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Increase in smaller jets means smaller profitsIncrease in smaller jets means smaller profits

Demand for small jets will outpace that of larger ones, but profits will fall due to their lower cost. That’s the conclusion of aerospace analyst Brian Foley.

“Common sense dictates that as more jets are sold the industry’s total shipment values go up. That may no longer be the case for the time being,” Foley said. Foley said worldwide business jet shipments fell from 1,317 units in 2008 to 672 in 2012. He said he believes that beginning this year “the number of units delivered will continue to track upward,” but total shipment values could decrease or remain flat.

The reason, he said, is that “future shipments will contain a greater proportion of less costly small and medium jets....The net effect is that over the next couple of years, more units will go out the door without moving the needle on overall industry values.”

“This anomaly won’t rectify itself until 2018 when a slew of new, large, pricey jet models from Dassault, Bombardier and Gulfstream hit the market,” Foley predicted.

Alton Marsh

Alton K. Marsh

Freelance journalist
Alton K. Marsh is a former senior editor of AOPA Pilot and is now a freelance journalist specializing in aviation topics.
Topics: Financial, Aviation Industry

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