Forecasting Demand for General Aviation Aircraft in the United States

Abstract

The general aviation aircraft market, which consists of business jets, private jets, and other personal aircraft (any aircraft other than commercial airliners or military aircraft), has operated on a make-to-order basis for many years. This thesis explores the possibility of changing this production strategy to one of make-to-stock, to produce aircraft in advance of future demand. The first requirement of the make-to-stock business model, and the focus of this thesis, is the process of demand forecasting. Using several different forecasting methods for each aircraft model, we forecast future aircraft demand using a combination of historical sales data and outside economic factors. We then test the accuracy of these different methods to understand their usefulness in planning for future demand, as well as to understand whether accurate demand forecasting is even possible in this industry. This thesis demonstrates that, for the most common general aviation aircraft models, usefully accurate demand forecasting is indeed possible—the methods we present in this thesis can, on average, predict future demand within four aircraft up a year into the future—but more work is necessary to improve the accuracy of the various methods presented, particularly for less-common aircraft.