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Business jet makers look to tap surging corporate travel demand at Las Vegas air show By Reuters

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© Reuters. FILE PHOTO – A private jet arrives at Van Nuys Airport in the high desert of Los Angeles County on July 30, 2015. REUTERS/Gene Blevins

Allison Lampert

LAS VEGAS, (Reuters) – Planemakers will likely unveil new models and orders at the largest business jet show in the world this week. They are hoping to capitalize on a surge in private travel. However, executives caution that there may be headwinds from a shortage of capacity.

On Tuesday, the National Business Aviation Association (NBAA), show will return to an in-person format in Las Vegas. This is in response to the strong demand for aircraft following the introduction of COVID-19. It will show how resilient the aerospace supply chain is in difficult logistics around the world.

Travel restrictions have been relaxed, and there has been an unexpected rise in business aviation. In fact, traffic is now up by 5% from 2019. It is taking up more space for private operators, and increasing the order backlogs of planemakers. This has strained both supply and demand for pilots.

Executives said that companies who delayed or laidoff workers during the pandemic were now trying to locate planes and employees.

This has caused flight delays and cancellations in an industry where reliability is a premium. Private operators have been forced to decline business because they are not able to provide reliable service.

According to Ian Moore (chief commercial officer at VistaJet), “Everyone will talk about the same topic: How do we handle this demand?”

“This will be an interesting topic at all the booths and cocktail parties in Vegas this year.

Honeywell (NASDAQ 🙂 predicts a 50% increase in hours flown by business jets in 2021 compared to last year.

General Dynamics’ Gulfstream Aerospace (NYSE:), one of the biggest business jet manufacturers, will not be participating because COVID-19. Recently, the U.S. planemaker announced two new aircraft. Its larger G800 is set to compete with Bombardier Inc (OTC) Inc’s Global7500 and Dassault Aviation SA SA’s 10X in a clash of flying penthouses.

This is good news for private aviation, which still has to recover from the 1,300 planes delivered before 2008’s financial crash. Brian Foley, an aviation analyst said in a recent memo that it was a boon.

Foley indicated that 700 business planes will be delivered in 2021. A ramp-up of production is expected in 2022, as more aircraft manufacturers gain confidence.

Textron Aviation (NYSE) is increasing Cessna production in order to satisfy demand despite challenges with its supply chain. Canada’s Bombardier, however, is still waiting to see how the orders develop.

“We have restructured backlog. I love that prices are reconfirming. But it’s a question of supply and demand,” said Bombardier Chief Executive Éric Martel in a recent interview. “We have to see what’s going to happen in the next few months.”

An executive of one company jet manufacturer spoke under anonymity to say that some aircraftmakers are looking for signs of a similar bubble to the demand before 2009’s economic crash, which saw them left with no sales of jets.

It’s a mystery to many whether it really is or just 2007 again.

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