After years of growing demand, and a significant backload of orders, the business jet market forecast seems to indicate that a decline in business jet sales is looming on the horizon. As more and more manufacturers enter the very light and light jet markets, companies like Bombardier, Cessna, Falcon Jet and Hawker Beechcraft are keeping a keen eye on business aviation activity.
While the U.S. economy continues to display weakness, it isn't reflected in sales in the business jet market while everyone from Asian business tycoons and the Middle Eastern oil rich class continue to order more and more Challenger and Global Express business jets.
Some manufacturers of business jets, however, have noted a slowdown in business jet order activity, particularly in the United States. Recently Cam Doerksen, an analyst for Versant Partners, noted in a report to clients that "Several of Bombardiers' competitors have noted a slowdown in business jet order activity, particularly in the United States." Further, the National Business Aircraft Association recently reported that the sale of jet fuel has declined by 10 to 20%. Doerksen pointed out that "With economies around the world showing weakness, softer demand for business jets seems increasingly likely."
Another disturbing development is the lack of news from Bombardier on potential orders for its new wide body series of regional jets, and the plummeting new orders of commercial jet aircraft while troubled airlines are trying to figure out how to survive. To many it seems that commercial jet sales have fallen off of a cliff.
In addition, more and more used business jets are entering the marketplace as operating costs are causing some companies to reevaluate their use of corporate aircraft in the face of a weakining economy. This might be good news for buyers with cash, but bad news for business jets manufacturers that have experienced phenominal growth over the last decade. Keep your eyes peeled as this story continues to develop.
Until next time keep your wings straight and level Hersch!