Sep. 17--The number of used business jets on the market fell in August, the second decline in three months after 18 consecutive monthly increases, a recently released report says.
Although it's come down slightly from record highs, the number of business jets on the market is still 36 percent higher than it was a year ago, according to UBS analyst David Strauss in a report.
Seventeen percent of the business jet fleet is up for sale. The average asking price for newer models is down 30 percent from peak levels. Pricing fell another 2 to 3 percent in August, the report said.
The asking price for a Citation Excel was roughly unchanged last month but is down 38 percent from its peak, it said.
The price of a Hawker Beechcraft Hawker 800XP declined about 3 percent last month and is now 37 percent down from its peak.
The average asking price of a Cessna Citation X declined about 3 percent in August and is down 47 percent from its recent peak, the report said.
The used business jet market is a leading indicator of new business jet sales.
The business jet market is still characterized by significant oversupply, weak pricing and tight financing, Strauss wrote.
"We think record high used available inventories will continue to overhang orders, pressure existing backlogs and could force further production cuts," he said.
Although there is indication of modest improvement, "we still see risk of an extended downturn," Strauss wrote.
Rich Jiwanlal, Hawker Beechcraft vice president for human resources, said last week that business conditions have not improved in any meaningful way.
"These are very, very challenging times," Jiwanlal said.
Leaders from Cessna Aircraft's parent company told analysts last week that business jet deliveries are expected to decline slightly in 2010 before moving higher.
This year, Cessna's jet deliveries are expected to be down about 40 percent to 275 over last year's shipments.
At the end of August, Strauss estimated there were 3,014 business jets for sale, about 1 percent lower than the previous month and 36 percent higher than a year ago.
Business jet inventories decreased 2 percent in August, Strauss reported.
Of the five major planemakers, Bombardier had the highest percentage of its fleet up for sale at 18 percent. That's followed by Cessna and Hawker Beechcraft at 17 percent, Dassault at 15 percent and Gulfstream at 14 percent, the report said.
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The model is signaling a rather robust recovery starting in 2012 with the next cyclic peak likely to be higher than in 2008, although fairly late in the forecast period.