Business jet demand has not recovered in line with corporate profits as it has in the past. J.P. Morgan aerospace analyst Joseph Nadol III attributes the sluggishness to “the stigma attached to bizjets during the recent recession and a focus on cost cutting among corporate customers. We estimate that 2013 U.S. corporate profits were up about 50 percent from the 2008 trough, whereas bizjet deliveries have yet to turn up decisively.”
J.P. Morgan North American Equity Research’s latest business jet monthly update, released yesterday, paints a somewhat optimistic picture even though the data remains “mixed.” It said that business jet flying activity picked up steam in October, while pre-owned inventories continued to dwindle last month, settling at 10.3 percent. However, it is concerned that pre-owned prices haven’t yet found their footing.
There is “uneven progress” toward recovery, JPMorgan said in its latest business jet market update.
“Will the overhang finally abate enough in 2011 to drive new [business jet] orders?” JP Morgan North American Equity Research aerospace analyst Joseph Nadol III asked in his firm’s latest monthly business jet report, released on Tuesday. Citing a “significant overhang” of pre-owned jets available at attractive prices, the report said business jet demand remains “anemic” while new aircraft backlogs continue to decline.
JPMorgan’s latest business jet monthly report, released yesterday, indicates that October was another month of modest improvement in aircraft demand and utilization. Further, pre-owned business jet inventories fell for the third straight month, “and the peak for this cycle now seems more firmly behind us, but they remain at very high absolute levels,” noted JPMorgan aerospace analyst Joseph Nadol III.
J.P. Morgan’s latest business jet report indicates “evidence of stabilization” in the business jet market “but no improvement.” According to the report, pre-owned business jet inventories remain at record highs–staying at about 14.5 percent of the in-service fleet for the fifth consecutive month–but have not gotten much worse. Pre-owned aircraft prices have continued “a steady downward march toward supply-demand equilibrium,” noted J.P.
The business jet market is headed for a 15-percent downturn following a peak in deliveries in 2010, according to J.P. Morgan industry analysts. However, the downturn will be shallower than the previous slowdown in 2001 and 2002, which resulted in a 31-percent decline.
The business jet market is headed for a 15-percent downturn following a peak in deliveries in 2010, according to J.P. Morgan industry analysts. However, the downturn will be smaller than the previous market slowdown in 2001 and 2002, which resulted in a 31-percent decline.