Economy So Bad Private Jet Market Is Crashing

NYT: Manufacturers at the Farnborough International Airshow said this week that they were seeing signs that private jet sales in the American market were beginning to soften.

The American market, traditionally the world’s biggest for business jets, has slipped well below 50 per cent of global sales in recent months… That slump is attributed to worries about the American economy and the growth of other markets, like Russia, South Asia and the Middle East. Interestingly, manufacturers say the price of jet fuel, which has nearly doubled from a year ago, is not much of a factor…

Federico Curado of Embraer said that financing was becoming more difficult for private plane purchases, which could be a concern given that Embraer is bringing out more business jets. At Farnborough, Embraer showed its Legacy 600 executive jet that can carry 14, as well as a mock-up for a new jet, the Phenom, and a cross-section of another plane, the Lineage, a bigger luxury jet.

“The first signal of a downturn is demand for new jets,” Mr. Curado said. “The second is financing for planes already on order, and the third level of problems is cancellations or deferrals.”

“So far credit today is much more selective than a year ago,” he said. “It’s not as easy as six months ago to finance new aircraft.”

More at NYT >

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