Consultant Sees Shrinking Business Jet Backlogs

November 14, 2008, 10:21 PM

A U.S. consultant who provides market analysis to the investment community said last week that the peak for business jet backlogs likely occurred in the third quarter and will now begin shrinking for the predictable future. The world economic crisis, declining corporate profits, tight credit and strengthening dollar are conspiring to put the brakes on business aircraft buying activity at a time when manufacturers are delivering more than 1,000 new airplanes per year, noted Brian Foley, founder of Brian Foley Associates. “This in and of itself will work to deplete the backlog at a meaningful clip,” he said. Exacerbating the fall off, Foley also predicted buyers will begin canceling airplane orders as their progress payments to manufacturers come due, with double-digit percentage order cancellations likely to be the norm. “We won’t know the full extent of the order fallout for another year,” he said.

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