The financial end game will be accelerated by unprecedented demand, which is fast becoming a double-edged sword. Either operators will be able to pass rising costs along to consumers, or they will go bust. Price pressures will also dramatically impact aircraft operators, as we’re seeing with pre-emotive salary increases by major airlines, and business aircraft fleet operators. Without question, the consumer nations and major trading blocs will prevail, but the cost will be far higher than anyone seems willing to acknowledge.Īnd what of business aviation? Costs will rise well ahead of contract cost escalators, squeezing margins for current manufacturer backlog. This is turning into a global economic war, pitting democracies against despots.
With China declaring that they will support the Putin regime, it’s inevitable that China will face increasing economic pressure, as Wesern trading partners seek to eliminate the influence of Putin and his geopolitical ambitions. His war, and the Western response, is already having a devastating impact on world economies. Putin has declared his end game: destroying any influence the US has over the current world order. Worse, Russia are blocking grain exports, which will have fatal consequences for nations who depend upon Ukrainian grain exports, to feed their people. Russia is tightening a noose around Western European nations, cutting-off or restricting energy supplies, or demanding payment in Roubles, to prop-up their weakening economy. The UN and NATO have suggested that the Ukraine-Russia war will drag on for years. These pressures are emerging at a time when there is increasing uncertainty about how costs will evolve.
After three decades of stable costs, business aviation is starting to reel from rising costs in areas they have long controlled, with an iron fist. I have noticed that these pressures are receiving scant coverage in trade and business media, as they relate to business aviation. Inflation, Interest Rates, Supply Chain Disruptions, Energy Costs & Worker Shortages: The Fallout
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