J.P.Morgan: Bizjet Recovery Continues at Uneven Pace

 - May 9, 2013, 3:45 PM

The business jet market remains highly mixed as it continues on its recovery path, according to the latest business jet monthly report from J.P.Morgan North American Equity Research. Large-cabin jets and an improving pre-owned market are helping the recovery, while light jets and lower flight activity are acting as drags.

J.P.Morgan aerospace researchers said that first-quarter earnings reports for OEMs affirm weak light jet demand, supporting the view that demand for these aircraft is “unlikely” to pick up in the near term. Though it does not characterize demand for larger jets as “robust,” J.P.Morgan says it is holding up better than demand for smaller jets.

Meanwhile, pre-owned business jet inventory fell by 0.1 percentage points last month, to 10.1 percent of the installed base of in-production models. This is the lowest level of inventory since September 2008, J.P.Morgan notes. Average asking prices are also firming up, increasing by 0.2 percent month-over-month in April, the firm says. Large-cabin jet pricing was up 1.2 percent but this was mostly offset by a 2.9-percent decline for midsize jets and “flattish” pricing for light jets.

Flight operations, however, are still not growing. According to J.P.Morgan, U.S. flight ops fell 0.6 percent year-over-year in March, “as activity remained weak.”