The number of business jets delivered in 2009 fell by more than 20 percent compared to 2008 but the worst of the downturn in terms of pricing seems to be over.

In 2009 there were only 870 deliveries of business jets compared to the 1,116 in 2008. Despite the more than 20 percent decline, the 870 deliveries still represents the third highest number of deliveries.

Examining the previous downturn shows that the second year after the peak, deliveries were at their lowest. The number of deliveries in the last quarter of 2009 amounted to 254 aircraft compared with the 202 in the third quarter, illustrating an improvement.

Nonetheless, due to the difficulty in canceling orders in the short term, there is an expectation that 2010 will see only a modest improvement in the number of deliveries, before a more significant improvement is experienced in the period 2011-2012.

The prices of business jets experienced a major fall in the early part of 2009 as a result of the recession and highlighting of corporate excess. The larger corporate jets in particular saw millions of dollars wiped off their value as disposal became very difficult.

Today, the demand for the larger corporate jets has improved and this is gradually allowing prices of smaller jets to also stabilize. Far from their being a surge in used prices, at present the market is experiencing a period of stability such that there is far less volatility in pricing.

Only by the end of this year when the recession is clearly demonstrated to be a historical event, will there be a modest increase in pricing.

Paul Leighton (pleighton@aircraftvalues.net) is also founder and managing director of the Aircraft Value Analysis Company, a UK-based company that specializes in future value forecasting. AVAC was specifically formed in 1991 to provide independent advice regarding current and future aircraft values, and the factors that affect them, to the air transport community.

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