JPMorgan: Bizjet Recovery Path Is ‘Uneven’
“We remain guardedly optimistic about a recovery in new business jet demand this year, but the path is a winding one and data points are mixed,” JPMorgan aerospace analyst Joseph Nadol III said in his firm’s latest monthly business jet report, released late last week. “In March, for example, used inventory ticked up for the first time since October.” The increase was slight–up 0.1 percentage points, to 11.1 percent–“but a further decline would have inspired more confidence.” Likewise, the report notes, average pre-owned aircraft prices last month were down 0.1 percent, to $11.3 million, after recovering 3.1 percent from the low of $10.8 million in December. By category, midsize jet prices took the heaviest hit, declining 2.4 percent, while large-cabin jet pricing increased by 0.5 percent and light jet prices remained flat. Most business jet models, however, saw price increases, and the JPMorgan aerospace analysts still see a trend toward firming prices. “The uneven data in the used market echoes recent readings from the new market, where Bombardier is showing solid book-to-bill ratios and growing optimism, while Dassault continues to report net cancellations,” Nadol noted. “As we evaluate the mixed data points, however, it is important to remember how much worse conditions were even a few short months ago.” First-quarter results will start to be released later this month, JPMorgan added, which will bring more clarity to demand for in-production business jets.