Thu, Feb 03, 2011
Many GA Segments Are Already Showing Measurable
Improvement
In his most recent outlook, GA analyst Brian Foley says he sees
an industry now poised to experience a nice growth spurt, albeit
from an extremely depressed base. He likens the situation to what
investors call a "dead-cat bounce", or a sharp, rapid upturn
following a particularly severe decline.
Foley notes that many general aviation segments, including
charter and fractionals, fuel sales, maintenance and other service
providers, are already reporting measurable improvement. Aircraft
builders are recovering as well, albeit more slowly. Large-cabin
jet manufacturers have experienced an upswing for some time, and
the beleaguered smaller aircraft segments will now follow, rounding
out the rest of the recovery.
Foley anticipates that business jet deliveries will grow an
average of 8% per year over the next five years, actually outpacing
many industries outside of aviation. The twist, however, is not the
rate per se but the unlikely source of all this growth. The large
cabin jets that held their own relatively well during the downturn
will grow at a modest 5% per year. However the truly spectacular
growth, quite possibly upwards of 20% per year, will be seen in
segments of the once decimated smaller cabin market. "This is very
positive news," Foley said, "but let's keep it in perspective. It
does not imply runaway growth so much as a bounce from unimaginable
low delivery levels."
Citation Mustang
"The industry has literally nowhere else to go but up. History
will one day show 2010 to have been the delivery low point, and
2011 the year the pessimism bubble finally burst."
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