Pre-owned Bizjet Inventories Hold Steady, UBS Says

 - June 18, 2009, 11:44 AM

“Available business jet inventories look finally to be stabilizing,” UBS Investment Research noted in its recently released business jet update, though pre-owned inventory remains at record-high levels at 18 percent of the in-service fleet. While still 55 percent above prior-year levels, available business jet inventories were roughly unchanged sequentially last month over April, though a 1-percent decline in young (less than 10 years old) available aircraft listings was reported, UBS said. New delivery position inventories have also declined sequentially in each of the past two months. However, pre-owned business jet pricing is still weakening. “We estimate average asking prices for most young aircraft models have now fallen 30 to 40 percent from peak levels,” UBS investment analyst David Strauss said, “with pricing down another 3 to 4 percent in the past month. While our survey of industry professionals suggests some incremental interest at these levels, we think record-high used available inventories will continue to overhang orders, pressure existing backlogs and force further production cuts.”