Consultant: expect shrinking backlogs

 - December 1, 2008, 5:01 AM

Brian Foley Associates, a business aviation consultancy that provides market analysis to the investment community, believes the peak for business jet backlogs likely occurred in the third quarter and will begin shrinking for the predictable future. The world economic crisis, declining corporate profits, tight credit and strengthening dollar are conspiring to put the brakes on business aircraft buying activity at a time when manufacturers are delivering more than 1,000 new airplanes per year, noted company president Brian Foley. “This in and of itself will work to deplete the backlog at a meaningful clip,” he said. Exacerbating the falloff, Foley also predicted, buyers will begin canceling airplane orders as their progress payments to manufacturers come due, with double-digit percentage cancellations likely to be the norm. “We won’t know the full extent of the order fallout for another year,” he said.