Notwithstanding Boeing’s announcement in April that it will cut 777 production from seven to five per month starting next June, the world’s two big airliner manufacturers appear out of touch with the harsh reality of their ability to fund aircraft deliveries this year, according to investment banks familiar with the lending environment.
UBS Investment Research’s business jet survey released on Tuesday shows that the market index increased to 35 this month, the fourth consecutive move higher, which UBS analyst David Strauss said is “indicative of a much slower pace of deterioration.” The investment researcher said the business jet index is still weighed down heavily by weak pricing and high inventories since it hasn’t yet crossed the 50 mark indicative of incremental improvem
UBS Investment Research’s latest business jet update suggests that the pre-owned business jet market might be at or near the bottom. According to UBS researcher David Strauss, listings of used business jets slowed to a 1-percent month-over-month increase in March, although they are still 63 percent higher than prior-year levels.
By early in the year it seemed obvious to all but the OEMs themselves that significant production rate cuts would have to happen, but it would take until this month before Boeing would reach the same conclusion, as the company announced that it would curb output of its 777 line by around 29 percent starting next
UBS Investment Research’s business jet update released on Tuesday afternoon suggests that the pre-owned business jet market might be at or near the bottom. The firm said that this market segment is a leading indicator for the new business jet market.
Following a trend that began three months ago, the UBS Business Jet Market Index moved up again this month, signaling that used jet sales may be on a rebound. Although the index is still in negative territory, this “reflects a slower pace of deterioration,” according to the UBS Business Jet Survey released yesterday.
UBS Market Research’s latest snapshot of the business jet market shows continued incremental deterioration in market conditions in February, although at a slower pace than in the November-to-January time frame. The depressed market conditions are being caused by “way too much” pre-owned inventory for sale, falling pricing and tight financing, the firm said.
The sentiment expressed by the world’s two big airliner manufacturers seem increasingly out of line with the reality perceived by the financial community when it comes to airlines’ ability to fund aircraft deliveries this year, according to some of the industry’s most prominent analysts.
On Monday, JetDirect Aviation and JDA Acquisition Company (JDAAC) solidified an agreement for JDAAC’s purchase of JetDirect’s assets.
UBS Market Research’s latest snapshot of the business jet market shows continued incremental deterioration in market conditions last month, although at a slower pace than in the November-to-January time frame.