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.
Until this most recent, long and painful recession, the rule of thumb followed by those who analyze the business aviation market is that aircraft sales, new and used, follow an increase in corporate profits by about 18 to 24 months. Assuming this to be true, then business aviation should already be showing healthy growth and the completion and refurbishment segment should be close behind. But it hasn’t happened yet.
The business aviation industry appears poised for growth this year as the U.S.“leads the way” to a fuller recovery, according to two analysts contacted by AIN. Teal Group vice president of analysis Richard Aboulafia is “cautiously optimistic” that business jet deliveries and billings will climb this year, while Brian Foley of Brian Foley Associates is more bullish.
NBAA released a new study today showing that even during the worst economic times since the Great Depression, companies that relied on business aviation outperformed those that did not. According to NBAA, the companies that use business aircraft have better shareholder value and recovered from the recession more quickly than their peers.
Kalogridis International had a better year in 2011 than in 2010, and this year, said founder George Kalogridis, promises to be even better.
Demand for high-end carpeting in the single-aisle and twin-aisle bizliner market, he said, wasn’t affected so much by the recession as the smaller business and private jet segment. Now, he added, activity is starting to pick up in that smaller jet market.
In September 2010, the National Bureau of Economic Research declared that the recession had ended in June 2009 and a recovery was under way.
Once again monthly International Air Transport Association (IATA) airline traffic statistics reflected “positive distortion” caused by geopolitical and other factors, resulting in somewhat inflated data for March.
An economic impact analysis commissioned by the Aerospace Industries Association (AIA) predicts that more than one million jobs will be lost in the aerospace and defense industry, if the U.S. Congress fails to reach an agreement that would prevent automatic government spending cuts.
Defense spending cuts of some $350 billion over the next decade contained in the new debt-limit legislation passed by the U.S. Congress correspond with the numbers expected from an earlier goal advanced by President Obama. But the Pentagon leadership described the potential of $600 billion more in automatic spending cuts as disastrous.
It has been two years since the economy went south, dragging business aviation right behind, and a year-and-a-half since a panel of “top economists” formed by the non-profit National Bureau of Economic Research (NBER) declared the recession over as of June 2009.
- Page 1