Turbine market shows mixed signals

Manufacturing officials look for signs of recovery

April 1, 2012

 

April 2012
Turbine Pilot Contents

Although the market for the largest business jets has grown slightly during the economic recession, deliveries of light and medium jets and turboprops continue to lag, according to the latest report from the General Aviation Manufacturers Association. But, GAMA is quick to remind, business flight operations are up significantly and used aircraft inventories are down, both good signs for a recovery.

Between 2008 and 2011, the number of light jet deliveries sank by more than 70 percent—from 363 to 106. Medium jet deliveries declined 47 percent, 702 to 375. However, large jet deliveries increased 4 percent, from 192 to 200. All in all, the industry delivered 681 business jets in 2011, down 6.3 percent from 2010.

Turboprop deliveries declined to 324, a 2.4-percent drop from 2010.

Meanwhile, business flight operations increased 19 percent in 2011 compared to 2010, a sign that businesses are once again leveraging their airplanes. GAMA reports that if the trend continues, the number of business operations will reach an all-time high in 2013. Greater utilization usually leads to new sales of aircraft as companies opt for newer models or for airplanes that fit new missions. Used-aircraft inventories declined slightly in 2011, by just 1 percent for business jets and turboprops. However, the number of used aircraft on the market is still higher than usual and prices of used aircraft continue to fall—not a good sign.

GAMA officials report that the key to improving sales, especially for light and medium jets and turboprops, is access to financing at reasonable terms. While larger aircraft are often self-financed by companies, smaller companies buying lighter airplanes tend to need financing, which recently has been difficult and expensive to obtain. GAMA and others in the industry, including the National Business Aviation Association and AOPA, continue to advocate for an extension of bonus depreciation schedules, another important sales tool.

Thomas B. Haines

Thomas B Haines | Editor in Chief, AOPA

AOPA Editor in Chief Tom Haines joined AOPA in 1988. He owns and flies a Beechcraft A36 Bonanza. Since soloing at 16 and earning a private pilot certificate at 17, he has flown more than 100 models of general aviation airplanes.