Not everyone in the business aviation forecast industry sees only moderate turbulence ahead. With regard to those hefty backlogs the airframers are banking on to help them weather the storm, business aviation analyst Brian Foley Associates is warning clients that some manufacturers can expect double-digit percentage order cancellations.
Those with orders tied heavily to the air-taxi, start-up charter and fractional ownership markets seem particularly vulnerable. “If they haven’t already, new aircraft orders are poised to fall off a cliff,” said Foley, an industry veteran with more than 20 years’ experience who most recently worked at Dassault Falcon. “Who in their right mind would part with tens of millions of dollars in this economic environment to buy an aircraft?” As a result of shifting deliveries due to cancellations worldwide, Foley predicts new aircraft deliveries will reach a peak sooner than expected. “For the next few months, OEMs will provide earlier delivery slots to solid contract holders as others cancel or are unable to make progress payments. This will keep deliveries strong only for the rest of this year and next,” he added. After that, he sees a precipitous drop.
