Mar. 21--After three years of plunging deliveries, the piston-powered aircraft market is poised to rebound faster than the business jet and turboprop markets, a new report said.
"Finally, a breath of fresh air," said Brian Foley of Brian Foley Associates, an aviation market advisor and author of the report.
This is great news for what many thought was general aviation's most downtrodden industry, Foley said.
The piston market has been hit hard by the downturn. Deliveries fell 45 percent in 2009 -- to 965 aircraft -- over the year before. That figure is down 65 percent from a decade high of 2,755 deliveries in 2006.
Foley expects piston sales to pick up midyear from pent-up demand, improved personal balance sheets and increased credit availability.
"I suspect there's been a lot of people sitting on the fence waiting for the dust to settle," Foley said. "We're hopeful by the last half of the year, those people will come out of the woodwork and start snapping up some of those."
He's expecting a double-digit percentage growth, although that's from depressed 2009 levels. Growth should last at least a couple of years.
"That's good news for a segment that had literally nowhere else to go but up," Foley said.
Cessna Aircraft saw a similar rebound for pistons during the recovery from the last downturn, said spokesman Doug Oliver.
"So a rebound this year and next is entirely possible," he said. "Interest from fleet operators remains very high, our international business looks to be a strong point, and technology advances keep our pistons desirable."
Of the general aviation market, the piston segment typically averages about 60 percent of all general aviation aircraft deliveries, Foley said, although its share by value is 25 percent.
The piston and turbine delivery trends respond to different market conditions and can be counter-cyclical, Foley said.
The piston market tends to be more "price-elastic."
"When avgas hit $6 a gallon, buyers felt it in their own wallets," he said. "Then the stock and credit markets collapsed, compromising buyers' personal portfolios and credit lines and making the purchase, of say, a $250,000 aircraft even harder."
Turboprops and business jets, meanwhile, are expected to languish in 2010 and 2011 and begin to rebound in 2012.
The piston market tends to react more quickly to an improving economy, Foley said.
"People can say, 'Hey, I'm going to go buy an airplane today,' and go do it," he said.
A corporation buying a business jet, in contrast, has to wait for approval for its board of directors.
Plus, when a corporation or individual starts shopping for a jet, there are a high number of used ones out there at prices much lower than new ones.
Those "will have to get sopped up before they start selling new ones," Foley said.
In addition, manufacturers still have white tails -- unsold new airplanes -- sitting on their ramps.
"Before long, the availability of low-time, relatively new airplanes will go down," Foley said. "Then they'll go back to the manufacturers. But we're just not there yet."
Reach Molly McMillin at 316-269-6708 or firstname.lastname@example.org.
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