Business Aviation in Russia Loses Traction

Leonid Faerberg / Transport-photo.com

By Anna Nazarova

For the past two or three years, international analysts have observed a reduction of Russia’s share on the global business aviation market. The trend is being explained, among other factors, by the military aggression in Ukraine, the overall political situation, the strong US dollar as compared to the national currency, and most importantly, the falling oil and gas prices. While it is too early to panic, the question arises as to whether the country’s bizav segment really is as promising as many believe.

One of the most prominent indicators of a changing global attitude towards Russia and the CIS comes in the form of Bombardier Aerospace’s annual forecasts. The Canadian manufacturer is known for its overly positive, sometimes evidently overrated ten-year forecasts for global business jet deliveries. However, when it comes to Russia and the CIS, these predictions have been growing consistently more conservative of late. In 2009, Bombardier projected 600 new business jet deliveries to the region; in 2015, that figure dropped to 510, and this year, to 400. Even so, Bombardier, whose positions in Russia are historically strong, continues to believe that the market will recover. Jean-Christophe Gallager, Vice-President for Strategy, Marketing and Innovation, says the company’s share in the total number of new business-jet deliveries to Russia and the CIS will exceed 50% in the next 10 years, mostly in the most expensive and spacious large cabin jets and heavy jets classes. Bombardier hopes that the oil and gas prices will bounce back, but admits that business aviation deliveries to Russia have reached the lowest position across the world, with the market expected to grow by a meager 0.6% this year.

The slumping oil prices are evidently affecting not just the actual and forecast business jet deliveries to Russia but also the global interest in the country in general: analytical firms like Teal Group, Brifo, and Rolland Vincent have dropped the country from their forecasts altogether.