Last year “should mark a bottom” for the business jet market, but the path of recovery is “unclear,” according to J.P.Morgan’s latest business jet monthly report. “We estimate that there were about 650 business jet deliveries last year, which would represent a 43-percent decline over five years. Deliveries in 2014 should be up–we estimate by about 10 percent–with help from new and upgraded platforms,” it noted.
Supply chain management
Gulfstream Aerospace will break ground on a new product-support distribution center in Savannah, Ga, late this month or early next. It is scheduled to enter service early next year. The new facility, announced yesterday, will house more than 300 employees and approximately $900 million in parts and materials inventory.
Heli-One has enhanced its website so customers can go to its helicopter Exchange Parts Inventory Channel (Epic) pages. The Epic feature enables customers to do more by connecting them to two searchable databases: Heli-One’s exchange component pool database or its surplus parts inventory database of almost 1,900 items.
As the Great Recession moves into its sixth year, the market for used business aircraft remains something of a quagmire, with some models still searching for a price bottom. But there are bright spots where values have stabilized, and inventory overall is headed in the right direction.
For the first time since the used jet market began to unravel, inventory sits below the level of October 2008. Year-over-year for the past four years, more inventory has been departing the market than has been arriving onto the market and this year could prove a continuation of that trend, with inventory already below last year’s 12-month moving average as the market enters what is historically the most active quarter for aircraft sales.
Zenith Aviation, a distributor of Dornier 328 parts and spares, is seeking multiple aircraft parts and spares consignment opportunities. The company recently invested more than $3 million in additional climate-controlled warehouse space and an automated inventory storage and retrieval system. The 44,000-sq-ft warehouse can hold up to 500,000 individual line items. According to the company, the consignor retains title to the parts until they leave the Zenith warehouse.
FedEx Express awaits the result of Supreme Court proceedings in the Philippines that could determine its ability to fly freight within the archipelago.
Recent remarks by Boeing CEO Jim McNerney about creating a so-called no-fly list of suppliers who fail to meet certain standards for quality, speed of delivery and cost has turned a spotlight on the company’s four supply chain management heads, all tasked with implementing the boss’s decree within their respective areas of responsibility and keeping vigil for “divide and conquer” tactics sometimes employed by program partners.
As we approach the halfway mark of the year, the used jet market continues to show improvement in terms of sales, but at the detriment (if you’re a seller) to price. Every day for the past several years, pricing has become more and more attractive to buyers. In retrospect, it seems that no seller left any money on the table when they rolled out of their previous aircraft and turned the keys over to a new owner. That said, buyers are not cloistered away and continue to buy actively, taking advantage of values no one could have ever predicted.
Pre-owned business jet and turboprop inventories continued their downward trajectory last month, according to data released yesterday by business aviation market information firm JetNet. But the overall picture of the pre-owned market remains mixed at best.