Aug. 11, 2014

Strong growth in business jet deliveries, and a modest rise in piston aircraft shipments, helped propel the overall market for new general aviation aircraft to a modest 4.8 percent gain in total deliveries and 4.5 percent increase in total billings in the first six months of 2014, according to the General Aviation Manufacturers Association (GAMA).

Business jet shipments in the first half of 2014 increased to 318 aircraft from 283 in the first six months of 2013, a 12.4 percent improvement. Piston deliveries rose 4 percent in the period to 520 aircraft from 500 the year before. Turboprop deliveries declined slightly to 272 aircraft from 276, a 1.4 percent decline.

GAMA’s figures, along with information reported by other organizations monitoring business aircraft sales and utilization, suggest a turnaround in the business aircraft market could be at hand. However, there are still some hurdles to be cleared before growth can accelerate as many predict it will by 2016.

For example, JP Morgan remains somewhat sanguine about the state of business aviation. In the July 2014 edition of its Business Jet Monthly report, JP Morgan said that while inventories of used aircraft have improved, valuations remain “persistently weak.” In one positive note, JP Morgan said it found that U.S flight operations continued to increase in May, albeit at a slightly slower pace than seen in the first four months of the year.

JetNet, which also monitors the used aircraft market, found that pre-owned transactions increased by 8.5 percent in the first half of this year, while sales were being completed in 57 days, or about half the time reported a year earlier. “This is likely a direct result of an 8.2 percent decrease in average asking price,” JetNet said, suggesting that declining prices actually are helping to reduce used inventories.

Meanwhile, ARGUS said that business aircraft flight activity rose for the seventh straight month in June and was up 3 percent over a year ago. FAR Part 91 flight activity rose by 3.2 percent during the period, while Part 135 flight activity rose a more modest 1.4. ARGUS said large-cabin jets led all categories with a 7.9 percent increase in flight activity. Small and mid-sized jet flight activity rose 4.4 percent and 2.5 percent, respectively.