“Demand for business jets is far from robust, but at the margin some developments suggest improvement,” J.P.Morgan aerospace analysts said in their latest business jet monthly update, released on Tuesday.
With Hawker Beechcraft attempting to clear the final hurdle in Chapter 11 proceedings and emerge from bankruptcy, Judge Stuart Bernstein said earlier today that he would approve the joint plan of reorganization for all but one of the subsidiaries currently under Chapter 11 protection. Bernstein reserved judgment regarding the Hawker Beechcraft Corp.
JPMorgan North America Equity Research is forecasting a 5-percent rise in business jet deliveries this year, according to the firm’s latest monthly business jet report. It predicts that 627 business jets (excluding very light jets) will be shipped this year, compared with an estimated 596 jet deliveries last year.
Business jet demand “remains weak, but is not getting much worse,” JPMorgan Investment Research noted in its latest business jet monthly report. This sentiment is reflected in its forecast of 2 percent growth in business jet deliveries for next year.
At the NBAA Convention later this month in Orlando, Fla., “Manufacturers will likely emphasize the potential for rising deliveries beyond 2012, pockets of demand strength and the products they are developing,” JPMorgan aerospace analysts wrote in the firm’s latest business jet monthly report, released yesterday. “However, with U.S. and European flight ops flat to down year-to-date, Chinese demand facing pressure and OEM backlogs yet to turn up decisively, optimism should be muted.”
JPMorgan downgraded Embraer yesterday from overweight to neutral, in large part due to concerns about Embraer’s airliner business. However, the investment firm noted that “continued weakness” in flight operations and other indicators “are leading us to dial back our business jet delivery forecast,” but it still predicts healthy growth in this segment.
“Business jet deliveries rose 11 percent year-over-year in the first half of the year, prompting some commentary that a recovery is under way, but we view this conclusion as premature,” JPMorgan North American Research said in its latest monthly business jet outlook, released yesterday. “Tougher comparables and fewer Hawker deliveries post-bankruptcy should result in a second-half decline that holds deliveries flattish for the year.”
Last week, JPMorgan economists lowered their global GDP growth forecast for the second half of this year by 0.5 percentage points, to 2.1 percent. “If it persists,” JPMorgan Equity Research said in its just-issued business jet monthly report, “the disappointing economic data should pressure new bizjet demand, further postponing a recovery in a market in which 2011 deliveries were still about 40 percent below the 2008 peak.”
“We expect a bounce in 2012, though we believe the [business jet] recovery will start slowly and we forecast delivery growth of 8 percent,” JPMorgan Investment Research said in its latest monthly business jet market report, released today. However, evidence of a recovery on the low end is still “not compelling,” it noted.
“We sense an eagerness for a pickup in the long-depressed business jet market, particularly at the lower end, but we continue to observe mixed signals,” JPMorgan Investment Research notes in its latest market report. Despite the conflicting signals, the investment research firm still predicts an 8-percent rise in business jet deliveries this year.
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