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UBS Reaffirms Rising Bizjet Flight Activity Forecast

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captain dad

Well-known member
Mar 30, 2006

By: Chad Trautvetter
January 7, 2010
Business Aviation
According to UBS Investment Research’s latest business jet update, flight activity in November was roughly unchanged from the same period in 2008, stemming the year-over-year declines seen in each of the previous 24 months. On a seasonally adjusted basis, cycles were roughly 1 percent higher from October and are now 18 percent above their March low, though still 23 percent below the 2007 peak.

“While we think year-over-year growth can continue to accelerate into early 2010, we remain focused on sequential improvement over the near term,” UBS analyst David Strauss wrote. “For 2010, we continue to forecast double-digit year-over-year cycle growth in the first half, moderating in the second half to yield 8 to 10 percent growth for the full year.

While flight activity is recovering in all business jet classes, light jet flight activity–which had declined the most into the downturn–has shown the most significant improvement so far, up 21 percent from the March bottom. Midsize and large-cabin jet activity are both up about 15 percent, UBS said.

Bizav Analysts See Glimmer of Hope on Horizon
January 5, 2010
Business Aviation

David Wyndham, v-p and co-owner of Conklin & de Decker, this week said he is seeing “glimmers of hope” for a business aviation industry still reeling from the economic downturn. Although expressing some caution, he noted, “The financial industry is headed back to stability and interest rates remain low, [and while] cash is still king, expect a very slow improvement in credit markets in 2010.

He called attention to signs of renewed life in the used aircraft market and an increase in flight hours, in particular among charter operators. Meanwhile, Brian Foley of Brian Foley Associates yesterday reaffirmed his earlier forecast of “measurable signs of recovery by mid-2010.

He cited a number of key positive indicators, among them a 2.2-percent climb in the U.S. GDP in the third quarter, a global stock market rebound and a lower dollar value. “With their strong local currencies and faster healing economies…non-U.S. buyers will deplete the most desirable pre-owned inventory, forcing still-recovering U.S. buyers to lead the new-aircraft recovery later.

With a down cycle compressed into a much shorter time frame of months rather than years, he said, “We’ve likely already embarked on what will hopefully be a full six-year upswing.”
10% growth this year would still put the number of cycles at least 15% lower than 2007: not good news for those on the outside looking in.

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