Light Bizjets Gaining Momentum, Say JPM Analysts

Light business jets are “gaining momentum,” according to J.P. Morgan Investment Research’s latest business jet monthly report. “The U.S. accounts for about 60 percent of the global business jet fleet, and after more than five difficult years, demand is improving.”

The firm said that light jets in particular should benefit since North America accounts for two-thirds of deliveries in this segment. J.P. Morgan aerospace analyst Joseph Nadol III noted that steady growth of about 4 percent in U.S. flight operations underlies the recovery, and pricing of pre-owned light jets is nearly flat year-over-year and is thus faring better than other categories.

However, demand for larger aircraft is facing “cross currents” even as demand at the low end improves. Demand for large-cabin jets “looks flattish overall” since about two-thirds of demand is from outside North America, largely from Europe and Asia (especially China), where demand is softer as a result of weaker economic conditions.

Meanwhile, J.P. Morgan said that inventory of pre-owned jets fell 0.2 percentage points, to 7.8 percent, in October–below the 8- to 8.4-percent range in previous months this year. Inventory of jets younger than five years old edged down slightly to 5.5 percent, below the 6.6-percent long-term average and back to the late 2013/early 2014 level, the firm said.