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Saturday, July 12, 2014

Study: Business jet sales to dip before rebounding

BY MOLLY MCMillin
The Wichita Eagle

A new study by Forecast International predicts that 11,297 business jets worth about $197 billion will be produced from 2009 through 2018.

The business jet market study predicts production to reach 825 planes in 2009 followed by declines in the next two years.

It expects manufacturers to produce 738 aircraft in 2010 followed by 716 planes in 2011. The study predicts production to rise in 2012 and continue to improve over the remainder of the forecast period.

In the past year, business jetmakers have slashed production as the recession hit. New orders dwindled to almost nothing, scheduled deliveries were deferred and cancellations began eating into big backlogs of orders.

Recently, there have been some encouraging signs — aircraft use is up, the used jet market has stabilized and cancellation rates have subsided, the study noted.

"All are signs of optimism, and the market appears slated to improve slowly and gradually," Forecast International said.

Still, some difficulties must be overcome, it noted.

Market saturation remains a problem, especially in the North American market, where business jet operators have relatively new jets in their fleets.

And buyers are concerned about fuel and insurance costs, and government regulations, Forecast International senior aerospace analyst Raymond Jaworowski said in a statement.

Still, planemakers aren't sitting still, the report noted. Each has at least one new model in development.

Some of the new models include Cessna's Citation CJ4, the Bombardier Learjet 85, the Dassault Falcon 900 LX, the Embraer Legacy 450 and 500, the Hawker Beechcraft Premier II and the Gulfstream G250 and G650.

Last month, Honeywell Aerospace released its annual forecast, which calls for deliveries of up to 11,000 new business jets, valued at $200 billion, in the 11 years 2009 through 2019.

Honeywell's forecast was down significantly from a year ago, when predictions called for 17,000 jet deliveries over an 11-year period.

Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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