LAS VEGAS, Oct 11 (Reuters) - Planemakers are unveiling new
orders and fresh models at the world's largest business jet show
this week as they aim to cash in on a boom in private travel,
but executives warn of headwinds due to a capacity crunch.
The National Business Aviation Association (NBAA) show
returns to an in-person format starting in Las Vegas on Tuesday,
testing the strength of demand for jets following the emergence
of COVID-19. The show will also shed light on the resilience of
the aerospace supply chain, given strained logistics worldwide.
Brazil's Embraer said on Monday morning it signed
a deal to sell 100 Phenom 300E planes for more than $1.2 billion
at list prices to NetJets, with deliveries starting in 2023.
U.S. planemaker Textron Aviation announced updates
to the models of two of its Cessna Citation jets, the M2 and
Easing travel restrictions and the lure of private flights
have led to an unexpected surge in business aviation, with
traffic rising from 2019 levels. That is filling seats for
private operators and expanding order backlogs for planemakers,
straining the supply of jets, parts and pilots.
Craig Ross, head of California-based Aviation Portfolio, an
adviser to business jet clients, said he is seeing cases of
flights getting canceled because of a lack of pilots and delays
from a shortage of plane parts for maintenance.
That is occurring in an industry that charges top prices for
reliability, with some private operators turning down business
to protect service.
"Everyone will be talking about the same thing: 'How do we
deal with this demand,'" said Ian Moore, chief commercial
officer of private jet company VistaJet. "I'm sure that's going
to be a topic at every booth and every cocktail party in Vegas
One top supplier, Honeywell International Inc, is
predicting a 50% rise in business jet flight hours in 2021 over
General Dynamics Corp's Gulfstream Aerospace, one of
the largest business jet makers, is not participating due to
COVID-19. The U.S. planemaker recently announced two new jets,
with its larger G800 set to clash with Bombardier Inc's
Global 7500 and Dassault Aviation SA's 10X in
a battle of flying penthouses.
It is a boon for private aviation, which has yet to rebound
to the 1,300 aircraft delivered in 2008 before the financial
crash, said aviation analyst Brian Foley in a recent note.
Foley said he expects around 700 business aircraft
deliveries in 2021, with a ramp-up in production expected to
begin in 2022 as planemakers gain confidence the surge is
While Cessna business jet maker Textron Aviation is raising
production to meet demand despite supply-chain challenges,
Canada's Bombardier is waiting to see how orders evolve.
"We've rebuilt backlog and I like that price is re-firming.
But its a question of supply and demand, Bombardier Chief
Executive Eric Martel said in a recent interview.
Some planemakers are watching for signs of a bubble similar
to the demand ahead of the 2009 economic crash, which left them
on the hook with unsellable jets, said an executive at one
corporate jet manufacturer who spoke on condition of anonymity.
"Some are wondering is it real or is it 2007 over again?"
(Reporting By Allison Lampert in Las Vegas; Additional
reporting by Shreyasee Raj in Bangalore; Editing by Steve
Orlofsky and Peter Cooney)