UBS Bizjet Survey Says Market Holding Steady

 - May 18, 2010, 12:09 PM

UBS Investment Research’s May business jet index came in at 50, indicative of a stable market and in line with its previous two surveys in January and March. “This recent plateau follows increases in our index over our prior eight surveys, going back to late 2008,” UBS said. Meanwhile, the firm’s “straight up” measure of absolute business conditions climbed 11 percent, indicating modest improvement in overall market conditions since the March survey. “Our survey continues to reflect improving customer interest and a strong 12-month outlook, but remains weighed down by very high used inventory levels,” noted UBS aerospace analyst David Strauss. According to the research company, pre-owned business jet pricing for most models is off by 30 to 40 percent from peak levels, and the decline has moderated prices, although they continue to erode slightly. As for the new aircraft market, UBS’s small-cabin index indicates continued incremental degradation in this segment, while its mid- and large-cabin indices both indicate incremental improvement. UBS believes Gulfstream will benefit from the stabilization noted in the survey, but Strauss is concerned about “the shape of the recovery at Cessna, given significant oversupply, fractional weakness and increased competition at the low-mid end by Embraer.”