Consultant: Worldwide Demand Can't Shield Bizjet Market
"All this talk about the "BRIC" countries (Brazil, Russia, India, China) and other emerging markets significantly minimizing the next downturn is overblown," according to aviation consulting practice Brian Foley Associates. While high fuel prices and a stuttering economy may have impacted general aviation sales dropping shipments below recent highs, the 30-40% discount offered to foreign buyers thanks to a plummeting dollar helped lift a balloon of worldwide business jet deliveries. Foley's company expects that balloon will eventually settle back down into a deeper, longer trough than generally expected. While International deliveries will still be up, Foley predicts they will settle 24% below a 2010 peak. This assessment challenges industry hopes that increased worldwide demand will insulate manufacturers from nationally localized economic disturbances. In Foley's words, "The OEMs are fat, dumb and happy with their current order backlogs and are oblivious to how quickly things will change."
Foley points to falling world stock market indicators most recently in Russia and China that along with Brazil and India were not long ago grouped as emerging markets for business aviation. According to the company, the "perfect storm for new business jet sales" has passed and the factors that brought it about will prove difficult to follow.