Mon, Jul 21, 2008
Growth In Outside Markets Lessens The Blow
The assumption that the market for private jets in the US was
recession-proof because of the wealth of the customers is being
reassessed after last week's Farnborough International Air
Show.
For planemakers, the bad news is that demand for private jets in
the United States has measureably softened as the US Dollar's value
has fallen, and credit tightened. The good news is that other
markets have grown at a rate that is lessening the impact of
declining sales in the US.
The International Herald Tribune reports Honeywell data shows
the US market for private jets has slipped below 50 per cent for
the first time, and is now about 30 per cent of worldwide sales.
Markets such as Russia, South Asia and the Middle East, where
commercial air travel is booming as incomes rise, is seeing a
parallel growth spurt in general aviation.
Each of the major jet manufacturers has its own spin on what's
happening to sales in the US.
Embraer CEO Federico Curado told reporters at the Farnborough,
"Already we are seeing a slowdown in business jets in the United
States." He added, "...credit today is much more selective than a
year ago -- it's not as easy as six months ago to finance new
aircraft."
Bombardier Chairman Pierre Beaudoin prefered to call it a
"softening" of the US market in April.
David Dixon, Bombardier's head of business aircraft for the
Asia-Pacific region, says the current economy may prompt business
jet customers to delay aircraft purchases and opt instead to
charter a plane, or choose a fractional ownership plan.
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