Home' Asian Aviation : AAV April 2016 Contents 26 AsianAviation | APRIL 2016
percent, while the mid-sized cabin market polled at
32 and down 7 percent, with the large cabin market
coming in with a reading of 26, down 11 percent
from the index reading in December.
Officials in the industry remain confident in Asia’s
outlook with Charlie Mularski, the chairman of the
Asian Business Aviation Association, saying in a
recent report during the Singapore Airshow that the
region was slowing, but he was “confident” it would
continue to grow.
And the outlook for Asia, according to the UBS
index survey, could bear out those positive vibes.
The survey showed that while there was still
customer interest in North America, it was “barely
positive” with a 51 reading, down 13 percent from
the fourth quarter of 2015. Customer interest in the
Middle East was also down 19 percent to a reading
of 32 and Latin America was down 5 percent to
a reading of 34 while Europe was steady with a
reading of 35.
Asia was the bright spot as far as customer interest
goes, with the UBS survey showing Asia increasing
24 percent to a reading of 35.
The outlook for the next 12 months showed
that 51 percent of the business jet professionals
surveyed believe conditions will stay the same,
16 percent believe conditions will improve and 33
percent believe conditions will deteriorate.
There was no breakdown by region on the outlook,
but the index survey did show that 43 percent of
the respondents believe the impact from “emerging
market weakness/currency devaluation” will have
a “meaningful impact” on the business jet market,
28 percent said it will have a “minor impact” on
the market and 22 percent said it will have a “very
significant” impact on the market.
When it comes to money, the index survey
showed that 76 percent of the respondents felt
that customer financing had remained the same,
13 percent said it had improved and 11 percent
said it had deteriorated.
The survey shows the cyclical nature of the
business jet market and how earnings and cash flow
are dependent on “end-user demand, availability of
customer financing, program execution and inventory
management,” the UBS report said.
“A weak market for business jets could negatively
affect General Dynamics, Bombardier, Embraer,
Rockwell Collins, Honeywell, B/E Aerospace, Rolls-
Royce and United Technologies,” it concluded.
Reflecting on the slowdown, but on Asia’s role as a
bright spot in terms of customer interest, Gulfstream
officials told Asian Aviation that “Asia-Pacific
continues to be Gulfstream’s largest international
market. To date we have nearly 300 Gulfstream
aircraft based in Asia-Pacific, with our fleet there
doubling in size over the past five years. Customer
demand in Asia-Pacific remains good, and the region
led our international orders for 2015.
“We have good customer interest in China,” the
company added, “but the frenetic pace of activity
there has slowed somewhat. There’s still interest; it’s
just taking longer to make those deals.”
Officials at Dassault said the “main hurdles” to
aircraft sales in Asia were “mainly related to the
cyclical character” of business aviation, which saw
“sudden growth and expansion” in the last three to
five years but which has calmed down for now.
“Potentially this market remains strong in the long
run and we believe at Dassault Aviation that most
Asian customers will again buy new aircraft soon at
those high levels known a few years ago,” said Jean
Michel Jacob, president of Asia for Dassault.
Jacob said Northeast Asia “is clearly facing a
reduction in new aircraft sales, due to the regional
economies degradation, very specifically in China
and Japan, due also to local deciders questioning
their short-term fate.
“Southeast Asia is, on the contrary, a rather active
area for both new and pre-owned aircraft in spite of
their local economies being hit by the current prices
of commodities” and by factors in China, Jacob
Officials at Embraer declined to comment
specifically on the UBS survey, but said they see
continued interest in Asia. The company said it
predicts China will see 800 business jets on hand
by 2025 worth an estimated US$31 billion while
the rest of Asia will see 490 jets worth an estimated
US$14 billion. ✈
Source: UBS Business Jet Survey
UBS Business Jet Market Index
Rel Perf (RHS)
Middle East & Africa
Asia & Pacific
Source: UBS Business Jet Survey
CUSTOMER INTEREST SCORE BY REGION AND COMPARISON TO PRIOR SURVEY
12 Month Outlook
Compos ite Index
Bus ines s Conditions
UBS BUSINESS JET SURVEY RESULTS AND COMPARISON TO PRIOR SURVEY
“We have good customer interest in
China, but the frenetic pace of activity
there has slowed somewhat. There’s
still interest; it’s just taking longer to
make those deals.”
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