“That’s healthy, that’s sustainable,” he said. “That’s what a piece of equipment should do.”
The uptick is a relief for business-jet makers, such as Bombardier Inc., Embraer SA and Dassault Aviation SA. They had cut production rates and offered discounts to curb a glut of aircraft. New-jet deliveries plummeted to 874 in 2009 from a record 1,317 the year before. While sales remain weak, at 676 jets last year, the dearth of inexpensive near-new aircraft is beginning to drive buyers to purchase new planes, brokers and analysts said.
‘Less Competition’
“We’re certainly seeing less competition from the used side,” Scott Donnelly, chief executive officer of Textron Inc., the maker of Cessna jets, said in a conference call with analysts in April. “There’s certainly not the number of them out there that created some of the issues for us on new aircraft sales in the past.”
Manufacturers aren’t out of the woods, still selling planes at discounts to list prices, Vincent said. Bombardier is protecting its turf in the midsize jet market from new planes such as Textron’s Cessna Longitude and Embraer’s Legacy 500, he said. The Longitude has a list price of $24 million and the Legacy 500 goes for $20 million, according to a Business & Commercial Aviation guide. A new Gulfstream G650, made by General Dynamics Corp. and currently the largest private jet, lists for $69.4 million.
But the recovery this year seems more solid, said Chad Anderson, president of Jetcraft, a private-jet broker. For one thing, aircraft makers have been vigilant to block speculators, who had bought planes to sell later at a higher price, from artificially driving up backlogs, he said.
“The last run-up was so extraordinary that it was unsustainable,” Anderson said. “I think we have legs here for the foreseeable future.”
This article was provided by Bloomberg News.