December 20th, 2024 — The private aviation industry has experienced remarkable growth and transformation over the past few years, driven by technological advancements, evolving consumer demands, and a global emphasis on convenience and safety.
As we approach 2025, the private aviation market is poised for further expansion, supported by emerging trends and challenges that will shape its trajectory. Below, we explore key forecasts for the industry’s future.
Market Growth and Demand Drivers
The global business jet market is projected to continue growing, with its compound annual growth rate expected to be at or above 3% from 2019 compared to 2025.
This expansion is fueled by increasing demand for flexible and personalized travel options, especially among high-net-worth individuals (HNWIs) and corporate clients.
The pandemic accelerated a shift toward private air travel due to heightened concerns about health and safety, and although the on-demand charter market has cooled since it’s 2022 levels, the growing popularity of fractional ownership and jet card programs continues to make private aviation more accessible to a broader audience.
Emerging markets in Asia-Pacific, the Middle East, and Africa are expected to play a significant role in the industry’s growth, while rising disposable incomes and expanding business hubs in cities such as Dubai, Singapore, and Johannesburg are likely to drive demand for private aviation services in these regions.
The pre-owned business aircraft sector is expected to experience price stability and healthy trading levels, particularly for newer models, indicating robust demand in this segment.
On-Demand Charter
According to industry analyst ARGUS, the on-demand charter segment is the only area of the market experiencing a slowdown. Total flight hours decreased by 5.2% in the first half of 2024 compared to the same period in 2023. However, a more telling indicator of this decline is the 14.7% drop from the peak recorded in 2022.
New Aircraft Sales
Industry analysts estimate that new business jet deliveries this year are valued at a total of approximately $700 million, with an additional backlog of ordered but yet-to-be-built aircraft worth around $51 billion.
Upcoming Challenges
A lack of qualified aircraft repair technicians, an insufficient number of Maintenance, Repair, and Overhaul (MRO) facilities, and ongoing supply chain delays for parts are leaving many aircraft grounded for extended periods, ranging from days to weeks, with some operators reporting that up to one-third of their fleet is under repair at any given time. Industry experts anticipate these challenges will persist for several more years.
Sustainability and Green Aviation Initiatives
Environmental concerns are increasingly influencing the private aviation market. In 2025, sustainability will be a major focus, with operators and manufacturers investing in greener technologies.
Innovations such as Sustainable Aviation Fuel (SAF) and electric or hybrid-electric aircraft are expected to gain traction.
Governments and regulatory bodies are also likely to introduce stricter emissions standards, encouraging the adoption of cleaner energy solutions – SAFs only account for 0.3% of the world’s jet fuel usage, and is projected to only account for 0.7% by 2025, according to IATA data.
In addition to technological advancements, operators may offer carbon offset programs to appeal to environmentally conscious clients. Consumers—particularly younger generations—are increasingly seeking providers that demonstrate a commitment to reducing their environmental impact.
Technological Advancements and Digital Transformation
Technology will continue to revolutionize private aviation in 2025, with an increase in Artificial intelligence (AI) and machine learning integrated into flight operations, enhancing predictive maintenance, route optimization, and customer service.
Blockchain technology & cryptocurrencies are also expected to streamline booking processes, improve transparency, and ensure secure transactions—there are even some companies looking to leverage the excess electrical output of an aircraft during flight to generate revenue using advanced mining software on-board.
The use of advanced mobile applications and online platforms will further simplify the chartering process, providing users with real-time availability, pricing, and customization options.
Next year should also see more integration of virtual reality (VR) and augmented reality (AR) systems to enhance the customer experience by offering virtual tours of private planes and airport facilities, with these systems already playing a crucial role in pilot training.
Infrastructure Development
To accommodate growing overall demand in the aviation market, significant investments are being made in airport infrastructure, including major projects scheduled to be wrapped up next year in Los Angeles, Pittsburgh, Denver and Houston.
There is also an additional $1 billion in annual funding appropriated for terminal projects at both large & small airports, as part of the Airport Terminals Program.
Fixed-base operators (FBOs) are expanding their facilities to cater to increased business jet traffic, offering enhanced amenities for passengers and crew with continued consolidation and rebranding, as in the case of Signature Aviation (formerly Signature Flight Support) after their acquisition of Meridian Aviation earlier this year.
Smaller regional airports are also becoming critical hubs for private aviation, and projects such as the new ATC tower recently commissioned at Teterboro Airport are expected to continue at these business jet hubs across the country, helping to reduce congestion at major commercial airports and expedite private jet travel.
Urban Air Mobility (UAM)
The rise of urban air mobility (UAM) and air taxis is expected to influence the industry’s infrastructure needs – companies like Joby Aviation and Lilium are prepared to introduce electric vertical takeoff and landing (eVTOL) aircraft into the market, and the development of vertiports and urban heliports will be essential.
The Urban Air Mobility Expo 2025 takes place January 19-22, 2025 in Noida, India.
Economic and Geopolitical Influences
Economic conditions and geopolitical factors have the potential to significantly impact the private aviation market in 2025, according to a recent report from IATA.
Continued economic recovery post-pandemic, coupled with growth in global trade, will bolster demand for business-related travel, however, challenges such as rising fuel costs, inflation, and geopolitical tensions may pose obstacles to growth.
There are several questions in the U.S. regarding the incoming administration surrounding tariffs, trade, regulations, and decarbonization – one example being the inclusion of hundreds of billions of dollars in subsidies for clean energy in the U.S. Inflation Reduction Act (IRA). Depending on the new administration’s view of the IRA, it could potentially impact SAFs and ongoing green aviation fuel production.
The private aviation market is also highly sensitive to regulatory changes; policy changes related to emissions, taxes, and international travel could affect operations and pricing structures, and operators will need to adapt quickly to these evolving conditions to remain competitive.
Looking Ahead
The private aviation market in 2025 is set to be more dynamic, sustainable, and technologically advanced than ever before – with growing demand, a shift toward environmentally friendly practices, and rapid digitalization, the industry is well-positioned for continued success.
However, operators & brokers must remain agile to navigate economic and regulatory challenges while meeting the evolving needs of their clientele. By embracing innovation and prioritizing customer satisfaction, private aviation providers can secure a strong foothold in this thriving and expanding market.