May 2021 brought three news items of interest to anyone paying attention to how the general and business aviation industries are faring as the Covid-19 pandemic winds down in the U.S. Taken together, the top story seems to be cautious optimism tempered by a healthy dose of reality and an understanding that the pandemic may usher in fundamental changes in the ways we travel.
First-quarter delivery results reported by the General Aviation Manufacturers Association (GAMA) show a welcome increase when compared to the same period of 2020, when the pandemic’s effects first began to be felt. Deliveries of new airplanes in 2020 were off by more than nine percent; 1Q 2021 numbers exceeded them, but not the subsequent quarters of 2020.
Avionics sales also were off in 2020, with the Aircraft Electronics Association (AEA) reporting a 26-percent reduction in sales value compared to 2019. (Disclosure: I often provide freelance writing services to AEA.) In 1Q of 2021, sales were off almost 14 percent, when compared with the same period in 2020. That’s not a great sign, but we have to remember that January 2020 was the deadline for ADS-B in the U.S., when sales were high.
Other news is not so good. Aerion Supersonic, the startup developing a supersonic business jet, on May 21 announced it was closing its doors. The company’s statement said, “In the current financial environment, it has proven hugely challenging to close on the scheduled and necessary large new capital requirements” it needed to push toward production.
I have a couple of theories. The first is that the rebound in airframe deliveries reported by GAMA in 2020, after 1Q, reflected pent-up demand. That 1Q 2021 deliveries of new airplanes, 432, did not approach 2020’s 4Q number, 875, says to me that demand has been satisfied and travel needs are being recalibrated. We’ll know more in three months when GAMA’s 2Q data comes out.
By then we’ll also learn more from AEA, whose President and CEO Mike Adamson said, “With avionics sales trending in the right direction over the last nine months, it appears that a slow and steady industry recovery is underway.”
Meanwhile, Aerion’s failure isn’t a huge surprise, but its timing meshes well with my reset theory, which hinges on the worldwide realization that a lot of business travel is unnecessary and the essentials can be accomplished over a video connection, which not coincidentally is greener and cheaper. Many areas of the world, meanwhile, have not seen the vaccination success the U.S. has experienced. As other countries approach our level of vaccination, things may change.
It seems many are rethinking their travel needs. It likely will be a while before the industry knows which way the post-pandemic wind is going to blow.
— Jeb Burnside
