Third Largest Market For Corporate Aircraft Is South Of The Border

Latin American countries from Mexico to Argentina are poised to play an important part in general aviation's economic recuperation, according to aviation consultant Brian Foley (pictured).

"Latin America has historically been the third largest market for corporate-type aircraft," Foley noted.  Worldwide, there are some 30,600 private business jets and turboprops with 62% based in the U.S. and Canada, followed by 13% in Europe and a surprising 12% in Latin America.   In terms of fleet composition, jets outnumber turboprops by two to one in North America and Europe.  In Latin America, with its often challenging airport environment, the utilitarian turboprops have a slight edge.

"But what the world is watching now is market activity," Foley said, "and this is another area where Latin America will likely shine.  Europe's debt crisis and the lagging U.S. economy have made those aviation markets very sluggish.  Latin America, being relatively insulated from these difficulties, should later prove to have been a bright spot in the overall recovery."

Foley says the confidence is in part based on regional stock-market performance, one of several indicators of general aviation health.  For now, the São Paulo stock exchange is running at only 15% below its all-time high set in 2008.   For comparison, the U.S. Dow Jones Industrial Average is nearly twice as far off peak (29%), and the European markets are off by almost three times that amount (43%).   This is vitally important, Foley points out.  "Healthy stock markets mean that corporate profits and personal portfolios are strengthening, providing not only the means but more importantly the confidence to purchase aircraft."

While it's natural for aviation companies to seek opportunities in fast-growing Asia, Foley advises them not to turn their backs on traditional markets like Latin America.  "Bear in mind that any growth in China, India and the Middle East, no matter how spectacular, builds on a tiny base representing only 5% of all the world's business aircraft.  The Latin American market is already more than twice that size."

FMI: www.brifo.com