Analyst Sees Grounds for Optimism In Europe's Bizav Market
The business aviation industry has been counting on a sustained uptick in the European market for almost a decade, only to be disappointed by what at best has been a sluggish rate of growth. But ahead of this year’s European Business Aviation Convention and Exhibition in Geneva, seasoned industry analyst Brian Foley predicted that the tide could at last be turning for the continent.
“Recently, there have been fresh dynamics quietly developing that could help stimulate this sleepy market,” said Foley. He cited three factors to support his renewed optimism: signs of improved political stability, recovery in European stock markets, and a strengthening of the euro currency.
According to Foley, the victory in the recent French presidential election of centrist candidate Emmanuel Macron over hard-right rival Marine Le Pen seems to have dampened concerns about further disintegration within the European Union. “While this event in no way eliminates the angst over the future of the Eurozone, it at least takes it down a notch for now,” commented Foley. “This in turn could manifest itself into some increased level of private aviation activity.”
Leading European stock markets in London, Frankfurt, and Paris are now at their highest levels since the financial crisis of 2008, and some indices have even surpassed pre-crisis levels. Foley maintained that this translates into improved liquidity for individuals and companies with the desire to fly privately.
So far in 2017, the euro currency has recovered 5 percent in value and the U.S. dollar has weakened slightly. “Business aircraft are priced in dollars, so a stronger local currency makes the purchase price look a bit more palatable,” said Foley. “Right after the French election, the euro rallied to its highest level in around six months.”
That said, Foley tempered his more bullish outlook with a caution: “While all these factors add up to a positive for business aviation in Europe, it will be somewhat offset by the decade-old ‘do more with less’ mentality that will be difficult to erase.”