JPMorgan: Business Jet Deliveries To Rise 20 Percent in 2012

According to JPMorgan North American Equity Research’s latest business jet monthly report, business jet deliveries will remain flat this year at about 549 aircraft, 47 percent below the peak in 2008, but this could rise to more than 650 next year. “We are forecasting a 20-percent increase off the bottom in 2012,” JPMorgan aerospace and defense analyst Joseph Nadol III said, “but this will require a pickup in demand that has been slow in coming and confined to the larger segment of the market.” The firm is closely watching order activity for the remainder of the year to determine whether next year’s deliveries will meet its estimates. Meanwhile, it said, the “challenging U.S. macro outlook” could delay a recovery for small and midsize jets. JPMorgan expects demand for large-cabin jets to remain strong, since “international customers, including those from China, have been the main drivers of relatively robust demand for larger jets.” In the pre-owned market, inventory of in-production jets inched up by 0.2 points, to 10.5 percent. However, prices also climbed for light and midsize jets by 1.6 and 1.1 percent, respectively, “an indicator of a potential inflection point for new demand” for these segments.


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