Second-quarter business jet deliveries climbed by 30 percent in North America, but this gain was more than offset by deficits in the rest of the world, according to data released yesterday by UBS Global Research. Global business jet shipments, excluding very light jets, fell 1 percent during the quarter, dragged down by losses in other world regions: -50 percent in Asia-Pacific outside China/India, -39 percent in China/India, -23 percent in Western Europe and -21 percent in emerging countries in Europe, the Middle East and Asia.
“We think a sustained recovery in business jet utilization is necessary to drive improvement in the new aircraft cycle,” UBS Investment Research aerospace analysts said in their latest business jet market update, released yesterday. “Without a recovery in utilization we still see the market as oversupplied.”
UBS Investment Research’s latest Business Jet Market Index dropped to 39 from 41 in May. The index measures “total value” in a survey of 131 “U.S. domestic and international broker/dealers, manufacturers, fractional providers, financiers and others,” according to UBS. The majority, 63 percent, are brokers/dealers.
The survey doesn’t assess absolute business conditions but measures changes in respondents’ views. The index is near a four-year low, “and well below the 50 mark that is indicative of sequential improvement.”
“We believe the recent improvement in our survey and many of the other key indicators that we monitor, including increased flight activity and lower used inventories, are reflective of an early-stage recovery,” UBS Investment Research U.S. aerospace and defense analyst David Strauss wrote in his firm’s latest monthly business jet market report.
In its latest monthly business jet report, released last week, investment research firm UBS saw a slight increase in the overall used aircraft inventory in November, its fourth straight monthly increase following a steady declining trend over the past 14 months. Available aircraft inventories were 3 percent higher than those in July.
Conditions for general aviation businesses “have noticeably improved” in the year since the last NBAA Convention, according to New Jersey-based aviation consultant Brian Foley. “There’s an entire spectrum of the industry seeing these better results, including MRO, FBO, charter and fractional companies,” he said.
The business jet market index from UBS Investment Research last month fell a further 8 percent, to 37, the second consecutive decrease and below the threshold of 50–the median above which a growing market is indicated and below which deterioration is seen. This follows a stable first half, in which the index held at 50–meaning stabilized conditions–for three consecutive surveys.
The latest business jet market index from UBS Investment Research fell a further 8 percent, to 37, the second consecutive decrease and below the threshold of 50–the median above which a growing market is indicated and below which deterioration is seen. This follows a stable first half, in which the index held at 50–meaning stabilized conditions–for three consecutive surveys.
UBS Investment Research’s May business jet index came in at 50, indicative of a stable market and in line with its previous two surveys in January and March. “This recent plateau follows increases in our index over our prior eight surveys, going back to late 2008,” UBS said.
While UBS Investment Research’s March business jet index reflects a stable market, other indictors showed that the business aviation market recovery has stalled a bit. According to a market report released yesterday by the investment firm, pre-owned business jet inventories were roughly unchanged in February, following declines in each of the prior six months.
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