Business Aviation and World Trade

Alasdair Whyte
By Alasdair Whyte September 9, 2016 15:52

It will be of no comfort to sailors stuck on ships outside harbours, but the slowdown in world trade that brought about the collapse of Hanjin Shipping last week is also not good for business aviation. The World Trade Organization says that trade – which is obviously linked to world GDP – grew steadily during the 1990s. World trade is more volatile than GDP however. There was then a boom in world trade between 2000 and 2008. In 2009 global GDP fell 2%. World exports fell 12%. Trade bounced back quickly – as did orders for large cabin business jets – in 2010 and 2011. But since then growth has slowed down.

World trade is still growing but not at the same pace as in the 2000s. The problem for shipping companies is that they have added capacity faster than demand. The same was true with large cabin aircraft deliveries.

It is, of course, not the only driver of business aviation traffic or aircraft sales – GDP, the number of high net worth individuals, confidence and corporate profits are all important (and as this graph shows the two are not perfectly correlated).

But whilst the summer has been slow for many, at least we are not stuck out at sea.

matts-graph1

 

Alasdair Whyte
By Alasdair Whyte September 9, 2016 15:52

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