eastern UHNW individuals prefer to buy more expensive planes than their counterparts, nearly 2.5 times higher than the global average, primarily due to their luxury requirements.
- Asia-Pacific confirmed its status as a repository of HNWIs with a major portion of the HNWI wealth globally. The private aviation industry in Asia-Pacific has been growing rapidly, largely due to the region's rapidly growing digital and high-tech economy, which generated a pool of wealth among young entrepreneurs. The region's private jet charter market's growth has been on par with the global charter market. Compared to complete ownership, there is an increasing demand for chartering and fractional membership in Asia-Pacific.
- Thus, the factors like the increasing number of hiWIs and the developing economy has been the main driver for the purchase of business jets. Though the COVID-19 pandemic affected the wealth of these populations, at least in some countries, the overall impact of the pandemic on a majority of the UHNWI is deemed to be less, which is a positive sign for the business jet industry.
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Asia Pacific is Expected to Lead the Market During the Forecast Period
- Out of the total percentage of a millionaire in the world, 17% of the percentage comes from the Asia-Pacific region, which is 10,755 thousand people. The gross domestic product (GDP) of Asian countries like China and India has shown good growth in terms of GDP and economic development. For instance, For India, nominal GDP or GDP at current prices in Q1 2022-23 was estimated at USD 883.06 billion, as against USD 697.96 billion in Q1 2021-22, showing a growth of 26.7 percent as compared to 32.4 percent in Q1 2021-22.
- As of 2021, Asia-Pacific accounted for the highest number of ultra-high-net-worth individuals (UHNIs), with 831 (38%) of the super-rich residing in the region, where billionaire wealth now totals USD 3.3 trillion. Mainland China emerged as the region's top market for wealth creation, with 415 billionaires, followed by India (114), Hong King (65) Taiwan (40).
- As the high net population increases in the region, the number of business jets also increases. For instance, as of March 2021, Japan had a total fleet of 97 business jets. In 2020, two new business jets were added to the country's fleet, down from seven jets a year ago. One jet was a large jet, while the other was a mid-size jet.
- Considering the economic development of the Asia-pacific region and the increased number of millionaires in the Asia-pacific market will grow in the coming years.
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