J.P.Morgan: Bizjet Market ‘Tentatively Firming’

 - February 13, 2014, 2:20 PM

According to J.P.Morgan North America Equity Research’s latest monthly business jet report, data continues to show a “tentatively firming” market and the analyst believes that “2014 will be a key inflection year for business jet demand.” Its most recent data shows a continuation of recent trends: declining used inventory and growth of flight operations–both of which bode well for new aircraft demand–but declining pre-owned pricing.

The firm’s aerospace analysts still expect new business jet models and improving underlying demand to drive up deliveries by about 10 percent this year, “making 2014 the first up year since 2008.” However, they warned that new aircraft demand currently remains “tentative” and any recovery is likely to be “gradual.”

Overall, inventory of pre-owned, in-production business jets fell 0.3 percentage points month-over-month in January, settling at 8.9 percent. Inventory of young (five years old or less) business jets remained stable at 5.5 percent last month and is down 2.1 percentage points from a year ago.

Average asking prices eroded 1.1 percent from December to January, while pricing was off 11.4 percent from January 2013. However, light jet pricing is providing a beacon of hope, up 1.6 percent month-over-month, which J.P.Morgan said is the fourth consecutive sequential increase.