Aviation analyst and consultancy JP Morgan is predicting lacklustre Q2 deliveries from the bulk of the business jet manufacturing community, while the price and global inventory of used aircraft continues to hamper industry recovery.
In its latest monthly report ahead of a slew of industry results, JP Morgan said: "Cessna should be in the spotlight following its disappointing Q1." While demand for smaller Citations remains depressed, it added: "We will look for more colour on the Sovereign and XLS - key midsize offerings for which there are still open slots this year."
The report stated that Gulfstream may be affected by China's economic slowdown. The country has accounted for 20-25% of large cabin deliveries in the past two years, "and a slowing business jet market there is a source of risk as [Gulfstream's] China deliveries appear to be running low, at six so far this year."
Bombardier is expected to "stand out from a book-to-bill standpoint thanks to the 20 Challenger 350s that Swiss charter company Vistajet ordered last month." JP Morgan argues, however, that the Canadian airframer "still has a hole to fill for Challenger deliveries this year."
The group added: "The 2013 business jet delivery target for Bombardier overall depends on a large number of Learjet 70/75s being shipped in [the fourth quarter], when the aircraft is slated to enter service."
A full recovery in the new aircraft sector continued to be hampered by the stubbornly high global inventory of used business jets, according to JP Morgan. Business jets aged five years or younger continue to retain their customer appeal.
The market remains ripe for business jet buyers as the average asking price in June declined by 3.2% compared to the previous month.
"Used pricing has taken a turn for the worse recently," the report said. "Prices have yet to bottom since the downturn began in 2008 and are now down 12% year on year and 41% from the November 2008 peak.
"Pricing was weakest for super-midsize types such as the out of production Hawker 4000, but across the spectrum price tags are faltering. Light jet average asking prices fell 1.4% and medium jet prices were flat."
While aircraft purchasing remains sluggish, flight operations saw a modest hike.
JP Morgan points to the latest traffic numbers issued by the US Federal Aviation Administration: "Flight operations grew by 1.4% in May. While this was slightly lower than the 2.1% increase in April, viewed against the weakness of the past two years, two consecutive months of growth could be an early indicator of improvement."
Source: Flight International
