Business Jet Aircraft Industry: Structure and Factors Affecting Competitiveness

Investigation No. 332-526
USITC Publication 4314

Summary

The U.S. business jet manufacturing industry is facing new challenges as it competes in a market environment characterized by tightened credit, uncertain government funding for research and development (R&D), and new entrants into the industry, reports the U.S. International Trade Commission (USITC) in its new publication.

Completed at the request of the U.S. House of Representatives Committee on Ways and Means, the report the report covers the period 2006-2010, with data from 2011 as available, for business jets at or below 50,000 pounds maximum takeoff weight.

The USITC found:

• Three of the world's six leading producers are headquartered in the United States, where the majority of production occurs. However, all six of the original equipment manufacturers conduct at least one production-related activity in the United States.



• Global deliveries of business jets fell sharply during the period studied, with customers for the very light and light business jets, the market segments in which U.S. producers are most active, being the hardest hit during the recent recession.



• The U.S. and European markets continued to account for the largest number of business jet deliveries during the period studied, despite declines in total business jet deliveries. At the same time, the share of global deliveries to emerging markets such as China, India, and Russia grew during the period.



• Investment in R&D, along with business and technological innovation, are keys to success in this industry. In addition to funding from business jet manufacturers and suppliers, financial support for aeronautics R&D is provided by most governments to foster important national goals. The business jet sector, however, reportedly has had the least government R&D participation among aerospace sectors globally.



• Export credit agencies (ECAs), such as the U.S. Export-Import Bank, are available sources of funding for export sales of business jets. ECAs are likely to play an increasing role in providing sales finance to the industry.



• The future competitiveness of the U.S. business jet industry may be influenced by changes in such factors as regional demand, new entrants into the industry, workforce characteristics, government regulations pertaining to the environment, airspace usage, and aircraft user fees. In some cases, the impact of these changes, such as the opening of airspace in China, may benefit U.S. industry, whereas other changes, such as a proposed aircraft user fee in the United States, may pose challenges.

The USITC’s report is now available at:
http://www.usitc.gov/publications/332/pub4314.pdf

Also available on CD-ROM and in print; call 202.205.2000 for more information.