When will the business jet market hit bottom?
That’s the question on a couple of people’s minds who e-mail the Wichita Eagle after the news hit today that Cessna is cutting an additional 2,300 jobs, suspending development of its Citation Columbus and extending a companywide shutdown to four weeks from two.
I posed the question to analyst Peter Arment.
Unfortunately, there’s a significant lag between corporate profits and business jet activity, Arment said.
He thinks it will be “24 months before you see any meaningful uptick in business jet activity.”
If corporate profits begin to stabilize and improve by the end of this year, that means it would be the second half of 2011 before we’ll see an increase in new business jet activity, he said.
One Comment
There was an article in today’s Business section of the Eagle about mayors of cities affected by the slowdown in general aviation appealing to the president for support of that business. The tone of the article was about creating jobs in this down economy.
But what about addressing the fact that general aviation makes financial sense for companies? Business airplanes got started because there is a return on investment to get their people where they need to be to do business, particularly when there is a group going to the same place, and the cost of their time making airline connections is figured in to the return. If it were just a showy expense, only rock stars would have their own planes, and there are not enough of them to support an industry.