March 24--The used business jet market has improved slightly this month, and -- given the crises in the Mideast and Japan along with high oil prices -- that's encouraging for recovery in the industry, an aerospace analyst wrote in a report Wednesday.
The number of used business jets on the market this month has fallen slightly to 13.2 percent of the fleet, Cowen and Co. analyst Cai von Rumohr said in the report.
The number of used jets of models that are still in production fell to 7.9 percent of the fleet -- the lowest level since October 2008, he said.
Improvement was "broad-based."
The number of used Cessna-model aircraft still in production for sale this month has declined to 8 percent, he said.
Prices are stabilizing, although they haven't moved higher, dealers told von Rumohr.
He said he expects Cessna to be "slightly in the red" during the first quarter, a seasonally weak part of the year. He expects Cessna to deliver 35 business jets during the first quarter, which ends March 31, compared with 31 delivered in the first quarter of 2010.
He also expects Cessna to announce a new product or products in May during the European Business Aviation Convention and Exhibit in Geneva, Switzerland.
So far, the crises in Japan and the Middle East and the increase in oil prices haven't affected demand for used business jets, von Rumohr said, although "the issue is an overhang."
If oil prices don't spike further and the Middle East unrest remains mostly isolated, aircraft dealers have told von Rumohr that they think the inventory of aircraft less than 5 years old will continue to decline, he said.
Continuing recovery in the market, however, will depend on further gains in the economy, von Rumohr wrote.
The health of the used business jet market is an indication of the market for new business jets.
When a large number of the fleet of used business jets are for sale -- especially newer jets less than 5 years old -- the sales of new business jets are impeded.
The bottom line is that the data this month is encouraging, von Rumohr wrote.
"Barring an aborted economic recovery, they support prospects for continuing bizjet recovery," he wrote.
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