‘Intermittent’ Bizjet Recovery Continues, Says J.P.Morgan

 - March 19, 2013, 3:40 PM

“New business jet demand remains weak, especially at the small end, but there have been intermittent signs of recovery,” says J.P.Morgan in its latest business jet market report. However, the higher end of the market remains strong while the lower end is still weaker.

Backlog for new business jets remains stable, ending 2012 at about $40 billion, which J.P.Morgan says is consistent with each of the last two years but still down more than 50 percent from the peak in 2008. “We estimate that half of this backlog is attributable to the G650 and the Global [series],” it noted.

Meanwhile, pre-owned inventory of in-production business jets inched up slightly last month, rising by 0.1 percentage point to 10.4 percent. This is still within the 10.2-percent to 10.8-percent range seen throughout last year. On a more positive note, inventory of aircraft less than five years old ticked down 0.1 points to 7.6 percent. “This is high in historical terms, but it is the second consecutive decline, suggesting that the upward trend we observed through much of 2012 may be turning,” according to J.P.Morgan.

Average asking prices rose 0.3 percent last month, “and we expect stabilization at some point…[but] it is too soon to tell whether the improvement indicates that the bottom is at hand.”