Corporate earnings reports have provided fresh evidence of improving market conditions in the long-depressed light jet segment in the first quarter, but not enough yet to raise deliveries.
Textron chief executive Scott Donnelly, who manages Cessna and now Beechcraft, recalled how only a year ago Cessna had to reduce Citation Jet production rates, as all the market signs continued to point to lower demand for small, twin-engined aircraft.
“As we sat here a year ago, we were kind of concerned about what we were seeing in the market,” says Donnelly, speaking on a conference call with analysts. “While the overall numbers are not a lot higher in terms of unit deliveries, we certainly feel better about where we are going in the market.”
The parent of Textron Aviation, which includes Cessna and Beechcraft, has been tracking availability and pricing in the used market, and they appear to have stabilized after a long free-fall in the aftermath of the 2008 financial crash and never recovered.
“We feel better that pricing has firmed in the used market,” Donnelly says. “We feel better that pricing is better in the new market as well.”
Learjet owner Bombardier also released an encouraging set of first quarter tracking data of the business jet industry.
The inventory of used light jets, as a percentage of the fleet, had remained stubbornly above what Bombardier considers normal market levels until the first quarter.
After peaking at 14.3% of the overall light jet fleet in the third quarter last year, the inventory of used aircraft for sale declined to 13.2%, which falls within the range that Bombardier considers normal.
In January and February, business jet utilization increased slightly in the USA, while remaining unchanged in Europe for the full quarter.
Learjet deliveries during the quarter doubled to a total of six, including a mix of Learjet 70s and 75s.
Pricing, however, has been slower to recover on the lower end of the market.
“We see a modest improvement in pricing particularly in larger business aircraft,” says Pierre Beaudoin, Bombardier president and chief executive. “It’s still a challenging market in smaller aircraft.”