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The business aviation market is showing early signs of increased sales from late last year carrying until 2012 with key indicators improving in January, based on initial analyst reports. (www.aviationweek.com) Used aircraft sales continued to improve while prices soar dramatically in January for the first time in months, according to Jetnet’s latest report.
Business aircraft flights, meanwhile, mark its highest levels of activity in almost a year, based on the data of Morgan Stanley and the FAA. Some of the original equipment manufacturers (OEMs) shares that they seen strong interests and activity in January which is traditionally a weaker month for aircraft business.
Fleet sales across all categories drop to 10 %, specifically for turboprops while business jets decline to almost a full percentage point of 13.7 % in January. One the other hand, turboprops were down more than a percentage point of 9.3 % while both turbine’s and piston helicopters’ sales fell to 6.4 % and 6 %, respectively.
Meanwhile, average asking prices for all categories soar dramatically in January, except for piston helicopters. Prices rose to 51.6 % for turboprops and 58 % for turbine helicopters, Jetnet says. Sales in business jets has also improved while piston helicopter prices drop modestly.
The overall increase in prices favors the OEMs, some of which had to offer discounts to trim unsold inventory. It is not the first increase in prices since the economy declines.
However, expert Brian Foley, founder of the consultancy Brian Foley Associations, notes that the market value in January 2011 “will have been near the low-mark for turboprop pricing and that 2012 could potentially see pricing approaching levels not seen in three years.”
He notes that a number of factors could have affected the price increase, including the fuel price in the world market. He furthers that since turboprops are more fuel-efficient than jets, it helps to advance its value proposition. “However, within the category, buyers at the low end of the turbo product spectrum are more sensitive to overall operating costs that buyers at the high end, which could end up bifurcating the market much as we’ve seen with the business jets.”
Meanwhile, market indicators showed positive signs for used aircraft inventory, which marked an increased sale in January. Analyst Morgan Stanley adds that business aircraft improved 1.27 % in January, reaching its highest peak since June.