The economic downturn means there’s some grim years ahead for aviation for Wichita, Teal Group analyst Richard Aboulafia said today. The boom in commercial jetliners and business jets is ending.
“This is a much worse than usual down cycle,” he said. It’s the “worst popped bubble yet.”
“We’re looking at a few grim years, but nothing fundamental has changed,” Aboulafia said. Growth in deliveries should resume in 2013 or 2014.
And large order backlogs at Wichita manufacturers should not give anyone a false sense of security, he said. “People defer and sometimes they have to.”
Still,”the sky is not falling,” Aboulafia said. “We’ll see growth again.”
Aboulafia was the keynote speaker at the Wichita Aero Club’s inaugural luncheon. About 190 people attended the event.
Wichita is one of five aviation clusters in the world. But it’s more vulnerable to downturns than the other clusters because manufacturers here are in the smaller end of the business jet and jetliner markets — areas that decline faster because they are more sensitive to pricing, he said.
“Wichita’s problem right now is that the entire business jet sector … is at the bottom end of the market,” Aboulafia said.
But there are plans to expand into larger segments of the market. Cessna Aircraft is developing its largest jet ever, the Citation Columbus. And Spirit AeroSystems is heavily involved in Boeing’s 787 Dreamliner, he noted.
Aboulafia predicts business jet deliveries to peak next year at roughly 1,400 units, then decline through 2014 before growing again.
Still, to keep things in perspective, the business jet market quadrupled during the 1995 to 2008 time frame — the biggest growth of any of the aviation segments. And predicted deliveries in 2014 are still higher than deliveries in 2006.
“This is an industry that snaps back fast,” Aboulafia said of the business jet market.
For more on this story, see Wednesday’s Eagle.
