UBS: Bizjet Market Recovery in Holding Pattern

 - March 30, 2010, 11:46 AM

While UBS Investment Research’s March business jet index reflects a stable market, other indictors showed that the business aviation market recovery has stalled a bit. According to a market report released yesterday by the investment firm, pre-owned business jet inventories were roughly unchanged in February, following declines in each of the prior six months. “While available inventories are now 8 percent below the May peak, they still represent 15 percent of the installed base, well above the historical average at 12 to 13 percent,” noted UBS aerospace analyst David Strauss. Inventory of used younger jets–meaning those less than 10 years old–also remained relatively unchanged, although they are 17 percent below the April peak. Business jet flight activity also showed a flailing recovery, with “cycles sequentially lower in February,” the firm said. Though UBS estimates that business jet cycles in February were 14 percent above year-ago levels, “On a seasonally adjusted sequential basis, cycles declined by 1 percent this time, the second straight decline following the recent run-up.” Nevertheless, UBS’s latest market survey “continues to reflect improving customer interest and a strong 12-month outlook.”