UBS Bizjet Survey Says Market Holding Steady

UBS Investment Research's May business jet index stood at 50, an indication of a stable market and in line with its January and March surveys. "Our survey continues to reflect improving customer interest and a strong 12-month outlook, but remains weighed down by very high used inventory levels," noted UBS aerospace analyst David Strauss. According to the company, preowned business jet pricing for most models is off 30 to 40 percent from peak levels, and the decline has moderated prices, although they continue to erode slightly. As for the new aircraft market, UBS's small-cabin index indicates continued incremental degradation in this segment, while its mid- and large-cabin indices indicate incremental improvement. UBS believes Gulfstream will benefit from the stabilization noted in the survey, but Strauss expressed concerned about "the shape of the recovery at Cessna, given significant oversupply, fractional weakness and increased competition at the low-mid end by Embraer."