Story ID: 
Next Recession Leaves Airframers Without Safety Net
By: Jerry Siebenmark
Caption: Industry analyst Brian Foley says next recession won't cut as deep as 2008, but airframers won't have emerging markets to fall back on.
Word Count: 220
The next recession won’t cut as deep for business aviation as the one in 2008, but it will lack the safety net that emerging markets provided airframers 11 years ago, according to a new report released today by industry analyst Brian Foley. 

Business aviation shouldn’t see a more than 10 percent to 20 percent correction from the next recession, which is lower than the effects of a typical recession (about a 30 percent correction), he said. Unlike the last recession, however, the absence of strong, emerging markets—as was the case in 2008—means there’s nothing for OEMs to fall back on should recession strike.

“There is no world region today that could sustain current business jet delivery levels should markets again decline,” Foley explained. “With several forecasts predicting a U.S. economic slowdown beginning in a year or two, it's unlikely emerging markets will have enough time to recover to again act as a backstop.”

What that leaves in the event of a next recession is “too many manufacturers” offering 41 models vying for a market that annually accounts for about 700 units, he noted. And the up to 20 percent correction predicted by Foley could bring that count down to as low as 550 units, “making that pie even more coveted in a crowded market,” he concluded.